Is Space the Economic Frontier?

By Oliver Rahman

TO THE MOON!

Space is something we all thought of as a kid. We all dreamed of moon bases and trips to mars when we grow up. Sadly, there seems to be a lack of that currently, but not for long! According to McKinsey & Company, the space industry could be worth $1.8 trillion by 2035. NASA's programs like Artemis (which aims to land someone on the moon AND create a moon base by 2030) and SpaceX's plan for mars in the next decade show an newfound interest by the government and private companies to go to space in the near future. By 2035 we could potentially have bases on the Moon and Mars with dozens of people on each, which also means a new lucrative market could emerge. 

The main growth for the space economy, currently, is the greater need for connectivity with satellites. AI insights and new technology is also requiring more satellites and greater consumption, further increasing the space industry's capitalization. Mckinsey and Company in 2023 estimated that the space industry is currently worth ~630 billion, meaning demand could increase 200% in the next 10 years! An average return of 20% per year. Companies that benefit from this new space race might become global leaders and top the market caps of the NYSE and NASDAQ soon. 

Space profitability

Lunar and Martian landings could unlock discoveries worth billions, with helium-3 emerging as a major catalyst. This rare isotope, crucial for fusion energy, is scarce on Earth but abundant on the Moon. As space industries establish operations, they won’t just capitalize on fusion—they could become the primary suppliers of the key ingredient for limitless energy, revolutionizing Earth’s power systems and creating billions in profit.

Elon Musk's plans for space

From VideoFromSpace

Elon Musk, in a recent speech, also reignited the future for mars missions, planning on sending thousands of starships carrying supplies and people to the red planet. These new starships would be created at their new Texas factory, hopefully making a few per week. Elon Musk says there's a "50/50" chance of them sending starships to Mars by the end of 2026, and the ships arriving in 2027. However, knowing Elon Musk with his broken promises from the past, we may need to wait longer for starships going to mars to be a reality. 

However, NASA's Artemis mission is looking much more likely! With a very good chance of NASA landing astronauts and a creating a permanent base there by 2030. When NASA lands it might create another space race by other countries to get to the moon, too. Billions may pour into NASA's budget following these landings helping them accelerate to mars and beyond in our solar system. However political changes and budget cuts could still affect NASAs mission in the following years.

How can I benefit from this new race?

Benefitting personally from the potential space race is tricky, as most going to the planets/creating satellites are private/government entities. However, ETF investments such as $ARKX and $UFO are good options as they have several small public companies that will benefit indirectly to directly. Companies like Intuitive Machines and Rocket Lab USA will become more important and profitable as the space race expands. However, remember that I am not a financial advisor and this is not financial advice, make sure to read the disclaimer on my blog and do your own research!

The space race could be the new internet profit-wise, even though I am quite optimistic of all this happening within the next 10 years, space travel and exploration will happen eventually one way or another. Even if it takes a century, though let's hope it doesn't take that long! The sooner we get to space the faster (and more profitable) humanity becomes.

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