Elon Musk’s SpaceX IPO could trigger major corporate Bitcoin shift (2:23)
When Elon Musk's spaceflight and artificial intelligence (AI) company SpaceX made its public debut on June 12, the first thing that caught the attention of the crypto community was the firm's large Bitcoin (BTC) holdings.
With 18,712 Bitcoin on its balance sheet as of March 31, SpaceX is one of the largest public companies to hold the digital asset treasury (DAT) focused on the leading cryptocurrency.
For the crypto community, SpaceX is not only Musk's dream project but a Bitcoin proxy too. Musk himself has often hailed cryptocurrencies like Bitcoin.
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Nobel Prize-winning economist questions SpaceX's valuation
While the mega initial public offering (IPO) has turned Musk into the world's first trillionaire, not everyone is enthusiastic about SpaceX's valuation.
American economist Paul Krugman, who won the Nobel Memorial Prize in Economic Sciences in 2008, wrote about the hype surrounding the SpaceX IPO in a blog post on June 17.
Nobel Prize-winning economist Paul Krugman delivers a speech at the Asian Financial Forum in Hong Kong on January 20, 2015.
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He reminded the readers that the company posted a $4.9 billion loss on $18.7 billion in revenue last year, in contrast to profitable companies like Microsoft (Nasdaq: MSFT). Yet, SpaceX's valuation hit $2.75 trillion on June 17.
Krugman argued that investors are putting such a high valuation on the company because of their faith in Musk, whom they believe to be a "wizard."
He said Musk holds "enormous" political influence through his close ties to President Donald Trump but questioned if his company's valuation should be assessed based on the technological prowess or the trillionaire's access to the "fruits of crony capitalism."
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Krugman compares SpaceX and Bitcoin
But the economist wondered how much such "blatant favoritism" can deliver, drawing a comparison between SpaceX and Bitcoin.
Trump had once called Bitcoin a "scam" but embraced it during the 2024 presidential election campaign, Krugman reminded.
After Trump won the election in November 2024, Bitcoin's price began to soar as the president promised to make the U.S. the "Bitcoin superpower of the world."
In fact, the cryptocurrency hit the all-time high (ATH) of $126,080 on Oct. 6, 2025.
At its peak, Bitcoin's valuation was around $2.5 trillion. The figure is nearly the same as that of SpaceX's current valuation, Krugman highlighted.
But Bitcoin became a victim of the Oct. 10 "flash crash" last year when Trump threatened a 100% tariff on China.
Krugman then called crypto a "Trump trade," arguing that the crash had "little to do with economics and everything to do with politics."
"At this point crypto is largely a Trump trade," he wrote in a post on Oct. 14, 2025. "And crypto fell because the backlash against the potential trade war threatened to weaken Trump politically."
As Trump's poll numbers and political leverage began to sink, Bitcoin fell, he further said in his latest post. Those early to the "Trump trade" made money by dumping their Bitcoin holdings on "Trump believers," he added.
Krugman has been an early critic of Bitcoin, arguing as early as 2011 that it has suffered a massive deflation. In a December 2017 interview, he argued that only Bitcoin's "mystique" has led to a price surge so far, and its "bubble" is "more obvious" than the housing bubble.
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Krugman calls SpaceX 'meme stock'
Krugman admitted that SpaceX is different from Bitcoin and has a profitable division called Starlink but added only incredible growth in Starlink can justify SpaceX’s valuation. But that's not "remotely possible," he added.
Similar to Bitcoin, early SpaceX shareholders will be the "only winners" who create a "market frenzy" and exit before the bottom falls out, he predicted.
"SpaceX is essentially all about hype. It is, in effect, a $2.75 trillion meme stock," Krugman concluded.
A meme stock's price dramatically soars based on viral internet hype and social media sentiment rather than the company's underlying financial performance. Notably, Musk has often talked about his love for meme coins like Dogecoin (DOGE).
The SpaceX stock was currently trading at $179.52, with a valuation of $2.36 trillion.
Bitcoin was currently trading at $62,498 with a valuation of $1.25 trillion, as per Decibel.
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