During President Donald Trump's second term, crypto assets have significantly increased his family's net worth. Till the month of September, there was a huge rise in the prices of Bitcoin and other cryptocurrencies of the world. Due to which there was an increase in the net worth of the Trump family and their followers. But the cryptocurrency market or rather Bitcoin has crashed by more than 30 percent from its peak. Due to which there has been a decline in the wealth of the Trump family and their followers.
The value of Trump-branded memecoins has fallen by nearly a quarter since August. Eric Trump's stake in the Bitcoin mining venture has fallen to almost half of its peak. And shares of Trump's social media company, which started hoarding Bitcoin this year, are hovering around all-time lows.
The selloff is part of a broader decline that has wiped off more than $1 trillion in value across the world of digital assets. According to the Bloomberg Billionaires Index, the wealth of the Trump family has declined from $7.7 billion at the beginning of September to $6.7 billion, which means that the net worth of the Trump family has seen a decline of one billion dollars or more. This decrease is mainly related to his growing portfolio of crypto ventures.
These holdings involve complex trades that go far beyond simply betting on the value of digital currencies. Everyday investors, who have more ways than ever to invest in Trump-related projects, stand to lose even more. For example, if a broker had bought Memecoin at its peak after Trump's announcement over Inauguration weekend, his investment would have lost almost all of its value by this month.
The President's second son Eric Trump said that he is fearless. Despite the decline in the crypto market, he has repeatedly urged investors to double their investments. In a statement given to Bloomberg News, he said what a great buying opportunity this is. Those who buy on dips and accept the volatility will be the ultimate winners. I have never been more optimistic about the future of cryptocurrencies and the modernization of the financial system.
It is true that since its inception in 2009, Bitcoin has faced huge declines several times before, and has climbed even higher over time. But the Trump couple have created a buffer in their crypto holdings. Although they own tokens and shares of crypto-related companies that are falling, they also make money in other ways from their involvement in this industry.
Take the crypto platform World Liberty Financial, of which he co-founded: the Trump family has seen the value of their holdings of related tokens decline – but regardless of the price, they are still entitled to a share of the proceeds from selling the tokens.
Jim Engel, a finance professor at Georgetown University, said retail investors can only speculate. Trump can not only speculate, but he can also create tokens, sell them, and make money from those transactions. This is a glimpse of how the Trump family's crypto-related holdings are facing this downturn.
Shares of Trump Media & Technology Group Corp., the parent company of Truth Social Platform, hit a record low on Wednesday. At least one reason for this decline could be investing in cryptocurrencies at the wrong time. The value of the President's stake in the company has declined by approximately $800 million since September. He is the company's largest shareholder, with his stake held in a trust run by his eldest son, Donald Trump Jr.
Trump Media, which is loss-making, is experimenting with many new businesses, including crypto. According to a July statement, the company spent about $2 billion on Bitcoin and related securities, including options. It has reserves of approximately 11,500 bitcoins, which were purchased when the cryptocurrency was priced at around $115,000, which means the company has made a loss of approximately 25 percent on this position.
It also started accumulating a lesser-known token called CRO, issued by Singapore-based crypto exchange company Crypto.com. Trump Media's CRO tokens were valued at approximately $147 million at the end of September. Since then the value of CRO has almost halved.
Trump Media is also working with Crypto.com in other business areas. The two companies are planning a prediction market that will allow users to bet on sports and politics, called Truth Predict.
The Trump family's flagship crypto project, World Liberty Financial, has its own name-brand token called WLFI. The price of this token has fallen from 26 cents in the beginning of September to about 15 cents. The Trump family owns a stock of WLFI tokens whose paper value at its peak was approximately $6 billion. Today, they are worth approximately $3.15 billion. (These coins are not included in the family's valuation on the Bloomberg Billionaires Index, as they are currently locked and cannot be traded.)
In August, the company sold some of its tokens to a small publicly traded company called Alt5 Sigma Corp. The sale came at an opportune time: World Liberty received $750 million in cash and an equity stake. Alt5 investors haven't necessarily fared that well. The value of Alt5's shares has fallen by approximately 75 percent since the deal was announced.
Through World Liberty, the Trump family's stake in Alt5 reduced by approximately $220 million. But the Trump family still profited from this deal. According to Bloomberg calculations, the family received about 75 percent of the proceeds from the sale of World Liberty tokens, which reached $500 million from the Alt5 deal alone. Before the Alt5 deal, the Trump family earned approximately $400 million from the sale of WLFI tokens.
A spokesperson for World Liberty Financial said in a statement that crypto is here to stay permanently. World Liberty Financial has a long-term belief in the rapidly maturing technology underpinning digital assets, which we believe will significantly improve financial services.
About two months after Trump was sworn in, his family launched another new crypto project. Eric and Donald Trump Jr. entered into a series of transactions with crypto company Hut 8 Corp., where Hut 8 provided its Bitcoin mining component in exchange for a majority stake in a new company called American Bitcoin Corp. Eric Trump owns about 7.5 percent of American Bitcoin, which now trades on Nasdaq under the ticker ABTC. Donald Trump Jr. owns a small, undisclosed stake.
In early September, ABTC shares reached a high of $9.31, making Eric Trump's stake approximately $630 million. Since then, they have fallen by more than half, wiping more than $300 million from the family's fortune. This transaction is still a clear example of how Trump acquired millions of dollars of new crypto assets through relatively recent efforts. If an investor had bought ABTC shares when it went public, he would have suffered a loss of 45 percent.
Trump's memecoin had already fallen since its announcement on the weekend of his presidential inauguration. But since the end of August, its value has fallen further by about 25 percent. The size of the family's stake in this coin is unclear. Gauntlet, a risk modeling firm, found that digital wallets associated with Memecoin's creation held approximately 17 million tokens a few months after its launch, and those wallets transferred another 17 million tokens to crypto exchanges. 9 crore more tokens were received in July. The Bloomberg Billionaires Index, based on the family's ownership stake in World Liberty Financial, gives the Trump family 40 percent of the total stake.
At current prices these tokens are worth approximately $310 million, which is approximately $117 million less than at the end of August. But according to the calculation of the index, there has been a huge increase in the holding of tokens with the Trump family. A portion of the tokens held by token insiders and creators are “locked” and untradable, but vested for three years.
According to crypto research firm Messari, since the vesting event in July, about 90 million more Trump tokens have been unlocked for insiders, about 40 percent of which are held in Trump's account according to Bloomberg's Wealth Index. The value of the additional tokens is approximately $220 million. This means that the value of the family's total holding has increased. It is not clear whether the Trump family has sold the tokens since July.
