Take the crypto platform they co-founded, World Liberty Financial: The Trump family has seen their holdings of the affiliated token decline in paper value — but they’re still entitled to a portion of proceeds from selling the token, regardless of prices.
“Retail investors can only speculate,” said Jim Angel, a finance professor at Georgetown University. “The Trumps can not only speculate, but they can create tokens, sell them and make money off those transactions.”
“What a great buying opportunity,” Eric Trump says of the crypto crash.Credit: Bloomberg
Bitcoin traded above $US88,600 on Tuesday morning AEDT, recovering from Friday’s drop to just above $US80,500.
This is a snapshot of how the Trump family’s crypto-linked holdings are weathering the plunge.
Trump Media: $US800 million loss
Shares of Trump Media & Technology Group, the parent company of the Truth Social platform, hit a record low on Wednesday. At least part of the decline might be explained by a poorly-timed move into cryptocurrency.
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The value of the president’s stake in the firm fell by about $US800 million since September. He is the company’s largest holder, with his stake in a trust overseen by his eldest son, Donald Trump Jr.
Trump Media, which is unprofitable, has been experimenting with several new business lines, including crypto. The company spent about $US2 billion on Bitcoin and related securities, including options, according to a July statement. Its stockpile of roughly 11,500 Bitcoins, purchased when the cryptocurrency’s price was about $US115,000, means the company has accumulated a loss of about 25 per cent on the position.
It also started hoarding a lesser-known token called CRO, issued by Singapore-based crypto exchange company Crypto.com. Trump Media’s stash of the CRO token was worth about $US147 million at the end of September. Since then, CRO has lost roughly half its value.
Trump Media is pursuing other lines of business with Crypto.com. The two companies are planning a prediction market that will let users bet on sports and politics, called Truth Predict.
World Liberty Financial: Nearly $US3 billion paper loss
The Trump family’s flagship crypto project, World Liberty Financial, has its own name-brand token called WLFI. The cost of that token has plunged from 26 US cents in early September to around 15 US cents.
The Trump family owns a store of WLFI tokens that had a paper value of nearly $US6 billion at the peak. Today, they are worth about $US3.15 billion. (The coins aren’t included in the family’s valuation on the Bloomberg Billionaires Index because they are currently locked and can’t be traded.)
In August, the company sold some of its tokens to a tiny publicly traded company called Alt5 Sigma Corp. The sale came at an opportune moment: World Liberty netted $US750 million in cash and an equity stake.
Investors in Alt5 haven’t necessarily fared as well. Alt5 shares have lost about 75 per cent of their value since the deal was announced.
The Trump family’s stake in Alt5, via World Liberty, dropped by about $US220 million. But the Trumps still walked away winners from the deal. The family got about 75 per cent of the proceeds from sales of World Liberty tokens, which added up to $US500 million from the Alt5 deal alone, according to Bloomberg calculations. The Trumps made about another $US400 million from WLFI token sales before the Alt5 deal.
“Crypto is here to stay,” a spokesperson for World Liberty Financial said in a statement.
“World Liberty Financial has long-term conviction in the rapidly maturing technologies underpinning digital assets, which we believe will radically improve financial services.”
American Bitcoin: At least $US330 million loss
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About two months after Trump’s inauguration, his family dove into another new crypto project. Eric and Donald Trump Jr. collaborated with crypto company Hut 8 Corp on a complex series of transactions, where Hut 8 provided its own Bitcoin mining equipment in exchange for a majority stake in a new firm, called American Bitcoin Corp.
Eric Trump owns about 7.5 per cent of American Bitcoin, which now trades on Nasdaq under the ticker ABTC. Donald Trump Jr. owns a smaller, undisclosed stake.
Shares of ABTC peaked at $US9.31 in early September, making Eric Trump’s stake worth about $US630 million. They have since dropped by more than half, wiping more than $US300 million off the family fortune. The transaction still marks one of the clearest examples of how the Trumps generated hundreds of millions in new crypto wealth from relatively recent endeavours.
An investor who bought ABTC shares when they became public would have faced a 45 per cent loss. An ABTC spokesperson didn’t respond to requests for comment.
Trump Memecoin: Nearly $120 million moss, $US220 million of tokens unlocked
Trump’s memecoin had already plunged since it was announced on the weekend of the presidential inauguration. But since the end of August, it has shed roughly another 25 per cent of its value.
The size of the family’s stake in the coin is opaque. Gauntlet, a risk modelling firm, found that digital wallets associated with the creation of the memecoin owned nearly 17 million tokens a few months after its launch, with another 17 million transferred to crypto exchanges by those wallets. Another 90 million tokens vested in July.
The Bloomberg Billionaires Index credits the Trumps with 40 per cent of the total, based on the family’s ownership stake in World Liberty Financial.
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Those coins are worth about $US310 million at prevailing prices, a roughly $US117 million drop since the end of August.
But the Trump family has seen a huge boost to its holdings of the coin, according to calculations by the index. A portion of tokens held by insiders and creators of the coin have been “locked” and untradeable, but are vesting over three years.
Since the vesting event in July, nearly 90 million more Trump tokens were unlocked for insiders, according to crypto research firm Messari, of which about 40 per cent are credited to the Trumps by Bloomberg’s wealth index.
The additional coins are worth roughly $US220 million. That means the value of the family’s total holdings went up. It’s unclear whether the Trump family has sold coins since July.
