Day traders riding the Musk effect in election aftermath

Day traders have embarked on a buying spree, acquiring assets associated with Elon Musk after Trump's election victory. These assets encompass stocks and highly volatile cryptocurrencies, including Dogecoin and Trump-themed memecoins.

Elon Musk has consistently exerted substantial influence over the cryptocurrency market, notably triggering significant price fluctuations through tweets in the past. Notably, he emerged as one of Trump's primary supporters and a pivotal figure during the latter stages of the former president's campaign.

Subsequent to Trump's triumph earlier this month, Elon's corporations have flourished, experiencing substantial gains in the trading sphere. Day traders have since commenced tapping into assets related to him and his entities, encompassing both stocks and cryptocurrencies.

Traders Leverage DXYZ to Invest in SpaceX

The Destiny Tech100 ETF (DXYZ) empowers traders to gain exposure to Elon Musk's SpaceX shares. SpaceX, an otherwise challenging asset to invest in due to its private status, benefits from the ETF's substantial stake in the company, which constitutes 38% of its assets. DXYZ also possesses significant holdings in OpenAI, Stripe, and Discord.

The ETF incurs high management fees, approximately 2.5%, and investing in shares of private companies entails significant risk. Nevertheless, investors have perceived the opportunities as sufficiently compelling to overlook these hazards.

In the words of Bloomberg's ETF analyst James Seyffart, "DXYZ operates as a closed-end fund, implying the absence of a mechanism to align share price with net asset value (NAV) as in traditional ETFs. This particular fund further complicates matters by holding private assets like SpaceX, which lack public trading prices or valuations."

DXYZ stands apart from conventional tech ETFs, offering indirect access to private market gains that would typically necessitate venture capital investment.

The ETF's value surge has established a new record for the fund, with its current valuation surpassing $400 million, the highest since April. Notably, it trades at almost 10 times its NAV.

Despite experiencing an impressive surge, the fund's performance has been highly volatile since its inception, with the post-election frenzy driving a significant portion of its gains.

Elon Musk and Day Traders Profit from Post-Election Craze

Elon Musk's endorsement of Trump has proven to be a strategic move for the world's wealthiest individual. Following his vocal support for the former president, his assets have witnessed dramatic market surges.

Prior to the election, Musk's tweets and rally appearances sparked trading frenzies, propelling asset values by 64% and subsequently by an additional 38%. Memecoins such as Dogecoin also benefited from the buying spree, gaining approximately 20%.

Tesla, Musk's sole publicly traded asset, likewise achieved a historic rise, surpassing $1 trillion in market capitalization last week after a stagnant performance during the year's first four months. His businesses appear to thrive amidst market volatility. Tesla's previous surge to such a high market valuation also stemmed from a trading frenzy in 2021.

Presently, day traders have joined the trend by investing in the Destiny Tech100 ETF (DXYZ), a controversial closed-end fund established this year, which has experienced a remarkable 280% surge post-election, as reported by Bloomberg.