American Bitcoin's Stock Plummets Amidst Broader Crypto Market Decline
American Bitcoin's ABTC stock experienced a significant drop on Tuesday, losing over half its market value in just 30 minutes. This sharp decline triggered multiple trading halts. The miner, co-founded by Eric Trump, was dragged down with the rest of the crypto market, as Bitcoin itself fell more than 30% from its October peak, impacting all risky crypto investments still in play.
The market wipeout followed a massive liquidation event on Monday, which saw nearly $1 billion in leveraged crypto positions vanish. By Tuesday, markets had temporarily stabilized, but this offered little respite for American Bitcoin. The damage had already been inflicted.
Crypto Miner's Early Rally Fades, Leading to Steep Valuation Drop
American Bitcoin launched earlier this year as a spinout from Hut 8 Corp. The mining venture initially garnered significant hype, with traders rapidly pushing its stock price upward. However, since its September peak, the company has now lost over 78% of its value.
Despite reporting a net income of $3.5 million and $64.2 million in revenue for the third quarter in November, these earnings did not prevent the market's negative reaction. The market was already punishing any assets linked to cryptocurrency.
This downturn has also affected the Trumps. Donald Trump Jr., who holds shares in American Bitcoin, has seen his investment losses accumulate. The family's other crypto ventures are also experiencing difficulties.
WLFI, the token associated with the Trump-backed DeFi platform World Liberty Financial, has fallen more than 30% since September. ALT5 Sigma, which holds WLFI, has seen its value decrease by over 80% from its highest point.
Eric Trump, who was instrumental in launching the miner, expressed a resilient outlook. He told Bloomberg News that he is not reconsidering his involvement. "What a great buying opportunity," he stated. "People who buy dips and embrace volatility will be the ultimate winners. I have never been more bullish on the future of cryptocurrency and the modernization of the financial system."
Bitcoin's history is marked by significant price drops, but the Trumps' involvement extends beyond just holding coins. They have established a presence across the cryptocurrency industry. This diversification helps to mitigate some of the financial impacts, but the losses have not ceased.
Trump Media Faces Losses as Cryptocurrency Investments Sour
Trump Media & Technology Group Corp., the company behind the Truth Social platform, reached a record low on Wednesday. This decline coincides with the company's increasing exposure to cryptocurrency.
Donald Trump, who holds the largest stake in the company through a trust overseen by Donald Jr., has seen that stake lose approximately $800 million since September.
Despite not being profitable, Trump Media deepened its involvement in crypto. In a July filing, the company disclosed spending roughly $2 billion on Bitcoin and related assets. Its holdings include 11,500 Bitcoins, acquired at an average price of approximately $115,000 each. With current prices lower, this position now represents a 25% paper loss.
The company's investment strategy extended further. Trump Media also acquired a substantial amount of CRO, a token issued by Crypto.com, a Singapore-based cryptocurrency exchange. By the end of September, the value of this holding was approximately $147 million. Since then, CRO has depreciated by roughly 50%.
Crypto.com is also collaborating directly with Trump Media on the development of a new prediction platform named Truth Predict.
The Truth Predict app is designed to allow users to place bets on sports and political events, further integrating the Trumps into the expanding cryptocurrency ecosystem. The project is currently still under development.