Anthropic Futures Dip 33% Despite Partnerships and Coinbase Listing
Anthropic Futures took a hit after the company’s much-anticipated listing on Coinbase on June 22. The AI startup’s perpetual futures contract ANTHROPIC/USDC dropped 7.2% from $1,728 to $1,628 in the first 24 hours after the listing. The ANTHROPIC/USDT contract on Binance also decreased by nearly 5% in the same time period, further showing the negative sentiment in the market.
The drop in price came as a surprise to many market participants. In the last few weeks, Anthropic bolstered their position in the AI world by partnering with Micron Technology, a company with a market cap of about $1.37 trillion. In spite of the partnership, the majority of the participants in the market are focused on the short-term uncertainty in the pricing of the company’s IPO rather than the growth of the company in the future.
Coinbase Listing Effect
When an asset is listed on Coinbase, the asset becomes more visible to the investing public and the price of the asset often rises as a result. This is commonly referred to as the “Coinbase listing effect.” Anthropic’s pre-IPO futures do not exhibit the Coinbase listing effect.
After Coinbase listed Anthropic, and OpenAI, as part of its pre-IPO perpetual futures offerings, traders expected an increase in demand. This was not the case as the ANTHROPIC/USDC contract failed to gain traction and decreased from its opening price of $1,728, exhibiting decrease in demand and higher volatility. In the first two trading days, the futures contract reached a peak of $1,769 and a low of $1,560.
The futures contract on Binance exhibited the same trend, reaching an all-time low of $1,545 on June 23. It is important to note that, prior to the launch of the Anthropic futures product on Coinbase, Binance’s contract traded around $1,700 and declined approximately 9% since the listing event.
What Causes the Fall of Anthropic Pre-IPO Futures?
One of the leading factors behind the sell off is the hesitation of investors to bear the risks associated with a possible overvaluation of the pre-IPO. In the case of Anthropic, this is being likened to the recent fall of the SpaceX pre-IPO perpetual contracts.
Prior to the public trading of the SpaceX related shares, the pre-IPO perpetual contracts traded above the price of the SpaceX IPO, causing buyers who purchased the SpaceX contracts at the price above the IPO to suffer losses.
Similar to SpaceX, the public offering of shares of Anthropic will provide price discovery for the pre-IPO perpetual contracts as the key details of the Anthropic IPO are not disclosed. Although the Anthropic company has submitted the S-1 registration statement with the SEC, the price of the offering and the number of shares being offered remain unknown.
Because of a lack of price discovery, the futures markets trade a range of expectations. Coinbase has notified the trading markets that the IPO price could be significantly different, up to 25% greater or less than the price reflected in the futures, creating a significant gap risk.
What are the Technical Levels to Consider?
From a technical standpoint, the futures contracts for Anthropic trade with strong support around $1,545. In the past, contracts traded above the 78.6% Fibonacci retracement level at $1,631. Buyers are encouraged to close contracts several times above the $1,631 level to trade futures above $1,698 and breach the $1,700 level.
Momentum indicators are conflicting. The Relative Strength Index (RSI) is currently grazing 44, indicating that the market is still in a bearish trade.
Currently, selling momentum is decreasing. The RSI bounced back from an oversold level of 19, and the ADX has been improving. Price recovery from $1,545 to $1,670 means a developing uptrend will probably stick.
Market Outlook
Comments on Anthropic’s pre-IPO futures are highly speculative because of the unknown structure of their forthcoming IPO. The recent decline shows a cautious investor response to valuation uncertainty, although buyers are slowly returning according to indicators. The price will primarily change based on the details of the IPO, specifically the valuation and share distribution, in addition to the market’s AI-related businesses outlook.
