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SpaceX (SPCX) Bond Sale Dumps Prices
SpaceX is under heavy selling pressure right now. The stock fell 16% (from $176 to $154) during yesterday’s trading hours, and perpetual futures on Lighter are trading for $148 in Tuesday’s early morning hours.
These are SPCX’s lowest prices since the company’s June 12th IPO, and the stock has erased approximately $600B in value over the last three trading sessions.  Two factors likely triggered the sell-off. The first was SpaceX’s announcement to raise $20B through its first-ever bond sale. The purpose of the sale is to raise money to fund its AI buildout following the acquisition of xAI. Apparently, the market isn’t happy that SpaceX needs a loan to fund this project. And the second reason appears to be possible broader weakness in AI-related stocks (i.e. Nasdaq down 2.6% in early morning hours, larger pull-backs in AMD, GOOG, MU, SNDK, etc).
Now despite the sharper tech stock correction, Bitcoin has fared relatively well — it’s down, but not nearly as much as most of the others above. This divergence is due to Bitcoin being much closer to a macro bottom. The 100K tourists are gone, and we’re in deep HODLer territory. We still should prepare for Bitcoin to go lower, but the risks of larger downside moves for Bitcoin are less than for tech stocks, given the former is over-sold and the latter is over-bought.
Trump Signs Quantum Executive Orders
President Trump signed two executive orders yesterday aimed at both developing a powerful quantum computer and protecting US systems from future quantum threats.
The first order directs the government to accelerate the development of a large-scale quantum computer, with the goal of delivering at least one machine to the US Department of Energy. No hard deadline was established, and it’s important to note that no general-purpose quantum computer has ever been developed that can outperform today’s classical supercomputers on real-world problems. So Trump’s order represents a push to change that, though success isn’t certain.  The second order requires federal agencies to migrate their most sensitive systems to post-quantum cryptography (PQC) by the end of 2030, and digital signatures by the end of 2031. So Trump’s EO significantly pulls forward an earlier Biden administration EO which called for the same by 2035. For comparison, Google and Ethereum have internal PQC migration targets for 2029. Mature PQC upgrades are currently available for many systems.
With regards to Bitcoin, developers are actively researching and proposing quantum-resistant solutions (see BIP 360 & 361), but developers and node operators are still debating the best path forward.
Overall, Trump’s EOs increase the momentum of the entire quantum industry, and monitoring the government’s progress (or lack thereof) with regards to the computer’s development gives Bitcoiners signal as to how fast (or slow) they should migrate to an upgrade.
US PCE and GDP Prints Coming Thursday
Two major US economic releases are scheduled for Thursday, and both have the potential to move the markets, particularly in the midst of the market’s confusion as to whether new Fed Chair Warsh is a hawk or a dove.  The first is Core PCE for May. This is the Fed’s preferred inflation measure. The previous Core PCE print showed a 3.3% YoY increase and a 0.2% MoM increase. Forecasts are showing a 0.3% MoM increase for May. A hotter-than-expected print likely reinforces expectations for a more hawkish Fed, which puts pressure on risk assets. However, the market might not react as negatively to a hot print, given the US - Iran peace deal continues to look somewhat promising (i.e. market might think inflation is transient and fading due to the Strait of Hormuz reopening).
The second is the US GDP for Q1. GDP measures the economy’s growth rate, and it’s closely watched by the Fed as it helps assess labor market health and broader economic conditions. The previous Q1 print came in at 1.6%, and that’s also the current forecast. A significantly stronger print means the economy is strong, and that reduces the odds of near-term cuts.
We think the markets are uncertain as to whether Warsh is a hawk or dove. Therefore, it’s possible that Thursday’s prints have an out-sized effect on moving asset prices.
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