GM. This is Milk Road, the crypto newsletter that's the launch codes for your trading day.
Here’s what we’ve got for you today:
- ✍️ Why we sold HOOD for SpaceX.
- 🎙️ The Milk Road Show: Bitwise: Has Bitcoin Bottomed Or Is The Worst Still Ahead? w/ Matt Hougan & Ryan Rasmussen.
- 🍪 Pssst… come work with us!
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WHY OUR HEAD OF RESEARCH SOLD HOOD TO BUY SPCX 🚀
Last week our Head of Research, Kyle, trimmed a crypto-adjacent equity position (Robinhood) after a strong run and rolled the cash into a new name:
SpaceX (heard of it?).
At the same time, our AI researcher Melvin opened a SpaceX position of his own.
Here's what they're seeing:
SpaceX went public on June 12 in the biggest IPO in history, raising about $75B and making Elon Musk the world's first trillionaire.
It IPO’d at $135, ripped to $225 within four days, and has since settled back to ~$158.
It's a hot, jumpy stock - with (fun fact) 18,712 Bitcoin in its corporate treasury, acquired at an average price of ~$35k per coin.
One of the key reasons Melvin is bullish on SpaceX traces back to February - when SpaceX bought xAI (Elon's AI company).
That gave one ticker exposure to rockets, Starlink, and a full AI operation.
And that AI operation has started selling (or at least, renting out) one of the most valuable commodities in today’s world:
Raw computing power.
SpaceX leased its Colossus 1 supercomputer (220,000 Nvidia chips) to Anthropic, the maker of Claude, for roughly $1.25B per month…
Then it went and signed a second deal with Google, worth ~$920M per month…
That’s a cool $2.1B of revenue found beneath the couch cushions.
There's a wrinkle though…
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WHY OUR HEAD OF RESEARCH SOLD HOOD TO BUY SPCX (P2) 🚀
xAI built more compute than it could use, Grok's usage slipped, and renting the idle capacity to rivals is how it's earning the money back.
I.e. A spending problem turned into a paycheck.
But there's a bigger, adjacent swing being taken:
AI compute in space.
Musk wants to build AI satellites and a giant chip factory, then scale toward a terawatt of compute. That's roughly twice the electricity the entire U.S. uses today (in orbit).
The near-term target is about 1 gigawatt of compute in orbit by the end of 2027, then 10x a year after that.
Musk says to treat that timeline as a best guess, not a promise. Meanwhile, Sam Altman has called orbital data centers "ridiculous for now."
Point being: the space story is early, and far from a sure thing.
Which is why neither of our guys is betting the farm.
Kyle is playing SPCX as a short-term trade first:
The float (the slice of shares actually available to trade) is thin, so the price can swing fast in both directions.
He sees room to run, but expects a sell-off later this summer.
Melvin's the long-term bull - but even he's pointing out the risks:
Starship delays, regulatory pushback, fights over satellite spectrum, a buildout that runs into the tens of billions, and an Anthropic lease that is short-term (cancellable by either side).
Add it up and you’ve got real revenue, a wild long-term vision, real risks, and a price that's already run hot.
That’s enough for two of our analysts to start buying… c arefully, at least.
And if you’re thinking: “Hold up! Your Head of Research is selling crypto stocks for AI!?” What the hell dude…”
I hear you - and that’s on me. I painted a pretty narrow scene within a much larger picture. Kyle still holds Bitcoin, Ethereum, Coinbase, Sky, and Galaxy in his portfolio.
He’s just de-risking his exposure (which was previously close to 100% crypto).
The exact assets, prices paid and targets to watch for in Kyle’s re-balancing is all available inside Milk Road PRO.
PRO members have also been positioned across the supply chain that this whole AI buildout leans on:
- Micron (MU) for memory, up 217% in 3 months.
- Nebius (NBIS) for compute leasing, up 146%.
- Bloom Energy (BE) for power, up 130%.
SpaceX is just the newest piece.
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Matt Hougan: There's actually strong academic literature on calling crypto turning points - and right now the signal is flashing red.
John Gillen: "The entire digital asset space is severely undervalued, overlooked, and undercapitalized right now."
Pssst… come work with us: We’re hiring a new analyst, covering stocks with a focus on AI investments and other emerging technologies (robotics, space and biotech).
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