Going Public sticker tape concept image by iQoncept via Shutterstock
The gap between digital assets and traditional public company stocks has been narrowing, and recently, that trend has been accelerating.
On Monday, Coinbase (COIN) officially launched pre-IPO futures contracts tied to OpenAI and Anthropic artificial intelligence, following its previous issuance of the same public SpaceX (SPCX) vehicle. This measure allows eligible non-US sellers to obtain transaction price exposure from high-quality, venture-backed private companies before they go public. Ten years ago, this might have been considered a virtual reality. Now, it is very true.
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For Coinbase, this is not just a product launch. It represents the expansion of a profitable, derivative business that can separate income from the trading volume of crypto available in the market.
However, before analyzing charts and setting up COIN trades, traders should understand the unique risks of this new derivative instrument.
What Is the Future of a Pre-IPO?
In traditional finance, standard futures contracts have a fixed expiration date. When that date arrives, the contract must be settled, requiring traders to either close their position or roll it over to the next calendar cycle.
The indefinite future (or “perp,” not to be confused with the slang term for a criminal suspect) removes this obligation entirely. It is a derivative contract that trades continuously without an expiration date, allowing participants to hold a definite view of the direction indefinitely.
To ensure that the price of the contract remains centered on the actual price of the underlying asset, the exchange uses a dynamic mechanism called financial ratio. That is a periodic payment that is exchanged between long and short positions based on the contract price or a discount to fair market value.
When this is applied to trending pre-IPO companies like OpenAI and Anthropic, the path gets complicated. Private companies do not have a transparent, real-time public share count. Therefore, pricing these contracts on a per share basis is not very reliable.
Coinbase overcomes this obstacle by creating contracts that are directly indexed to a price-based index. For example, a contract token price of 1,800 implies a combined market capitalization of $1.8 trillion. Kind of like market money before there was a public market to set that figure. Gains and losses are completely settled on a stablecoin proxy like USDC.
These contracts do not represent direct ownership of private shares. Instead, they serve as an artificial means of obtaining values. The moment a company files its final public prospectus for an IPO and begins trading on the stock exchange, Coinbase automatically returns the valuation perp to the perp of the common stock, per share with a neutral profit and loss adjustment, allowing open positions to carry directly through the transition.
If the recent SPCX IPO is any indication, my suspicion is that this has a better chance of being good COIN news than many retail investors, who may be attracted by pre-IPO action, rather than strong investment hygiene. But we will see.
COIN stock is stuck in a trading range. That’s what we see here.
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And the more we analyze this stock’s performance history, the worse it looks. COIN went public on April 14, 2021, just over five years ago. The night before, the stock was traded on the Nasdaq Exchange at $250 a share, and opened at $381 at 1:30 p.m. Eastern on April 14, a premium of more than 50%.
It actually reached around $430 on its first day before closing near $328. It closed yesterday, June 22, 2026, at half that price. And no, there was no 2:1 stock split! Put it all together and you get a long-term chart that looks like this:
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You also get a stock that trades at 80x trailing earnings, five times the growth rate and six times the sales. That has caused the stock to trade wildly over time, resulting in a 60-month beta more than three times that of the S&P 500 Index ($SPX).
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From the point of view of monetization companies, this is out of the scope of Coinbase’s expansion to hold a large competitive moat, the way it did as the first prominent crypto exchange. It fills a long-standing void, where access to late-stage business valuations has historically been restricted to institutional desks or limited secondary sales.
A permanent future falls into the category of something I won’t chase with my money, but I won’t tell you what to do with yours. It’s high risk, but has the potential for high returns. As long as one understands the former and the latter, one can at least consider this with open eyes.
Rob Isbitts created the ROAR Score, based on his 40+ years of technical analysis experience. ROAR helps DIY investors manage risk and build their own portfolios. For Rob’s written research, check out ETFYourself.com.
At the date of publication, Rob Isbitts had no (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published Barchart.com
