During President Donald Trump's second term, cryptocurrency assets became a game-changer for his family's fortune. Now, the family, as well as their supporters, are receiving a quick lesson in the wild volatility inherent in digital currencies.
The value of the cryptocurrency associated with Trump's name has fallen by about a quarter since August. Eric Trump's stake in a Bitcoin mining project has also lost nearly half its value from its peak. Shares of Trump's social media company, which began accumulating Bitcoin this year, are near their all-time low.
This sell-off is part of a broader downturn that has wiped more than $1 trillion off the value of the digital asset world. The Trump family's net worth has fallen to around $6.7 billion, down from $7.7 billion in early September, according to the Bloomberg Billionaires Index—a decline largely attributed to their growing portfolio of cryptocurrency projects.
These holdings involve complex transactions that go beyond simply betting on the value of cryptocurrencies. Ordinary investors, who now have more ways than ever to invest in Trump-related projects, are poised to suffer even greater losses. For example, any speculator who bought Trump Coin at its peak after its announcement during the Inauguration holiday would have lost almost the entire value of their investment by this month.
Eric Trump, the president's second son, said he was not hesitant. He has repeatedly urged investors to buy on dips, even during periods of cryptocurrency market downturn.
He added in a statement to Bloomberg: “What a great buying opportunity. People who buy on the dip and embrace volatility will be the winners in the end. I have never been more optimistic about the future of cryptocurrencies and the modernization of the financial system.”
Trump family has a safety margin
Since its inception in 2009, Bitcoin has experienced several sharp declines before steadily rising over time. However, the Trump family has a built-in safety net in their cryptocurrency holdings. While they own cryptocurrency-related tokens and companies whose value is declining, they are profiting from their involvement in the sector through other means.
For example, the book value of tokens linked to the cryptocurrency platform they co-founded, World Liberty Financial, has declined, but the family is still entitled to a share of the proceeds from the sale of those tokens, regardless of the prices.
Jim Angel, a professor at Georgetown University's School of Business, said: Individual investors can only speculate. The Trumps can not only speculate, but also create currencies, sell them, and make money from those transactions.
Here's a glimpse into how the Trump family's cryptocurrency holdings have weathered this major downturn:
Trump Media loses $800 million
Shares of Trump Media & Technology, the parent company of TruthSocial, hit a record low on Wednesday. Part of the decline may be attributed to the company's ill-timed entry into the cryptocurrency market.
The value of the US president's stake in the company has fallen by about $800 million since September. He is its largest shareholder, with his stake managed through a trust overseen by his eldest son, Donald Trump Jr.
The company, which is not profitable, has begun experimenting with several new business lines, including cryptocurrencies. According to a statement released in July, the company spent approximately $2 billion on Bitcoin and related securities, including options. Its holdings of roughly 11,500 Bitcoins, purchased at a price of approximately $115,000 per unit, mean the company incurred a loss of about 25% on this transaction.
The company also began accumulating a less well-known digital token called CRO, issued by Crypto.com, a Singapore-based cryptocurrency exchange. This token was valued at approximately $147 million at the end of September, but CRO has since lost about half its value.
The company is pursuing other lines of business with Crypto.com, including launching a prediction marketplace called TruthPredict that will allow users to bet on sports and politics.
World Liberty Financial: Book loss close to $3 billion
The Trump family's main cryptocurrency venture is World Liberty Financial, with its token WLFI. The token's price has dropped from 26 cents in early September to around 15 cents.
The family's holdings of WLFI were worth about $6 billion at their peak. Today, they are valued at about $3.15 billion. (These coins are not included in the family's valuation in the Bloomberg index because they are frozen and cannot currently be traded.)
In August, the company sold a portion of its tokens to a small listed company called Alt5 Sigma, and the sale came at an opportune time: World Liberty received $750 million in cash and an equity stake.
But investors in Alt5 did not achieve the same results, as the stock lost about 75% of its value since the deal was announced.
The Trump family's stake in Alt5 through World Liberty decreased by approximately $220 million. However, the family remained a net profit, receiving roughly 75% of the proceeds from the sale of the WLFI token, which alone generated about $500 million from the Alt5 deal, in addition to approximately $400 million from previous token sales.
A World Liberty spokesperson said that cryptocurrencies are here to stay. The company has a long-term belief in rapidly maturing technologies that it believes will fundamentally improve financial services.
Losses of at least $330 million in American Bitcoin
About two months after Trump's inauguration, his family embarked on a new venture in the world of cryptocurrencies. Eric Trump and Donald Trump Jr. partnered with Hut 8 Corp. through a series of transactions, in which Hut 8 provided Bitcoin mining equipment in exchange for a majority stake in a new company called American Bitcoin.
Eric Trump owns approximately 7.5% of American Bitcoin, which currently trades on the Nasdaq under the symbol ABTC. Donald Trump Jr.'s stake is smaller and has not been disclosed.
The company's stock peaked at $9.31 in early September, making Eric Trump's stake worth approximately $630 million. Since then, the stock has lost more than half its value, wiping out over $300 million from the family's fortune. Nevertheless, the project remains a prime example of how the Trumps have generated hundreds of millions of dollars from relatively recent ventures.
Any investor who bought the stock when it was listed would have faced a 45% loss. A spokesperson for American Bitcoin did not respond to requests for comment.
Trump's digital currency: Loss of nearly $120 million
Trump's digital currency had already crashed since its announcement during the Inauguration holiday. But since the end of August, it has lost about an additional 25% of its value.
The family's stake in the cryptocurrency is unclear. Gauntlet, a risk modeling firm, found that wallets linked to the cryptocurrency's creation held approximately 17 million tokens months after its launch, with another 17 million tokens transferred to trading platforms via the issuers' own wallets. An additional 90 million tokens became tradable in July.
The Bloomberg Billionaires Index attributes 40% of all cryptocurrency holdings to the Trump family, based on their ownership stake in World Liberty.
These tokens are currently worth about $310 million, down nearly $117 million since the end of August.
But the family saw a significant increase in its total holdings of the currency, according to Bloomberg Index calculations, as part of the tokens held by insiders and founders were frozen, and these coins will be made available for trading gradually over three years.
Since the coin availability event in July, approximately 90 million additional tokens have become tradable, according to cryptocurrency research firm Messari, and Bloomberg attributes about 40% of them to the Trump family.
These additional tokens are worth approximately $220 million, increasing the family's overall holdings despite the currency's price decline. It remains unclear whether the family has sold any of these tokens since July.
