How will it end? If history provides a framework for predicting the phenomenon, we can expect the current speculative bubble in the stock markets to be pierced by the colossal volume of shares being listed in IPOs in the back half of this year. While not popularly realized, every stock bubble for which data exists has observed the prices of key indices peak in unison with IPO volumes. This pattern is evident in the three greatest stock market bubbles of the last century, including the Great Crash of 1929, the Japanese Asset Bubble (1989), and the Dotcom Bubble (2000). The identical relationship is further suggested in the available data during the Mississippi Bubble (1719), South Sea Bubble (1720), and Berlin Stock Bubble (1873). It is also unsurprising.
Consistent with an imbalance between supply and demand, the synchronicity between IPO volumes and stock price peaks in speculative episodes is representative of a liquidity shock. While novel, this idea is given meaning when considered within the context of the Kindleberger-Minsky model. After all, where security purchases at the beginning of a market cycle can be expected to be funded with anterior savings or the drawdown of margin debt, the same trades in a late-stage environment necessitate the sale of existing holdings. That this ‘crowding out’ routinely occurs after a steep rise in market prices and the point when investor balance sheets are saturated explains the ensuing price collapse. Because it has previously gone unsaid, it must be stressed that this seemingly innocuous rotation conducted en masse explains the price collapse in the speculative bubbles of the past.[1] With prices bid up on the back of limited floats during the boom phase, these late-stage transactions are made into an exhausted marketplace, where any meaningful volume can be anticipated to unearth what Thomas Lamont, the president of J.P. Morgan, famously described as “air pockets” in the marketplace in October 1929.[2]
Against the historical sequence, the current slate of mega-IPOs heightens the already present risk of crowding out. This is because the current slate of mega-IPOs is unique, among other factors, for their reliance on a niche of retail investors, who, in the case of SpaceX, have accounted for a remarkable 25% of the initial public float against the historical average of 5-10%.[3] No small item, this dependency is an outgrowth of the enterprises’ capitalization in the private markets, where high-net-worth individuals drove the funding. In other words, most of the ultrawealthy are already invested in the mega-IPOs being brought to market, such that the group, if anything, can be classified as sellers.
Given their elevated importance, it is worth reflecting on the niche of investors being targeted by the likes of SpaceX, OpenAI, and Anthropic. Most recently, this group of ‘technologists’ has geared their investment portfolios towards Bitcoin to the extent that one can reasonably gauge the size of the cohort by the number of cryptocurrency holders that, at 26 million, approximates 16.1% of the 164 million stockholders in the U.S.[4] Heavily weighted towards cryptocurrencies, it is not unreasonable to expect these technologists to devote upwards of $50 billion of Bitcoin to the acquisition of a portion of the $4 trillion being floated in the three mega-IPOs.[5] After all, Bitcoin is not only estimated to account for a disproportionate share of this group’s savings, but the security is also likely one of the poorest performing assets in their portfolio. This raises the question, who will be on the offer side of the trade?
Accepting a nearly saturated market and the $75 billion (only) held in the 11 Bitcoin ETFs, the unwinding of $50 billion of Bitcoin would be made into a void, forcing a decline (from $64,000) to perhaps $50,000, where levels suggest a further leg downward is all but certain.[6] A fixation of market observers, the $50,000 threshold sits 5.0% above the mining cost of Bitcoin of $47,600 and 6.7% below the average holding cost of Bitcoin, or what enthusiasts call the ‘realized price’ of $53,600.[7] Meanwhile, to the extent individuals have made outside profits, further selling can be expected from ETF holders of Bitcoin, the most recent entrants to the group, who maintained a cost basis as high as $87,830 on February 1 and will have a tax incentive to book losses at year-end.[8]
It is well to remember that the integration of Bitcoin into the financial markets means that the forthcoming ‘crypto winter’ cannot resemble those of the past. Far rather, as noted elsewhere, the correlation between Bitcoin and the Nasdaq indicates an extensive use of cryptocurrency as collateral in margin loans.[9] Consequently, we can anticipate the downward movement in price to be furthered by margin calls with compulsory liquidation that will bear resemblance to the crash in Bitcoin observed during October 2025. That event was synonymous with a downdraft in stock prices that will be magnified by the extensive rollout of stablecoins, such that a forced liquidation will reach past the blockchain into the funding markets that the rest of finance presumes to be quiet.
The idea that Bitcoin will be crowded out by the current slate of mega-IPOs is notably consistent with the historical record. Broadly, experience has demonstrated that the new issues with the lowest intrinsic value have declined below their fair values. What remains to be seen is whether a premature crash in cryptocurrencies has the capacity to derail new equity from reaching the market. It is the tail risk.
Charles Lister Smith, PhD
June 18, 2026
[1] These episodes are detailed in a forthcoming paper, “Architecture of a Bubble.”
[2] “New Phrases Springing Up in Wall Street’s Language,” New York Times, October 26, 1929, 26.
[3] CNBC, “SpaceX IPO Leaves Retail Investors with Too Few Shares and a Tough Sell-or-Hold Decision,” June 15, 2026.
[4] Board of Governors of the Federal Reserve System, Economic Well-Being of U.S. Households in 2025 (Washington: Government Printing Office, May 2026); Gallup, "What Percentage of Americans Own Stock?," Gallup, 2025.
[5] Decrypt, “Crypto Platforms Broaden Access to Elon Musk’s SpaceX Ahead of $1.75 Trillion IPO,” June 2026; CNN Business, “Anthropic Files to Go Public in a Potentially Trillion-Dollar Debut,” June 1, 2026; CMC Markets, “OpenAI IPO: What Investors Need to Know in 2026” (valuation near $830 billion).
[6] Dziadkowiec, Jakub, “Bitcoin Faces Record Institutional Outflow as Spot ETFs Bleed,” June 10, 2026.
[7] CoinGlass, “Bitcoin ETF Fund Flows,” accessed June 2026 (cumulative net inflows of roughly $58 billion since the funds’ launch in January 2024).
[8] Binance, “Average Bitcoin ETF Investor Turns Underwater After Heavy Outflows,” February 2, 2026.
[9] See "Market Displacement" dated June 8, 2026.