Is Pre-IPO a surefire way to make money? Decrypting the real risks behind liquidity, valuation, and ownership.

2026 is widely regarded by the market as the "Super IPO Year." SpaceX officially listed on the Nasdaq on June 12 at $135 per share, raising as much as $75 billion; OpenAI is expected to go public in the fourth quarter of 2026, with a valuation of $852 billion after its latest funding round. According to market analysis, the IPO cycle of 2026 is expected to be one of the largest in history, potentially unlocking over $3.6 trillion in value.

Meanwhile, the crypto market leverages tokenization technology to bring Pre-IPO assets into on-chain trading scenarios, reducing the entry barrier from millions of dollars to nearly zero. Crypto exchanges like Gate.io have opened up early investment channels to global users through digital Pre-IPO mechanisms—channels previously exclusive to institutions. However, the flip side of low barriers and high return expectations is the minefield that ordinary investors can easily step into.

Pre-IPO tokens are never low-risk investments; they are high-risk gambles with a fundamentally different risk structure.

What Are You Really Buying? The Structural Deficiency of Underlying Rights

This is the most fundamental and easily overlooked risk.

Currently, Pre-IPO products on the market are mainly divided into three categories: substantive equity holding (SPV structure), synthetic notes (Mirror Note), and on-chain perpetual contracts. Only the first category holds real company equity through an SPV, while the latter two have no direct legal relationship with real equity.

Take Gate.io's Pre-IPOs product as an example. It uses a Mirror Note structure, which does not directly hold actual equity. Instead, prices are generated algorithmically based on real-time quotes of the underlying asset in the over-the-counter market. Users do not obtain direct equity in the target company and do not enjoy voting or dividend rights.

What does this mean? What you bought might just be a piece of code or a payment promise based on the company's performance. The term "equity" may just be a marketing concept. If there is no legal connection between the issuer of the underlying asset and the target company, when the company goes public, merges, or goes bankrupt, your rights might not be legally protected.

For investors seeking asset entitlement, it is essential to carefully distinguish the underlying structures of different products—whether they are real equity, mirror notes, or pure derivatives. These three product types differ significantly in terms of entry barriers, liquidity, underlying asset entitlement, and risk structure.

Pricing Bubbles: Are You Paying for Value or Sentiment?

Pre-IPO tokens in the crypto market generally exhibit significant price premiums. According to a report by DWF Ventures, Pre-IPO stocks typically trade at a premium of 20% to 40% over the last known private market valuation, and most platforms lack short-selling mechanisms to correct prices.

This means pricing mechanisms are highly opaque. Secondary market expectations, market sentiment, and speculative enthusiasm can all become pricing factors, rather than the true value of the underlying asset. When market sentiment is high, Pre-IPO token prices can be pushed far beyond reasonable valuations; once sentiment reverses, prices can plummet in a very short time.

The VCX incident in March 2026 serves as a textbook case. VCX debuted on the NYSE at an issue price of $31.25. Within seven trading days, its share price hit a high of $575, a 1,740% increase from the issue price, while its net asset value per share remained around $19, resulting in a peak premium of nearly 30 times. This extreme premium was not driven by expectations of extraordinary returns from the underlying asset, but by a combination of three factors: extreme scarcity of circulating shares, narrative backing from the sector, and asymmetric institutional access. After short sellers intervened, VCX's stock price plunged about 40% that day.

The core question is: When the pricing mechanism is opaque, are you really investing, or are you betting on how much the next bag holder is willing to pay?

Liquidity Trap: Seemingly Sellable Anytime, But Hard to Exit

Traditional Pre-IPO investments typically lock up funds for periods measured in "years." Controlling shareholders and actual controllers usually lock their shares for 36 months, while other Pre-IPO shareholders typically lock theirs for 12 months. Even after a company goes public, these shares cannot be cashed out immediately—investors must wait for the lock-up period to end. From completing a Pre-IPO investment to finally exiting, the time span often extends over 3 to 5 years.

Tokenized Pre-IPO products in the crypto market attempt to solve this problem by creating a 7×24-hour liquidity trading environment through mechanisms like PreToken. However, beneath the surface of liquidity lie deep traps.

Some platforms open secondary trading markets for PreTokens, but the trading depth of the Pre-Market is far lower than that of the main board. Daily trading volumes of Pre-IPO assets are much lower than those of major cryptocurrencies, bid-ask spreads can be large, and large sell orders may significantly impact prices. This means that when you really need to sell, you may not find enough buyers, or you may have to sell at a price far below expectations.

A deeper issue lies in structural mismatch. Traditional Pre-IPO investments are designed for long time horizons, with participants accepting lock-up periods as part of the risk-return trade-off; crypto market participants, on the other hand, are accustomed to high liquidity and flexible exits. Introducing illiquid assets into a high-liquidity culture creates a mismatch that must be carefully managed. If exit paths, secondary markets, or redemption mechanisms are not clearly defined, user expectations will severely diverge from product reality.

Moreover, in illiquid markets, price discovery mechanisms are inefficient or even absent. Valuations of Pre-IPO assets are primarily determined through private negotiations, not transparent market bidding. For example, in November 2025, Kraken's Pre-IPO funding round valued it at around $20 billion, but by April 2026, its secondary market trading valuation had fallen to about $13.3 billion. In the absence of liquidity, ordinary investors may find it difficult to enter at reasonable valuation windows, often facing the risk of "buying at the top."

