The U.S. Military is Obsessed with Stock and Crypto Trading, Stock Tips are Being Shared on the Aircraft Carrier Deck

Original Article Title: Top Gun Traders: Stock Bets and Crypto Culture Take Over the Military

Original Article Author: Konrad Putzier, The Wall Street Journal

Original Article Translation: Azuma, Odaily Planet Daily

On the Wednesday evening of the mission, U.S. Space Force Captain Gordon McCulloh sat in a military propeller plane, suspended in the calm and dim New Mexico night sky. The group chat of his squadron suddenly lit up.

Squad members—some on the ground, some in the air—were collecting electromagnetic warfare-related data while also keeping an eye on their investments. Google's stock had just surged in after-hours trading.

After landing, McCulloh saw the messages: a ground officer posted a news screenshot; another replied "To the moon." That day was turning out to be exceptionally profitable for McCulloh and his comrades.

The U.S. military may be the world's most powerful "investment club," and they are reaping huge profits in the current bull market.

Active-duty soldiers are earning a substantial fortune from tech stocks and Bitcoin, exchanging investment advice on obscure cryptocurrencies on the aircraft carrier deck. As the market continues to hit new highs, the base parking lots are filling up with more and more new Porsches and Hummers. Meanwhile, social media stars in military uniforms are telling their followers that they too can become wealthy.

As a flight test engineer, McCulloh has heavily invested in companies related to nuclear energy. He bets that the prosperity of AI data centers will further drive up electricity demand. So far, everything has been smooth sailing. Some of his stocks have more than doubled since the spring, although the 27-year-old officer is also pondering how long this bull run can last.

"I have to admit, I don't understand why the market can keep rising without any obstacles," he said. While there have been some recent fluctuations in the market, stock prices have been soaring overall since April, boosting soldiers' net worth.

Luke Air Force Base, located in Phoenix, was one of the areas with the highest cryptocurrency declaration rate in the 2021 U.S. tax return.

Since the fall of 2020, military personnel have been driving the cryptocurrency price surge that peaked in 2021. According to an analysis by The Wall Street Journal of data from the Internal Revenue Service (IRS), in 2020, among the 25 U.S. postal codes with the highest rate of reported cryptocurrency income or transactions, 8 were located around military bases. The price of Bitcoin approximately quadrupled that year. By 2021, this number had increased to 11 out of the top 25.

IRS data shows that near Holloman Air Force Base in New Mexico, 16.3% of personal income tax returns in 2021 indicated records of cryptocurrency receipt, sale, exchange, or disposal; the percentages were even higher near Luke Air Force Base in Arizona (19.4%) and Vandenberg Space Force Base in California (18.1%). In comparison, only 4.1% of tax returns nationwide checked the same box.

In 2022, military bases lost this prominent position—according to the latest annual data provided by the IRS. That year, amidst a crash in cryptocurrency prices, the number of individuals reporting cryptocurrency transactions both inside and outside the bases plummeted. However, the cryptocurrency frenzy of that year—and the simultaneous meme stock craze—hooked an entire generation of servicemembers on investing.

While many servicemembers are long-term investors primarily in index funds, some engage in short-term speculation or go all-in on a few stocks or cryptocurrencies. They are often young, having only experienced a rising market, and have few means to hedge risks.

“If the market has a big pullback, they will definitely feel the pain,” said financial advisor and Air Force veteran Brian O'Neill.

Some have already felt this pain, suffering significant losses in a bad bet, but servicemembers are more inclined to talk about their victories rather than failures. O'Neill said, “There is a culture of boasting here.”

Saunders recently purchased a Hummer with his additional income, both as a reward for himself and to support his side gig as a KOL.

This Coast Guardsman records investment and financial advice videos from his home studio in St. Petersburg, Florida, and surrounding locations.

Saunders made a profit on Tesla stock, but he said that last winter, he lost over $10,000 in a day while trading a leveraged financial product tied to MicroStrategy (the company that bought Bitcoin, now known as Strategy) stock. He has now mostly shifted to stock market index funds. He also earns a five-figure monthly income as an influencer on TikTok and Instagram.

His expertise lies in providing financial advice to military personnel through videos.

Action Hotspot

Military bases are fertile ground for investment frenzy. They are filled with young people—many naturally inclined to take risks—who have ample time, disposable income, and almost no taboos when it comes to discussing personal finance because military salaries are openly transparent and rank-based. Although the military offers a guaranteed pension after 20 years and unparalleled job stability, it does not provide generous salaries or six-figure year-end bonuses.

The military community has long been active in the investment space. Some leverage Department of Veterans Affairs zero-down-payment loans to buy investment properties for rent. In the early 1980s, a time of high inflation, soldiers confined in nuclear missile submarines for months passed the time discussing gold bars and raw diamonds. By the late 1990s, tech stocks became the national craze.

However, over the past two decades, two interwoven trends have significantly fuelled a culture of wealth-building in the barracks: the rise of websites lowering the barrier to trading and later apps like Robinhood, and the ongoing war on terror.

Starting in the early 21st century, hundreds of thousands of troops were deployed to remote bases in Iraq and Afghanistan. They received hazardous duty pay, family separation allowances, and were exempt from federal income tax. Suddenly, they had thousands of dollars in additional income and began looking for investment outlets.

