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Shares in a US cryptocurrency miner backed by Donald Trump Jr and Eric Trump shed almost two-fifths of their value on Tuesday as early investors cashed out en masse at the end of a lock-up period.
American Bitcoin closed 38.8 per cent lower, wiping roughly $1bn from its market value. Trading volume in the stock was almost 40 times the daily average, according to Bloomberg data.
Eric Trump attributed the sell-off to investors in a $215mn private placement in June exercising their ability to “cash in on their profits for the first time”.
This is “why we will see volatility” in the company’s share price, the president’s son said on X. “I’m holding all my [American Bitcoin] shares — I’m 100% committed to leading the industry.”
American Bitcoin, which says its “ambition is to build the strongest and most efficient Bitcoin accumulation platform in the world”, went public in September through a reverse merger with Nasdaq-listed miner Gryphon Digital Mining.
Eric Trump is American Bitcoin’s co-founder and chief strategy officer. Donald Trump Jr was an early investor. Matt Prusak, American Bitcoin’s president, said the end of the share lock-up period “affects who can buy or sell, not the assets we operate or the work the team is doing every day”.
Donald Trump has loosened regulations on the crypto sector since returning as president this year and has vowed to make the US a digital currency “superpower”. He previously described the value of crypto as based on “thin air”.
The broader crypto market has tumbled in recent weeks as investors have pulled back from risky assets, with bitcoin down about 30 per cent since its latest peak in early October. Bitcoin steadied on Tuesday, however, up 6 per cent at about $91,000 per token.
American Bitcoin — which creates new bitcoin through the computational process known as mining and also maintains its own “strategic” bitcoin reserve — was originally called American Data Centers but rebranded in late March in a joint venture with Hut 8, another crypto miner.
As part of the deal, Hut 8 agreed to hand over all of its mining equipment in exchange for a majority interest in ADC. Hut 8’s shares were down 13.5 per cent on Tuesday.
American Bitcoin is among several crypto companies backed by the president’s sons, who also co-founded World Liberty Financial, which has issued billions of its own tokens and lists Donald Trump as co-founder emeritus.
The value of its WLF token has collapsed 86 per cent over the past year, according to CoinMarketCap data.
Trump Media & Technology Group, which runs the Truth Social app and is controlled by the president’s family, earlier this year said it planned to raise $1.5bn in fresh equity and another $1bn through convertible bonds to create a “bitcoin treasury”.
TMTG’s share price is down almost 70 per cent this year.
Shares in other so-called bitcoin treasury companies have tumbled in recent months amid the wider sell-off for hundreds of digital assets.
Michael Saylor’s Strategy — which pioneered the model and holds 650,000 bitcoin, equivalent to 3.1 per cent of the world’s total supply of the cryptocurrency — has fallen 40 per cent this year as investors have cooled on the company’s prolific issuance of shares, convertible debt and new preferred equity instruments to fund its bitcoin-buying spree.