SpaceX IPO scramble reveals difference between tokenizing a stock and getting one

The race to get into the SpaceX IPO left many crypto investors on the sidelines.

Binance Wallet, Bybit and Bitget canceled SpaceX pre-IPO offerings on Friday and refunded customers after failing to secure shares promised through xStocks, Kraken’s tokenized equities business. The platforms had marketed the offering as a way for retail investors to gain access to one of the most sought-after IPOs in years through tokenized shares.

“Due to xStocks’ inability to deliver the underlying assets, no SpaceX allocations were received,” Bybit told users.

The episode, at first glance, might look like a failure of tokenization. But industry participants say the real bottleneck was much simpler: access to the underlying asset.

Too much demand, not enough shares

Getting access to SpaceX shares was always going to be difficult.

The company sought to raise $75 billion, with an initial plan to reserve 30% of the offering for retail investors. Demand quickly overwhelmed that allocation. Bloomberg reported retail orders exceeded $100 billion, while CNBC reported that the retail portion was cut to the low-20% range before pricing.

One person familiar with the matter told CoinDesk that xStocks and its distribution partners gathered more than $1 billion in customer orders. But when underwriters finalized allocations, many of those requests went unfilled.

Binance, Bybit and Bitget received no shares and canceled their offerings. Meanwhile, customers of Kraken and xStocks received only a fraction of the allocations they requested.

The shortfall wasn’t limited to crypto platforms, though. Data compiled by Access IPOs showed some retail investors at traditional brokerages received only a portion of the shares they had sought.

An xStocks spokesperson said “overwhelming demand” prevented all orders from being fulfilled and that funds tied to unfilled subscriptions had been returned.

The firm’s tokenized SpaceX stock, trading under the ticker SPCXx, still launched after the IPO. About $24 million worth of the tokenized shares were circulating onchain at publication time, according to Arkham data. Ondo Finance and Dinari, which did not offer pre-IPO access, also launched tokenized SpaceX products following the company’s market debut.

Lesson for tokenized asset

The episode underscores a key lesson for tokenized assets. Creating a token is easy; securing the real asset behind it is the crucial part.

“What appears to have gone wrong… is that demand significantly exceeded the available supply of underlying shares,” a spokesperson for tokenization platform Dinari said. “If the underlying stock cannot be sourced, allocated and held within the necessary regulatory framework, there is ultimately no asset to tokenize.”