In 2008, F-16 fighter pilot Shawn Walsh opened his first brokerage account while stationed in Iraq. His primary mission was to bomb insurgents, but between strike missions, he often found himself in a small shed a short taxiway distance from his aircraft, fully geared up. There, with nothing to do, he and other pilots would discuss various investment strategies.

Several military bases, including Vandenberg Space Force Base on the central coast of California, fueled the cryptocurrency frenzy from 2020 to 2021.

In 2013, Air Force transport pilot Spencer Reese flew back and forth between Kyrgyzstan and Afghanistan, transporting soldiers. "Each mission was like a crash course in different investment strategies," he said.

Someone told him to invest in gas stations and 7-Eleven convenience stores; another person recommended covered call options; and some liked Bitcoin. During the longer flights, Reese would read some investment books.

The military does have basic training courses on savings, budgeting, and investing, but word of mouth is often a more popular source of advice. While servicemembers are very competitive, they also have a strong sense of camaraderie—even in the investment field. Someone who makes money will tell others because they want their comrades to make money too. Officers often pull out their phones to show others their investment account balances.

In the early 2020s, cryptocurrency spread rapidly within the military like wildfire. Navy Commander Zach Rodriguez delved deep, investing over $100,000—equivalent to half of his family's savings—into tokens like Chainlink, Polkadot, and Quant. A friend got him interested in cryptocurrency while he was cruising the Pacific on an aircraft carrier.

In 2020, Lieutenant Commander Zach Rodriguez's photo by a helicopter, the Pacific cruise marked the beginning of his cryptocurrency learning journey.

As the coin values soared, he initially made significant profits but then faced a steep downturn. According to him, he was also defrauded of $250,000 worth of cryptocurrency. The helicopter pilot has now become a "Bitcoin hodler"—focusing on investing in Bitcoin and Bitcoin-related companies, and stating that his holdings have risen to around $1 million.

The frenzy of meme stocks similarly swept through the military with comparable force. Air Force Health Services Administrator Senior Airman Durelle Bailey was pursuing a master's degree at George Mason University in 2021 in a classroom with over twenty active-duty military personnel, when one person mentioned a stock of an education technology company called Chegg. The stock price had dipped, and according to that person, it was an excellent buying opportunity at the low.

"He was like, hurry up, buy now, or it's going back up," Bailey recalled. In an instant, eight or nine people immediately pulled out their phones to buy the stock.

Master Sergeant Durelle Bailey, seen here in 2019 in Arizona, saw his savings grow from zero to a six-figure net worth over the past decade.

Bailey had invested a few hundred dollars at the time, only to end up losing money. Chegg soared to over $113 per share in early 2021, then dropped to below $25 by year-end, with the recent price hovering closer to $1.

Wherever Bailey goes, stocks and cryptocurrency are a topic of conversation. "We talk about it in the barracks, at the gym, in the chow hall," he says.

When Bailey joined the Air Force in 2015, he had no savings. Today, his and his wife's net worth firmly stands at six figures, largely thanks to stock index funds. At 31, he says, "Our future is secure."

New Wealth, New Worries

Around the military base, signs of rising wealth are everywhere.

Army Second Lieutenant, currently deployed to the Middle East from Colorado, and helicopter pilot Eric Rawlings says he recently bought a $10,000 Rolex to celebrate a milestone: the money he earned from stock investments surpassed his military pay for the first time.

He's not alone. "The cars driving around the base are all pretty flashy," says the 29-year-old.

Lieutenant Eric Rawlings sporting the Rolex he purchased to celebrate his investment success.

Some financial advisors and veterans worry that the good times may not last forever. With P/E ratios nearing historical highs, stock indexes are increasingly dominated by a few tech giants.

"I worry that we may be on the brink of a bubble burst," says retired Army officer David Ashcraft.

During the late 1990s tech boom, then-young Lieutenant Ashcraft bought stocks in Cisco and Sun Microsystems. After the market crash, his IRA account value plummeted from $10,000 to around $3,000. Since then, he has stuck to index funds.

He said, "If someone tells me they've put all their money into cryptocurrency or just a few stocks, I would still worry."

Bonds have fallen out of favor among military personnel because their performance in recent years has been far below that of stocks. Few people hold a large amount of cash.

Many military personnel believe they can take on more risk because they have job security and can still receive a guaranteed pension after 20 years of service. Even conservative investors are exposed to higher risk due to market structure. Space Force officer McCulloh, stationed in New Mexico, says that several technology and energy stocks now make up most of his net worth simply because they have risen so much.

But high-risk bets can still go awry in a strong market. In 2023, Moises Gonzalez, a Marine Corps truck driver stationed in Albany, Georgia, with an annual salary of $38,000, lost $20,000 in a day trading gold and stocks.

Moises Gonzalez experienced the highs and lows of day trading on the equipment in his base dorm room.

"Some days I really can't take it because I just keep losing, keep losing, keep losing, keep losing," he said.

His largest single-day loss was $15,000, and his biggest gain was $6,000.

He set up three monitors in his base room—a scene that once made a colonel frown during an inspection—and even brought a laptop to the vehicle dispatch yard at work to take advantage of early morning trading opportunities.

Over time, Gonzalez's skills improved. In 2024, he made $30,000 from day trading. A few months ago, he left the Marine Corps and moved to Hawaii to start trading full time. The 25-year-old aims to earn $10,000 a month in the market but hasn't reached that mark yet.

He said, "I can make $7,000 in three or four days, and then lose it all on the fifth day."