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

Original Authors: Tom Maloney, Annie Massa, Bloomberg

Original Translator: Luffy, Foresight News

During Donald Trump's second presidential term, cryptocurrency has reshaped the wealth landscape for 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 lost about a quarter of its value; Eric Trump (President Trump's second son) has seen his stake in a Bitcoin mining company shrink by almost half from its peak; and Trump Media & Technology Group, which started accumulating Bitcoin earlier this year, has seen its stock price plummet to near record lows.

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

The recent sell-off is part of a broader cryptocurrency market crash, with the entire crypto asset market cap evaporating 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 about $6.7 billion, with the decline primarily tied to the family's expanding crypto-related investment portfolio.

These investments involve complex transactions, far beyond direct bets on cryptocurrency. Retail investors now have more channels to participate in Trump-related crypto projects, potentially facing even greater losses. For example, anyone who speculated on TRUMP by buying at the peak after Trump announced the memecoin's launch over his inauguration weekend will have lost almost their entire investment value by this month.

Eric Trump has expressed unwavering confidence. He has repeatedly urged investors to double down, maintaining this stance 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 bullish on Bitcoin's future and the modernization of the financial system.”

Indeed, since its inception in 2009, Bitcoin has experienced several significant price plunges, but has ultimately set new highs over time. However, the Trump family's cryptocurrency holdings have a cushioning mechanism. Despite sharp declines in the value of the tokens they hold and crypto-related company stocks, they can still profit through other means of involvement in the cryptocurrency industry.

Take, for example, their jointly founded crypto project, World Liberty Financial. Although the Trump family's holdings of associated tokens have seen a decrease 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 engage in speculation,” 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 cryptocurrency-related assets performance in this recent plunge.

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 decline may be attributed to its ill-timed cryptocurrency investments.

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

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

The unprofitable Trump Media & Technology Group has been striving to launch multiple new ventures, including in the cryptocurrency space. As per a July announcement, the company had invested around $2 billion in purchasing Bitcoin and options. It holds approximately 11,500 bitcoins purchased at around $115,000 per coin, with the current position showing a cumulative loss of about 25%.

Additionally, the company has started accumulating the niche token CRO issued by the Singaporean cryptocurrency exchange Crypto.com. As of the end of September, the value of CRO tokens held by Trump Media was around $147 million, which has since halved in value.

Trump Media is also collaborating with Crypto.com on other initiatives, with plans to launch a prediction market platform called Truth Predict, allowing users to wager 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, launched its own token WLFI. The token's price has dropped from 26 cents in early September to around 15 cents.

The Trump family's holdings of WLFI tokens, which were valued at nearly $6 billion at their peak, have now shrunk to about $3.15 billion. (These tokens are not included in Bloomberg's billionaire index family wealth estimate as they are currently locked and not tradable.)

World Liberty Financial Official Website

In August of this year, the company sold some tokens to the small public company Alt5 Sigma Corp. The timing of this sale was perfect: World Liberty Financial received $750 million in cash and a stake in return through the transaction.

However, Alt5's investors may not be as fortunate. Since the announcement of the transaction, Alt5's stock price has dropped by about 75%.

The value of Alt5 shares held by the Trump family through World Liberty Financial has shrunk by about $220 million, but they still profited from this 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 booked solely through the Alt5 transaction, in addition to approximately $400 million previously obtained through the WLFI token sale.

“Cryptocurrency is here to stay,” a World Liberty Financial spokesperson said in a statement, “and we have long-term confidence in the rapidly maturing technology underpinning crypto assets, believing these technologies will completely revolutionize the financial services sector.”

American Bitcoin: Loss of at Least $330 Million

About two months after Trump took office, his family ventured into another new crypto project. Eric Trump and Donald Trump Jr. engaged in a series of complex transactions with the crypto company Hut 8 Corp.: Hut 8 exchanged its own Bitcoin mining machines for a majority stake in the newly formed company American Bitcoin Corp.

Erick Trump holds approximately 7.5% of American Bitcoin Company, which is listed on Nasdaq (stock symbol ABTC). A small undisclosed amount of shares is held by Donald Trump Jr.

In early September, ABTC reached a peak of $9.31 per share, valuing Erick's stake at around $630 million. Since then, the stock price has more than halved, leading to a drop of over $300 million in family wealth. Nevertheless, this transaction remains one of the clearest examples of the Trump family's recent crypto-related business endeavors yielding hundreds of millions in new wealth.

Investors who bought the stock at ABTC's listing are now facing a 45% loss. ABTC's spokesperson did not respond to requests for comment.

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

This memecoin has been experiencing continuous freefall since its launch on the weekend of the presidential inauguration, further shrinking by about 25% since the end of August.

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

At current prices, these tokens are valued at around $310 million, down approximately $117 million since the end of August.

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

According to data from crypto research firm Messari, following the July unlock event, approximately 90 million additional Trump memecoins were unlocked by insiders, with Bloomberg's wealth index attributing around 40% to the Trump family.

These newly unlocked tokens are valued at around $220 million, implying an overall increase in the family's holdings. It is currently unclear whether the Trump family has sold any of these tokens since July.

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