Source: WSJ
Written by: Konrad Putzier
Translated by: Deloris
Not long ago, on a Wednesday night, Captain Gordon McCullough of the Space Force was flying in a military propeller plane high above the quiet, dark skies of New Mexico when his squadron's group chat exploded with excitement—members of the squadron, some on the ground and some in the air, were conducting an electromagnetic warfare data collection mission, but their minds were on something else: Google's stock price had suddenly soared in after-hours trading. After landing, McCullough saw a news screenshot sent by a ground officer pop up in the chat, followed by someone replying, "We're about to take off." For McCullough and his comrades, it was destined to be a day of great gains.
The U.S. military may well be the world's most aggressive investment club, thriving in this bull market. Active-duty service members are raking in profits in tech stocks and the Bitcoin market, even exchanging niche cryptocurrency investment tips on aircraft carrier decks. As the stock market continues to hit new highs, the parking lots of military bases are increasingly filled with new Porsches and Hummers, while combat-clad influencers share wealth-building secrets with their followers on social media.
As a flight test engineer, McCullough has heavily invested in nuclear power-related companies, betting that the boom in artificial intelligence data centers will ignite electricity demand. So far, the results have been impressive—some of his holdings have doubled since this spring, but the 27-year-old officer is also pondering: how long can this party last? "To be honest, I don't understand why the market can keep going up like this," he admits. Despite recent market fluctuations, U.S. stocks have surged since April, quietly boosting the net worth of this unique group of investors.
Active-duty service members have fueled the cryptocurrency surge that began in the fall of 2020 and peaked in 2021. An analysis of IRS data by The Wall Street Journal shows that in 2020, eight of the top 25 tax zip codes in the U.S. for reporting cryptocurrency transactions or disposals were located near military bases. Bitcoin prices quadrupled that year. By 2021, this proportion rose to 11 out of 25 zip codes. According to IRS data, in 2021, 16.3% of individual income tax returns filed in the area surrounding Holloman Air Force Base in New Mexico reported receiving, selling, exchanging, or disposing of cryptocurrency. The figures were even higher around Luke Air Force Base in Arizona (19.4%) and Vandenberg Space Force Base in California (18.1%). Nationwide, only 4.1% of tax returns checked this box.
According to the latest IRS data released for 2022, military bases have lost their dominance in the cryptocurrency investment space. As cryptocurrency prices plummeted that year, the number of people reporting cryptocurrency transactions both inside and outside the bases sharply declined. However, this year-long cryptocurrency frenzy—along with the concurrent meme stock craze—has deeply immersed an entire generation of service members in the investment game.
While many active-duty service members adhere to a long-term investment strategy focused on index funds, some are keen on short-term speculation, concentrating large amounts of assets in a few stocks or tokens. These investors tend to be young, lacking other perspectives beyond market growth, and almost never set up risk hedges. "If the market experiences a significant correction, they will be hit hard," warns financial advisor and Air Force veteran Brian O'Neill. Many have already suffered painful losses from misguided bets, but the military culture tends to favor boasting about successes rather than reflecting on failures. "There's a culture of bragging here," O'Neill points out.
The experience of Coast Guard Staff Sergeant Bryson Sanders has been a rollercoaster: in 2021, after hearing new recruits at the Tampa base boast about cryptocurrency profits, he followed suit by buying Dogecoin, while also investing in Bitcoin, the popular meme stock GameStop during the pandemic, and "all the crazy rising assets." He said, "At that time, I just wanted to take a gamble for a chance to turn things around."
Although Sanders profited from Tesla stock, he faced a loss of over $10,000 in a single day while trading a financial product that leveraged bets on the stock of MicroStrategy, a company holding Bitcoin (now renamed Strategy). After this setback, he has shifted to a portfolio primarily focused on stock market index funds. Additionally, through his side hustle as an influencer on TikTok and Instagram, he earns a five-figure income each month.
Speculative Hotbed
Military bases are a natural breeding ground for investment frenzies. They attract a large number of young people—many of whom are natural risk-takers—who have both leisure time and disposable income, and they rarely hold back when discussing personal finances, as military pay standards are publicly available and uniformly distributed by rank. While the military provides guaranteed pensions after 20 years of service and unparalleled job stability, it does not offer hefty salaries or six-figure year-end bonuses.
Service members have always been active investors. Some use zero-down loans from the Department of Veterans Affairs to purchase rental properties; during the inflationary period of the 1980s, sailors on nuclear missile submarines spent months discussing gold bars and raw diamonds; and tech stocks were all the rage in the late 1990s. However, two intertwined waves over the past two decades have greatly fueled the culture of wealth in the military: one is the rise of trading websites and apps like Robinhood that have lowered the barriers to investment, and the other is the ongoing wars.
Since the early 21st century, hundreds of thousands of troops have been stationed at remote bases in Iraq and Afghanistan. They receive hazardous duty pay, separation allowances, and are exempt from federal income tax. This sudden influx of extra income has led them to seek places to invest their money. F-16 pilot Sean Walsh opened his first brokerage account while stationed in Iraq in 2008. His primary job was bombing, but during downtime, he often had to stand by in a waiting room not far from the fighter jets for hours. With nothing to do in their flight gear, he and his colleagues began discussing investment strategies. Having just graduated from college, Walsh had his first significant savings, initially investing in mutual funds, then moving on to index funds, individual stocks, and rental properties. According to him, by the time he retires from the Air Force in 2024, he will be worth millions.
