Bloomberg: As the Crypto Market Crashes, the Trump Family and Its Supporters See Their Wealth Plummet

Original Article Title: Crypto Crash Is Eroding Wealth for Trump's Family and Followers

Original Article Authors: Tom Maloney, Annie Massa, Bloomberg

Original Article Translation: Luffy, Foresight News

During Donald Trump's second term as president, cryptocurrency has reshaped the wealth landscape of his family. Today, the Trump family and its followers are experiencing firsthand the inherent volatility of cryptocurrency.

Since August, a memecoin named after Trump, TRUMP, has plummeted in value by about a quarter; Eric Trump (Trump's second son) has seen his stake in a Bitcoin mining company shrink by nearly half from its peak; and the Trump Media & Technology Group, which started accumulating Bitcoin this year, has seen its stock price plummet to near historic lows.

On September 16, Eric Trump speaks at the Nasdaq bell-ringing ceremony for a U.S. Bitcoin company.

The recent sell-off is part of a broader cryptocurrency market crash, with the total market value of all crypto assets plunging by over $1 trillion. According to the Bloomberg Billionaires Index, the Trump family's wealth has shrunk from around $7.7 billion in early September to approximately $6.7 billion, with the decline largely tied to the family's steadily expanding cryptocurrency-related investment portfolio.

These investments involve complex trades, far beyond just a direct bet on cryptocurrency. Retail investors now have more avenues to participate in Trump-related crypto projects, potentially leading to greater losses. For example, anyone who speculated by buying TRUMP at its peak after Trump announced the memecoin launch over his inauguration weekend in January would have lost almost their entire investment value this month.

Eric Trump has expressed confidence, stating that he remains bullish. He has repeatedly urged investors to double down, maintaining this view even during a downturn in the cryptocurrency market.

“This is a prime buying opportunity,” he said in a statement to Bloomberg News. “Those who buy the dip and embrace volatility will ultimately emerge as winners. I have never been more optimistic about the future of Bitcoin and the modernization of the financial system."

Indeed, since its inception in 2009, Bitcoin has experienced several major price drops, but has ultimately set new highs over time. However, the Trump family's crypto asset holdings have a buffer mechanism. Despite the significant decline in the value of the tokens they hold and shares of crypto-related companies, they can still profit through other avenues in the cryptocurrency industry.

Take, for example, their jointly founded crypto project World Liberty Financial: While the Trump family's holding of associated tokens has decreased in book value, regardless of price fluctuations, they still have the right to a proportional share of the token sale proceeds.

“Retail investors can only speculate,” said Jim Angel, a finance professor at Georgetown University, “while the Trump family can not only speculate but also issue tokens, sell tokens, and profit from these transactions.”

Below is an overview of the Trump family's performance in crypto-related assets during this recent downturn.

Trump Media & Technology Group: $800 Million Loss

The parent company of the Truth Social platform, Trump Media & Technology Group, saw its stock price hit an all-time low on Wednesday. Part of the reason for this recent decline may be attributed to its ill-timed cryptocurrency investments.

Since September, Trump's stake in the company has shrunk by approximately $800 million. He is the largest shareholder of the company, with shares held through a trust fund overseen by his son, Donald Trump Jr.

Trump Media & Technology Group stock has plummeted 66% over the past year

The unprofitable Trump Media & Technology Group has been trying out several new businesses, including in the cryptocurrency field. According to a July announcement, the company has invested about $2 billion in purchasing Bitcoin and options. Its holdings of approximately 11,500 Bitcoins were acquired at an average price of $115,000 per coin, and the position has currently incurred a cumulative loss of about 25%.

In addition, the company has also started accumulating the niche token CRO issued by the Singaporean cryptocurrency exchange Crypto.com. As of the end of September, Trump Media's holdings of CRO tokens were valued at approximately $147 million, which has since shrunk by nearly half.

Trump Media is also collaborating with Crypto.com on other ventures, with plans to launch a prediction market platform called Truth Predict, allowing users to bet on sports events and political outcomes.

World Liberty Financial: Nearly $3 Billion Paper Loss

The core crypto project of the Trump family, World Liberty Financial, issued its own token, WLFI. The token price has dropped from around 26 cents in early September to about 15 cents.

The WLFI tokens held by the Trump family were valued at nearly $6 billion at their peak, but have now shrunk to about $3.15 billion. (These tokens are not included in Bloomberg's billionaire index's family wealth valuation as they are currently in a locked state and cannot be traded.)

World Liberty Financial Official Website

In August this year, the company sold some tokens to the small publicly traded company Alt5 Sigma Corp. The timing of this sale was opportune: World Liberty Financial received $750 million in cash and partial equity through the transaction.

However, Alt5's investors were not necessarily as lucky. Since the announcement of the transaction, Alt5's stock price has fallen by about 75%.

The value of Alt5 stock held by the Trump family through World Liberty Financial has shrunk by about $220 million, but they still profited from the transaction. According to Bloomberg's calculations, the Trump family received about 75% of the proceeds from the World Liberty Financial token sale, with $500 million credited solely from the Alt5 transaction, in addition to about $400 million received earlier through the WLFI token sale.

"Cryptocurrency is here to stay," a World Liberty Financial spokesperson said in a statement. "We have long-term confidence in the rapidly maturing technology that underpins crypto assets and believe these technologies will revolutionize the financial services sector."

American Bitcoin: Loss of at least $330 Million

Approximately two months after Trump took office, his family ventured into another new crypto project. Eric Trump and a junior Donald Trump engaged in a series of complex transactions with the crypto company Hut 8 Corp.: Hut 8 exchanged its self-mined bitcoins for a majority stake in the newly formed company American Bitcoin Corp.

Eric Trump holds approximately 7.5% of American Bitcoin Company, which has been listed on Nasdaq (stock code ABTC). A small amount of undisclosed shares are held by Donald Trump Jr.

In early September, ABTC's stock price reached a peak of $9.31, valuing Eric's holdings at around $630 million. Subsequently, the stock price has fallen by more than half, resulting in a more than $300 million shrinkage of the family's wealth. However, this transaction remains one of the clearest examples of the Trump family's recent acquisition of hundreds of millions of dollars in new wealth through cryptocurrency-related businesses.

If an investor bought the stock when ABTC went public, they are currently facing a 45% loss. An ABTC spokesperson did not respond to a request for comment.

Trump Memecoin: Nearly $120 Million Loss, $220 Million Tokens Unlocked

This memecoin has been in a continuous freefall since its announcement over the President's Day weekend, and has further shrunk by about 25% since the end of August.

The scale of the Trump family's holdings in the token is not transparent. Risk modeling company Gauntlet found that months after the token was launched, wallets associated with the issuance held nearly 17 million tokens, with another 17 million transferred to cryptocurrency exchanges. In July of this year, an additional 90 million tokens were unlocked for circulation. According to the Bloomberg Billionaires Index, based on the Trump family's stake in World Liberty Financial, 40% of the total memecoin supply is attributed to the Trump family's wealth.

At the current price, these tokens are valued at approximately $310 million, a decrease of about $117 million since the end of August.

However, according to the index's calculations, the Trump family's token holdings have significantly increased. Part of the tokens held by insiders and the issuer were previously locked and are set to gradually unlock over three years.

According to data from cryptocurrency research firm Messari, after the unlock event in July, insiders added nearly 90 million Trump memecoins to circulation, with approximately 40% being attributed to the Trump family by the Bloomberg Billionaires Index.

The value of these newly unlocked tokens is approximately $220 million, indicating that the total value of the family's holdings has increased. It is currently unclear whether the Trump family has sold any of these tokens since July.