From Followers to Price Setters: The Role of the Crypto Market is Inverting
- Core Thesis: The crypto market is pioneering price discovery through Pre-IPO contracts, providing asset opening prices earlier than traditional financial markets. This marks the industry's shift from a follower to a frontrunner in global asset pricing.
- Key Elements:
- The Cerebras (CBRS) case shows platforms like Bitget began trading before the Nasdaq opening, with contract prices rising from $290 to $380, accurately predicting an opening price of around $350.
- Oracle-based internal pricing mechanism: With no external price reference available, the system uses large order book trade spreads, adjusting prices every second based on an Exponential Moving Average (EMA) to prevent extreme volatility.
- Dynamic price band mechanism: Initial volatility range of ±5%, which automatically re-anchors upon reaching 90% of the boundary, expanding to a maximum of ±25%, balancing risk and price discovery space.
- The author proposes a "10% vision": By 2030, approximately 10% of global financial assets will exist in tokenized form, reflecting the accelerating trend of tokenization.
- The crypto market is transitioning from "waiting for Wall Street's approval" to dominating price discovery, with traditional financial capital beginning to proactively integrate into the underlying Web3 infrastructure.
Original author: Gracy Chen （X：@GracyBitget）
Last night, a college friend working on Wall Street suddenly sent me two screenshots: the contract price trends of AI chip company Cerebras (CBRS) on Bitget and Hyperliquid.
He said these two charts appeared in their company's internal meeting. The topic of discussion was quite intriguing:
The crypto industry is offering a unique value that Wall Street does not have — providing the opening price of an IPO asset earlier than Wall Street.
Taking CBRS as an example, ahead of the new stock's official trading debut on May 14 (Eastern Time), the entire Wall Street was waiting for its opening price. But on platforms like Bitget and Hyperliquid, the market had already started moving first.
Around 10 AM Eastern Time that day (while Nasdaq was still conducting the new stock's opening match), both platforms showed similar trends: the CBRS contract price rapidly surged from approximately $290 to around $380.
Later that day, CBRS officially debuted on Nasdaq with an opening price of about $350, reaching a high of $386 during the session.
In other words, in this CBRS case, the crypto market successfully completed a remarkably precise price discovery ahead of time.
This is quite encouraging.
For a long time in the past, the crypto industry was always waiting for Wall Street's recognition, waiting for institutional entry, waiting for traditional finance to endorse us.
But now, the situation is reversing. Wall Street is beginning to seriously look at the price signals from the crypto market.
This is not a coincidence; it is a reflection of the inherent advantages of the crypto industry's mechanisms. For the price discovery of Pre-IPO contracts, several exchanges have adopted similar mechanisms, such as:
- Oracle-based internal pricing and smoothing mechanism: How does the system price when the US stock market hasn't opened and there is no external price reference — a "blind box" period? Our mechanism is that when there is no external price reference, the system uses an endogenous oracle to extract large trade price spreads from the order book, adjusting the price at a frequency of once per second. However, the price is calculated based on the exponentially weighted moving average (EMA) of the past minute's prices, allowing the current price to slowly converge towards the target price. Let me give an analogy: The oracle acts like a radar, capturing large, real-money trades on the order book to calculate the true target price. But to prevent the price from wildly fluctuating and harming retail users, the system activates a "slow-motion" mode — making minor adjustments every second, smoothly converging towards the target, and avoiding malicious liquidations caused by instant, sharp volatility.
- Dynamic price band mechanism balancing risk and flexibility: The system sets an initial price fluctuation range of ±5%. Once the price touches 90% of the boundary, it triggers an automatic re-anchoring. Without changing the market maker's single-event risk model, this expands the maximum price discovery range within a week to approximately ±25%. This is somewhat like a retractable leash when walking a dog. Initially, the system sets a safe activity range for the price (e.g., ±5%). If buying pressure is extremely strong and the price is about to hit the ceiling, the system doesn't rigidly lock down trading. Instead, it automatically raises the "ceiling" (e.g., to ±25%). This controls the risk of single sharp surges or drops while giving the market ample space to explore the true "opening price."
What truly matters behind this is: the crypto market is transforming from a "follower" into a pioneer within the global asset pricing system.
A few days ago in a CNBC interview, I mentioned a "10% vision": by 2030, approximately 10% of global financial assets will exist in tokenized form. We are really accelerating toward this vision now.
Writing this, I also recalled taking my son to visit Wall Street and seeing the "Fearless Girl" standing in front of the New York Stock Exchange, hands on her hips. She holds her head high, stubbornly and resolutely staring down the massive, ancient, seemingly unshakeable traditional financial empire.
Early Crypto was like this girl — standing outside the door of the traditional giant, seen as a rebellious outsider and challenger.
In the last cycle, we were eagerly hoping Wall Street would turn around and embrace crypto. In the next cycle, Wall Street will discover: they have no choice but to embrace crypto and tokenization.
Because the most cutting-edge market experiments, the fastest liquidity organization, and the most open price discovery are happening right here. In this irreversible integration, the enormous capital volume of traditional finance is actively connecting to the superior underlying tracks of Web3.
Wall Street remains the world's largest container of capital, but Crypto is becoming the "pricing hub" of this container.
Wall Street brings the scale, but Crypto dictates the future of price discovery.
(Photo taken by me in February 2023 @ Wall Street)
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