American Bitcoin reported a net profit of $3.5 million in the third quarter of 2024, successfully reversing last year’s losses. According to the company’s earnings report released on Friday night, revenue for the September quarter rose significantly from $11.6 million in the previous year to $64.2 million. This remarkable growth was attributed to increased efficiency in cryptocurrency mining and reduced operational costs, effectively restoring the company’s strong market position. Additionally, the gross profit margin improved from 49% in the prior quarter to 56%, indicating sustained operational efficiency despite a cooling in cryptocurrency prices earlier in the year. Bitcoin itself experienced a 2.6% decline on Friday.
Trump Family Expands Crypto Ventures
After former U.S. President Donald Trump’s return to office, investors anticipated more relaxed regulations, boosting American Bitcoin’s momentum. The Trump family plays a direct role in the company’s structure: Eric Trump serves as co-founder and chief strategist, while Donald Trump Jr. is a shareholder. Following the earnings report, Eric Trump highlighted the company’s expanding asset portfolio by announcing the addition of over 3,000 Bitcoins to their reserves since their Nasdaq debut. As of November 5, the company’s holdings amounted to 4,004 Bitcoins, valued at approximately $400 million.
American Bitcoin operates as a majority-owned unit of Hut 8 Corp and is another crypto initiative linked to the Trump family. Other ventures include a meme coin project and the World Liberty Financial platform, partially owned by Donald Trump. Company CEO Mike Ho emphasized their advantage, stating, “Unlike companies that buy Bitcoin from the markets, we mine it at half the cost.” American Bitcoin continues to produce its own Bitcoin rather than purchasing it at market price.
Eric Trump also addressed the rising US-China trade tensions following his father’s return to office, asserting that a potential 100% import tariff would not affect them. Despite sourcing mining equipment from China, the decline in energy prices supports their operations.
In conjunction with these developments, other companies in the sector also emphasize cost advantages. For example, last week Marathon Digital announced the renewal of its energy supply agreements, reducing its overall mining costs. This is seen as another sign of intensifying cost competition within the mining industry.
Crypto Shares Fluctuate Amid Bitcoin Decline
After the earnings report, American Bitcoin shares initially rose but declined by 1.3% in morning trading, mirroring the decrease in Bitcoin’s price. This pattern is common among companies holding crypto reserves, as their value is directly tied to token prices. Despite this, companies like American Bitcoin continue to increase their reserves even during market downturns, maintaining leverage from previous rallies.
Interest in the crypto sector persists despite cooling prices. The Trump administration has declared its aim for the US to lead globally in crypto and reduce regulatory pressure. However, the growing influence of the Trump family in the industry raises conflict of interest concerns. Ethics experts highlight the risks of a policymaker operating a family business in the same industry.
In summary, American Bitcoin’s turnaround from loss to profit within a year demonstrates the significant roles of cost management, energy prices, and political climate in crypto mining. Although the company is central to both political and economic fluctuations, it has strengthened its position by increasing reserves. The ongoing debates regarding family ties and their potential impact on the company remain crucial questions for the future.