Elon Musk’s day-trading fan club is on a buying spree in some of the most speculative parts of the market. They are snapping up the joke cryptocurrency Dogecoin and a controversial closed-end fund that counts SpaceX among its key holdings. The buying frenzy is driven by hopes that Donald Trump’s election will release more animal spirits.
Destiny Tech100 Inc., which holds shares of private-market unicorns like SpaceX and Sam Altman’s OpenAI, has surged roughly 280% over the past week since Trump recaptured the presidency. The rally triggered multiple volatility halts Monday, and sent its shares up as much as 38% after a 64% jump Friday. Meanwhile, Dogecoin was up nearly 20% in Monday trading amid a broad crypto rally.
Musk was one of Trump’s biggest supporters and a key voice during the closing days of the election. Now that Trump is president-elect, Musk’s companies are hot properties among the retail investing crowd. While investing in SpaceX is anything but simple for individuals, Destiny Tech100 gives small traders a way to get a piece of the popular private firm.
The fund, which reported $56 million net asset value, had about 38% of its holdings in SpaceX as of end of June, according to its filing. Beyond the closed-end fund, pretty much anything tangentially related to Musk’s vast business empire is catching a bid. Shares of Tesla Inc.
are up 42% in a week despite Trump’s well-known skepticism of electric vehicles. Dogecoin has more than doubled over the same time after Musk touted it on his social-media platform X. “Musk made a huge bet on Trump, and this is the payoff,” said Steve Sosnick, chief strategist at Interactive Brokers.
Trump’s win is considered as a boon for Elon Musk’s companies, as the founder aggressively backed the “Make America Great Again” ticket.
musk fans fuel Destiny Tech100 frenzy
Tesla, which is the only publicly traded entity of Musk’s empire, climbed back over $1 trillion in market value last week after slumping badly through the first four months of the year.
But it’s SpaceX that may be the real prize for retail investors. While its soaring premium makes it a dramatic case in point, Destiny Tech100 is becoming a go-to vehicle for a cohort of day traders. The fund’s more than $400 million valuation is the highest since April, and it’s trading at almost 10 times its NAV, a premium that puts it among the highest of similar closed-end funds.
“This is definitely part of the post-election rally, particularly as it relates to Elon’s companies,” said Bloomberg Intelligence ETF analyst James Seyffart. “The issue with DXYZ is that it’s a closed-end fund, which means there’s no mechanism to bring the share price in-line with the NAV like there is for ETFs. Compounding things for this particular fund is that it holds a lot of private assets like SpaceX, which don’t even have a publicly traded price or valuation.”
Since the fund’s debut in March, it has gone through stretches of extreme volatility.
At one point in April, it skyrocketed over 1,000% only to fall back flat again in weeks. The private space industry could benefit under a Trump presidency, given SpaceX CEO Elon Musk’s close ties to Trump and strong support throughout the campaign. Changes could be coming to the Federal Aviation Administration’s commercial space office, which oversees private rocket launches, according to Reuters.
Sources also told Reuters that human manned missions to Mars will become a bigger national priority during Trump’s second term. “At a minimum, we’re going to get a more realistic Mars plan. You’ll see Mars being set as an objective,” said Doug Loverro, a space industry consultant who worked for NASA during Trump’s first term.
SpaceX may stand to gain the most, considering that Musk endorsed Trump for president and donated millions to his campaign. With Trump set to take the White House again, NASA may shift to supporting fixed-price space contracts that place more responsibility on private companies. NASA’s Artemis program currently plans to use SpaceX’s Starship for moon missions as a step toward Mars, but the program could be shifted to prioritize missions to Mars.
At the time of writing, Destiny Tech100 shares were up 14.6% at $41.77.
Cameron is a highly regarded contributor in the rapidly evolving fields of artificial intelligence (AI) and machine learning. His articles delve into the theoretical underpinnings of AI, the practical applications of machine learning across industries, ethical considerations of autonomous systems, and the societal impacts of these disruptive technologies.
