Nobel Laureate Paul Krugman Brands SpaceX a “$2.75 Trillion Meme Stock,” Citing Bitcoin Parallel

Space Exploration Technologies Corp. (SpaceX) recently completed its colossal initial public offering (IPO), sending its market capitalization soaring to an unprecedented $2.75 trillion. This astronomical valuation has drawn a severe warning from Nobel Prize-winning economist Paul Krugman, who has controversially labeled the aerospace giant a “meme stock.”

Krugman Questions SpaceX’s Sky-High Valuation Amidst Losses

In a blog post dated June 17, Krugman expressed deep skepticism regarding SpaceX’s financial health versus its market valuation. He highlighted that SpaceX reported revenues of $18.7 billion last year but incurred a significant loss of $4.9 billion. This starkly contrasts with established, profitable tech behemoths like Microsoft, yet SpaceX’s market cap on June 17 reached an astounding $2.75 trillion. This figure, Krugman noted, is nearly equivalent to Bitcoin’s peak market capitalization of $2.5 trillion when it hit an all-time high of $126,080 in October 2025.

Krugman contends that investors are willing to assign such an “insane valuation” purely based on “blind faith” in Elon Musk, whom he describes as being treated like a “magician.” He further pointed to Musk’s considerable political influence, cultivated through close ties with former U.S. President Donald Trump. This raises a critical question for Krugman: Is the company’s exorbitant valuation built on genuine technological prowess, or is it a “sweet fruit” reaped from the “crony capitalism” enjoyed by the billionaire?

The economist pondered the actual benefits of such “blatant favoritism” before drawing a striking parallel between SpaceX and Bitcoin.

The “Trump Trade”: A Cautionary Tale from Bitcoin

Krugman reminded the public that Trump, who once lambasted Bitcoin as a “scam,” made a dramatic U-turn during his 2024 presidential campaign, enthusiastically embracing the cryptocurrency community.

Following Trump’s victory in November 2024 and his promise to transform the U.S. into a “global Bitcoin superpower,” the price of Bitcoin surged like a rocket. Indeed, Bitcoin achieved a new all-time high of $126,080 on October 6, 2025. Krugman specifically highlighted that Bitcoin’s total market capitalization at its zenith stood at approximately $2.5 trillion, closely mirroring SpaceX’s current valuation.

However, this bullish trend was short-lived. When Trump threatened to impose a 100% tariff on Chinese goods, Bitcoin became a casualty of a “flash crash” on October 10 of the previous year. Krugman, who sardonically dubbed cryptocurrencies the “Trump Trade,” asserted that this plummet had “nothing to do with economic fundamentals, but was entirely a result of political maneuvering.”

In an article last October, Krugman wrote, “Cryptocurrency is essentially a Trump Trade, and its price collapsed because of the backlash from a potential trade war, which threatened Trump’s political leverage.” He elaborated in his latest piece that as Trump’s approval ratings and political influence waned, Bitcoin’s value also declined. The “smart money” that had positioned itself early in the “Trump Trade” had already offloaded their Bitcoin holdings to loyal “Trump believers,” cashing in their profits.

SpaceX’s Future: A Bitcoin-esque Bubble?

Krugman now predicts a strikingly similar trajectory for SpaceX: “early shareholders will be the only winners,” who will deliberately cultivate market frenzy before exiting at the peak, leaving late-entry investors as the ultimate holders of depreciated assets.

While acknowledging that SpaceX and Bitcoin are not entirely identical, given that SpaceX’s Starlink division generates tangible revenue, Krugman emphasized a crucial point. He argued that unless Starlink demonstrates “unimaginable explosive growth” – a scenario he views as “almost impossible” – it cannot possibly sustain SpaceX’s current valuation.

“SpaceX is essentially all hype. To put it bluntly, it’s a $2.75 trillion meme stock,” Krugman concluded.

As of this writing, SpaceX’s stock price has settled around $185, bringing its market capitalization to just over $2.40 trillion, while Bitcoin trades at approximately $62,557, with a total market cap of about $1.25 trillion. The global investment community now watches with bated breath to see if this “capital carnival,” woven from the intertwined narratives of Musk and Trump, will indeed culminate in a bubble burst, as predicted by Krugman.