SpaceX IPO Mania and Ethena’s Strategic Pivot

Hyperliquid's pre-IPO market for SpaceX recorded 373 million dollars in volume and just under 300 million dollars in open interest in a single 24-hour period, roughly four times the prior day's activity, making it a top-ten venue on Hyperliquid by volume. Hyperliquid is pricing SpaceX at approximately 177 dollars per share against an implied IPO price of 135 dollars, and the Cerebras IPO was cited as a precedent where a pre-IPO premium on Hyperliquid was validated and then extended further on the opening trade. At the implied valuation, SpaceX already ranks among the top eight most valuable companies in the world excluding commodities, and daily volume was projected to reach 3 billion dollars once live trading begins.

Two competing narratives were offered on what the SpaceX IPO means for crypto: one in which it draws speculative capital away from digital assets, and another in which it generates new wealth that gets redeployed into risk assets including crypto. A low-float SPAC-style pattern was flagged as a risk, where narrative drives the price higher initially but sellers are positioned and waiting. Early investors sitting on 100x or more gains were expected to sell at unlock and redeploy into new venture opportunities. One speaker said he would not trade the SpaceX IPO on day one or in the first few weeks given that uncertainty.

Bitcoin ETF flows have shown more than five consecutive weeks of net outflows totaling over 5 billion dollars, with approximately 200 million dollars in outflows in the most recent session, interpreted as evidence that traditional investors are reducing Bitcoin exposure. Bitcoin spot price was cited at approximately 63,300 dollars, described as sitting at range lows, with the realized price near 53,000 dollars identified as a bear market fair value level. The MVRV Z-score was said to be approaching the zone that has historically marked bear market lows, and the bear market low was predicted to be set by Q4 based on high-timeframe on-chain indicators. A caution was raised that historical buy zones like MVRV lows have coincided with periods of existential risk to the asset class, making them psychologically difficult to act on, and Bitcoin traded below its 200-week moving average for roughly six months in 2022 without a quick recovery.

Ethena originally built its yield around the crypto basis trade and cash-and-carry strategy, but as those returns compressed across successive bull periods, moving from roughly 20 percent after Trump's election down to 8 to 10 percent most recently, the protocol shifted toward on-chain stablecoin lending. Ethena has now proposed expanding its reserve composition to include institutional lending via a Maple Finance approach, AAA-rated CLOs, and running the basis on equity, real-world asset, and commodity perpetual futures. CLO yields were cited in the five to six percent range, while DeFi lending strategies with incentives can reach approximately 4.5 to 5.8 percent, though those incentives were expected to fade over time. The diversification was driven primarily by a need to reduce concentration risk in DeFi lending following the Kelp DAO incident rather than by a desire to increase yields.

Coinbase announced a potential partnership with Ethena that would allow clients to deposit into Ethena to earn yields above T-bills, mirroring how Coinbase previously partnered with Morpho. Sixty-three percent of stablecoin deposits on Morpho come from Coinbase users, giving Morpho a distribution advantage that Ethena may now share. Morpho trades at a significant premium multiple relative to other lending protocols partly attributed to that distribution relationship, and strong TVL growth via Coinbase could lead the market to award ENA a similar premium. Even if yields stabilize in the 4.5 to 5 percent range, that level may not attract meaningful capital without the Coinbase partnership as a major distribution channel.

The ENA token has been largely disconnected from the protocol's value, with most returns flowing through sUSDe rather than to token holders, and Ethena has not yet turned on its fee switch. One fee switch requirement is a six to seven percent spread over sUSDS, currently at 3 percent, making the threshold unreasonable in the current environment, and speakers argued the KPI hurdles should be lowered to reflect current conditions. At various TVL scenarios, if Ethena takes 0.4 percent of notional, buyback yield to the token ranges between 3 and 7 percent annually, but approximately 1.8 percent of ENA token supply unlocks each month through 2028, meaning projected buybacks would be far smaller than those monthly unlocks. One speaker argued that even if buybacks are not large, signaling that the token is tied to the protocol has value, while another held a different view on whether the fee switch parameters should change at all. The recommended sequencing was for Ethena to prioritize showing execution on the reserve strategy shift and improvement to sUSDe APY before turning on the fee switch.