Arkstream Capital: How Ordinary People Can Properly Participate in Tokenized Pre-IPO

Original Author: @Chandler_btc | Arkstream Capital

TL;DR

• In Q1 2026, the weekly trading volume of commodity perpetual contracts (gold, silver, crude oil) on crypto exchanges surged from $38.1M to $25B, a staggering increase of 65,463%. The tokenization of traditional assets will be the main narrative for crypto over the next 5-10 years, and Pre-IPO tokenization is simply the newest category to enter this arena.
• In April, three leading exchanges – Bitget, Gate, and Binance (PreStocks) – simultaneously listed tokenized products related to SpaceX. While their compliance methods differ, the core concept is the same: breaking down Pre-IPO shares, previously reserved for ultra-high-net-worth clients, into small fragments for retail investors.

This article aims to clarify two key points: first, what traditional Pre-IPO actually entails, and second, how retail investors can participate.

Tokenization of Traditional Assets: The Main Narrative for Crypto in the Next 5-10 Years

According to statistics, in Q1 2026, the weekly trading volume of commodity perpetual contracts (gold, silver, crude oil) on crypto exchanges surged from $38.1M to $25B,representing a 65,463% increase. After Binance launched its TradFi Perpetual segment in January, cumulative trading volume surpassed $153B with over 114 million transactions in three months. Its XAG (silver) contract achieved a daily average volume of $1.31B, propelling its global market share from 0.2% to 4.9% (a 23.5x increase).

The most notable event was the Iran conflict in late February. When the U.S. and Israel struck Iran over a weekend, traditional futures, stocks, and forex markets were all closed. Only the crypto market remained open for trading. Hyperliquid's crude oil perpetual spiked 5% instantly, Tether's gold token XAUT saw a single-day trading volume exceeding $300 million, and Bitwise's CIO dubbed it "the weekend that changed finance."

Assets like US stocks, precious metals, crude oil, and forex, previously traded only during weekday business hours, are now being tokenized, put on-chain, and offered as 7×24 global liquidity. Pre-IPO tokenization is simply the newest category joining this wave.

Source: BitMEX Research

What Exactly is a Pre-IPO?

The Pre-IPO secondary market (trading of existing shares) has existed for over a decade. Global trading volume reached $160B in 2024, with the U.S. direct secondary market alone accounting for $61.1B. Buyers are primarily family offices, sovereign wealth funds, institutional investors, and high-net-worth individuals. Single transaction sizes typically start at $10M or more, effectively locking retail investors out.

The vast majority of transactions occur through SPVs (Special Purpose Vehicles): an original shareholder places their shares into a newly established shell company, which then sells its own units to new buyers. The buyer receives a stake in the SPV, indirectly holding the underlying company's shares. This is because direct secondary share transactions rarely allow strangers to directly appear on the cap table (the company's shareholder registry), as it could trigger other shareholders' ROFR (Right of First Refusal). This process is cumbersome and can be blocked by existing shareholders. Therefore, what a buyer ultimately purchases and holds is an LP interest or Unit in the SPV, representing an indirect stake in the existing shares.

Since the secondary market's trading is heavily concentrated in a few top-tier assets, American AI/aerospace giants like SpaceX, OpenAI, and Anthropic consistently account for 30-40% of trading volume. Together with other top unicorns like ByteDance, Stripe, Databricks, and xAI, the top 15 companies consume roughly 83% of the market's total volume. (This concentration is why, even if Bitget/Gate only listed a SpaceX token, a single such offering could easily be oversubscribed by over a hundred million dollars – the supply of top-tier Pre-IPO shares is perpetually scarce, while demand is intensely concentrated.)

The vast majority of these assets are U.S.-based. Hence, the primary regulatory hurdle is CFIUS (the Committee on Foreign Investment in the United States), which restricts foreign capital from investing in sensitive U.S. industries (AI, semiconductors, defense). Investments in SpaceX or Anthropic from entities in certain countries face strict scrutiny. Therefore, before a transaction, sellers usually stipulate prohibitions on UBOs (Ultimate Beneficial Owners) from specific countries. The General Partner (GP) will scrutinize the SPV to determine if the buyer's ultimate controller is from restricted nationalities like China, Russia, or Iran. The deeper the ownership structure, the harder the audit, but it's not infallible. We recently encountered a case where a Chinese UBO was discovered within a two-tiered SPV structure, causing the entire deal to collapse.

Sources: Caplight PitchBook, Augment

Following an IPO, U.S. companies are subject to a standard Lock-up Period. SEC Rule 144, combined with underwriter agreements, dictates that early shareholders and employees cannot sell their shares on the public market for six months post-IPO. This rule applies to nearly all U.S. companies (Facebook, Coinbase, Reddit, and Cerebras all had 6-month lock-ups). This explains why the Pre-IPO tokens from Bitget/Gate stipulate a "6-month wait for delivery"; it doesn't affect pre-market trading, however.