In 2013, Air Force transport pilot Spencer Rees flew back and forth between Kyrgyzstan and Afghanistan transporting soldiers, recalling, "Every flight mission felt like a crash course on different investment strategies." Someone introduced him to investing in gas stations and 7-11 convenience stores, another recommended a covered call options strategy, and yet another was passionate about Bitcoin. During long flights, Rees would read investment books. While the military provides basic training on saving, budgeting, and investing, word-of-mouth sharing of experiences is often more valued. There is fierce competition among service members, but also a deep camaraderie that extends into the investment realm—when someone makes money, they actively share their experiences, hoping their comrades can profit too. It has become common for officers to pull out their phones to show off their investment account balances.
Cryptocurrency spread like wildfire in the military in the early 2020s. Navy Major Zach Rodriguez invested over $100,000—half of his family's savings—into tokens like Chainlink, Polkadot, and Quant. This interest began during his time cruising the Pacific on an aircraft carrier, discussing investments with his comrades.
In 2020, Navy Major Zach Rodriguez took a photo next to a helicopter. That Pacific cruise mission marked the beginning of his journey into cryptocurrency investment.
Initially, he profited greatly due to the soaring value of the coins, but then the digital currency market crashed, and he claims to have been scammed out of $250,000 worth of cryptocurrency. Now, this helicopter pilot has become a "Bitcoin HODLer": focusing on investing in Bitcoin and its related companies, revealing that his holdings have risen to about a million dollars.
The meme stock frenzy also swept through the military with a thunderous force. In 2021, Air Force health services administrator Chief Master Sergeant Durell Bailey was in a classroom at George Mason University with over twenty fellow service members pursuing master's degrees when someone mentioned a stock of an education technology company called Chegg. The stock price was falling at the time, and the informant claimed it was a great opportunity to buy the dip. "He urged us, 'Buy in quickly before the stock rebounds,'" Bailey recalled. As soon as he finished speaking, eight or nine people pulled out their phones to buy the stock.
In 2019, Chief Master Sergeant Durell Bailey was photographed in Arizona. Over the past decade, he has made the leap from zero savings to a six-figure net worth.
Bailey, who invested a few hundred dollars, ultimately ended up losing. Chegg's stock briefly soared above $113 per share in early 2021 but fell below $25 by the end of the year, with recent trading prices closer to $1.
No matter where they are, stocks and cryptocurrencies always become topics of conversation for Bailey and his colleagues. "We discuss it in the barracks, in the gym, and in the cafeteria," he admits. When he enlisted in 2015, Bailey had no savings. Now, at 31, he and his wife have a net worth firmly in the six-figure range, largely thanks to investments in stock index funds. "We have laid a solid foundation for the future," Bailey said.
New Wealth and New Concerns
Signs of wealth growth around military bases are everywhere. Army Warrant Officer Eric Rawlins (a helicopter pilot stationed in Colorado and currently deployed in the Middle East) revealed that he recently purchased a $10,000 Rolex watch to commemorate a milestone: his stock investment returns have finally surpassed his military salary.
Many others share similar experiences. This 29-year-old service member stated, "You can see quite luxurious cars everywhere on the base."
Some financial advisors and veterans worry that this good fortune may not last. Price-to-earnings ratios are nearing historical highs, and stock indices are increasingly dominated by a handful of tech companies. "I'm concerned that we may be facing a bubble burst," said retired Army officer David Ashcraft. During the tech boom of the late 1990s, Ashcraft, then a young lieutenant, bought stocks in Cisco and Sun Microsystems. When the market crashed, the value of his individual retirement account plummeted from $10,000 to about $3,000. Since then, he has consistently invested in index funds. "If someone tells me they have all their money in cryptocurrency or a few stocks," he said, "I always feel worried."
Bonds have largely fallen out of favor among service members, as their performance has lagged far behind stocks in recent years. Moreover, few report holding large amounts of cash. Many service members believe they can take on higher risks because they have job security and guaranteed pensions after 20 years of service. Even conservative investors face more risks due to market characteristics. Space Force officer McCullough stated that a few tech and energy-related stocks now account for a significant portion of his net worth simply due to their substantial appreciation.
Even in a bull market, high-risk bets can end in disaster. In 2023, Marine Corps truck driver Moises Gonzalez, stationed in Albany, Georgia, made $38,000—only to lose $20,000 in day trading of gold and stocks.
"Some days are really tough because I just keep losing, losing, losing," he admits. His maximum loss in a single day reached $15,000, while his highest profit in a day was $6,000. He set up three computer monitors in his base dormitory—a scene that once made a colonel frown during a routine inspection—and even brought his laptop to the vehicle dispatch area to trade during his free time in the early morning. Over time, Gonzalez's trading skills have gradually improved. In 2024, he made a profit of $30,000 through day trading. A few months ago, he left the Marine Corps, moved to Hawaii, and began trading full-time. This 25-year-old hopes to net $10,000 a month in the market but has yet to reach that goal. "I can make $7,000 in three or four days," he said, "but on the fifth day, I lose it all."
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