Ownership Legal Risk: The Company May Declare Your "Equity" Invalid at Any Time

This is one of the most damaging yet easily overlooked risks in Pre-IPO investments.

In May 2026, AI developer Anthropic reiterated that unauthorized transfers of private shares are "void," causing the price of at least one tokenized Pre-IPO share to plummet nearly 50%. The company explicitly stated: "Any sale or transfer of Anthropic stock that has not been approved by our board of directors... is void and will not be recorded in our books and records."

Crypto lawyers warn that such "void" statements mean holders of tokenized shares may not possess any legally enforceable rights. If the Pre-IPO tokens you hold are deemed "unauthorized transfers" by the target company, you may not be able to convert the tokens into actual shares when the company goes public, nor can you claim any shareholder rights.

The core of this risk is: There may be no legal agreement or authorization between the issuer of the Pre-IPO token and the target company. The token's value rests entirely on the issuer's credit and market consensus, not legal ownership of the underlying asset. Once the target company takes legal action or issues a denial statement, the token price could instantly go to zero.

Regulatory Uncertainty: An Evolving Legal Framework

Pre-IPO tokenized products sit at the intersection of traditional securities law and crypto asset regulation, with unclear legal status.

In the United States, the division of regulatory authority between the SEC and the CFTC over crypto assets continues to evolve. Whether Pre-IPO tokens are considered securities, commodities, or another asset class may vary among different regulatory bodies. This uncertainty implies:

• Changes in regulatory policies could directly affect the legality and trading methods of Pre-IPO tokens.
• Platforms may adjust product structures, delist specific tokens, or restrict user access due to regulatory requirements.
• Investors may face the risk that their holdings become untradeable or unexchangeable due to regulatory reasons.

Additionally, regulatory attitudes toward Pre-IPO tokenized products vary greatly across jurisdictions. A product legal in one region may be considered an illegal offering in another. Cross-border investors must pay special attention to the laws and regulations of their respective regions.

Summary

Pre-IPO investments, through tokenization technology, have lowered entry barriers and improved liquidity, offering ordinary investors opportunities to participate in the early growth of top unicorns. However, behind the opportunities lie five invisible risks that cannot be ignored:

First, structural deficiency of underlying rights. Most crypto Pre-IPO products are mirror notes or derivatives, not real equity, and holders do not enjoy voting or dividend rights.

Second, pricing bubbles and valuation inflation. Pre-IPO tokens typically trade at a 20% to 40% premium over private market valuations, driven by market sentiment rather than underlying value.

Third, liquidity trap. Pre-Market trading depth is insufficient, making large entries and exits difficult, and there is a structural mismatch between illiquid assets and a high-liquidity trading culture.

Fourth, ownership legal risk. The target company may declare unauthorized tokenized equity transfers "void," causing the value of holdings to instantly vanish.

Fifth, regulatory uncertainty. The legal status of Pre-IPO tokens is still evolving, and policy changes can significantly impact holdings.

Pre-IPO investment has never been a "low-risk, high-return" perfect choice; it is an asset class with a fundamentally different risk structure. Before participating, investors need to fully understand what they hold, where the risks lie, and what they might lose in the worst-case scenario. Only then can they make truly rational investment decisions in this super IPO year of 2026.

Frequently Asked Questions (FAQ)

Q: Are Pre-IPO tokens purchased on crypto exchanges real stocks?

Not necessarily. Currently, Pre-IPO products on the market are mainly divided into three categories: SPV substantive equity holding, Mirror Note synthetic notes, and on-chain perpetual contracts. Only the SPV structure holds real company equity; the latter two have no direct legal relationship with real equity. Before purchasing, you need to carefully understand the underlying structure of the product.

Q: How long are funds locked for Pre-IPO investments?

In the traditional private market, Pre-IPO shareholders typically have a lock-up period of 12 to 36 months, and the time from investment to final exit is often measured in 3 to 5 years. Tokenized products in the crypto market provide 7×24-hour trading liquidity through PreToken mechanisms, but Pre-Market trading depth is limited, and actual exit may face liquidity issues.

Q: How is the price of Pre-IPO tokens determined?

The pricing of Pre-IPO tokens usually references real-time quotes from the over-the-counter market. However, due to the lack of transparent public bidding mechanisms, valuations of Pre-IPO assets are primarily determined through private negotiations. According to a report by DWF Ventures, Pre-IPO stocks typically trade at a premium of 20% to 40% over the last known private market valuation.

Q: What happens to my investment if the target company does not recognize tokenized equity?

This is a real risk. In May 2026, Anthropic stated that unauthorized transfers of private shares are "void," causing the price of related tokenized shares to plummet nearly 50%. If the target company does not recognize the legal validity of the tokens, holders may not be able to convert the tokens into actual shares or claim any shareholder rights.

Q: Are Pre-IPO investments suitable for ordinary investors?

Pre-IPO investments have a risk structure significantly different from traditional crypto asset investments. Investors need to fully understand the risks across five dimensions: underlying rights, pricing mechanisms, liquidity, legal ownership, and regulation. They should make decisions based on their own risk tolerance and investment horizon. It is recommended to carefully read the product terms, understand the underlying asset structure, and related risk disclosures before investing.