Real-World Pre-IPO Transaction Details

Extremely High Ticket Size Thresholds

In traditional Pre-IPO transactions, the ticket size effectively starts at $10M. Very few brokers will entertain deals under $1M – not due to a lack of interest, but because the fixed costs per transaction (legal fees, KYC, SPV setup, channel fees) make smaller deals unprofitable. Therefore, this move by exchanges represents a disruptive attempt to break down class barriers. Previously, retail investors (and sophisticated ones at that, needing US stock accounts, etc.) could only trade after an IPO. Now, although exchanges charge a premium, they at least offer ordinary people a chance to participate.

Broker/FA Chaos

A cross-border Pre-IPO deal typically passes through multiple layers:

Underlying GP - Rep (seller's representative) - Tier 1 Broker - Tier 2 Broker - … - FA - Client

Each layer adds a 1-5% fee. A deal with an underlying valuation of $500B might end up costing the end buyer over $600B after all layers are applied.

Take SpaceX as an example. The prevailing market price might be around a $1.25T valuation plus a 3-11% access fee (varying by channel and tier). This means the final price could be roughly $1.375T, and this is before accounting for tokenization compliance costs. All things considered, the prices offered by exchanges seem fairly reasonable, likely as a customer acquisition strategy.

Furthermore, most supply blocks on the market are fictitious – the same batch of shares is repeatedly listed by multiple brokers, with fewer than 10% being genuinely tradeable. For instance, a platform might list SpaceX at a $1.2T valuation, but deeper investigation reveals it's a ghost listing, a common occurrence even on major platforms and intermediaries.

Sources: A secondary share trading platform

If a transaction involves an LP Interest Swap, you will need GP Consent. This is the underlying SPV General Partner's right to approve or reject the transfer of LP shares. The GP has the authority to refuse. The reality in the industry is that GPs are not very welcoming of such transfers – vetting new LPs, conducting compliance checks, and onboarding strangers are all burdensome tasks. Consequently, in many cases, you must pay off the GP to get things done, adding yet another layer of fees.

Illiquidity is the biggest pain point of Pre-IPO existing shares.

Exiting a position mid-way is extremely difficult. You either wait for the company to go public (typically 3-7 years), and then endure a 6-month lock-up post-IPO. Or, you find a new buyer and repeat the entire structured process – which takes at least two to three weeks at best, plus another FA fee.

Every handover is an independent OTC transaction, requiring a fresh set of legal documents, KYC/AML/UBO checks, and GP approval. This is precisely why Pre-IPO shares are consistently priced as "illiquid assets."

How Can Ordinary People Participate in the Current Pre-IPO Wave?

It's predictable that a series of existing share tokenization products will emerge in the market. The essence is the same: the platform purchases real existing shares in the traditional Pre-IPO market and then uses a token wrapper to fragment them for retail investors.

For the average person, this provides an opportunity to enter before the company's IPO, benefiting from valuation increases round by round.

The fundraising valuations of top-tier, high-quality assets tend to rise monotonically. SpaceX has gone from a $74B valuation in 2021 to over $1.4T today. OpenAI has surged from $29B to over $852B, Anthropic from $4B to over $800B, and ByteDance from $75B to over $600B. Each new financing round pushes the valuation higher, and existing shareholders ride the wave.

However, it's crucial to understand this is not a guaranteed profit. Historically, Stripe experienced a down round where its valuation was cut from $95B to $50B. TrueLayer dropped by 30%, Cybereason by 90%, and WeWork went from a $49B valuation to bankruptcy. In 2023, 128 unicorns globally saw their valuations decrease, with 42 falling out of the unicorn club entirely.

Therefore, the key to participating in Pre-IPO is to select the right asset, not to time market sentiment. The strategy is to earn long-term returns by riding the natural valuation increase of the company – not to FOMO into a listing for a short-term speculative pump. Many crypto users mistakenly treat Pre-IPO like an IDO, which operates on a completely different logic.

To summarize the participation logic:

First, do you have a long-term bullish view on this asset? Does SpaceX/OpenAI/Anthropic justify its post-IPO valuation? Are you willing to hold it until the next funding round or after the IPO?

Second, is the chosen product safe? Who is the issuer? What is the recourse if something goes wrong? Whom do you claim against?

The Shape of RWA in the Next 3 Years

The RWA-ification of Pre-IPO is still in its very early stages. Supply of top-tier assets is scarce, demand is highly concentrated, and valuations are on a long-term uptrend. In the coming months, tokenized products for major names like OpenAI, Anthropic, xAI, Stripe, ByteDance, and Kimi are expected to appear one after another.

This is just one small branch of the broader tokenization trend. The foreseeable main narrative has a four-layer structure:

• Stablecoin Issuers: Provide the onramp for on-chain dollars and settlement.
• Public Blockchains: Underpin the issuance and transfer of assets.
• Trading and Distribution Platforms: CEXs and DEXs. Furthermore, we see significant potential in LaunchPad / IDO platforms (such as Buidlpad, etc.). They already possess the complete suite for KYC, issuance, subscription, and distribution of new assets. Yesterday they launched crypto tokens; today they can just as easily launch Pre-IPO tokens.
• Asset Issuance Service Providers: Companies specializing in bringing various types of assets onto the blockchain.

It is foreseeable that the Tokenization narrative will not just create a handful of unicorns. Instead, it has the potential to incubate a new generation of trillion-dollar infrastructure and a cohort of hundred-billion-dollar platform-level players.

This is just the beginning.