Will Trump leverage his presidential term to push Bitcoin prices to new heights?

Author: Dan Alexander

Translation: Deep Tide TechFlow

The president's cryptocurrency portfolio includes not only World Liberty Financial and his memecoin but also significant investments in Bitcoin. Will Trump leverage his presidential term to push Bitcoin prices to new heights?

The greatest salesman in American history delivers a keynote speech at the Bitcoin 2024 conference in Nashville.

Image source: Jon Cherry/Getty Images

From Trump's financial situation, it is easy to overlook one of his most important assets: Bitcoin. This cryptocurrency does not appear in the financial disclosure documents submitted by the president to the government, nor is it listed among the assets on the Trump Organization's website, and it is even absent from other asset reports. However, there is no doubt that Trump holds a substantial amount of Bitcoin, with his investment estimated at $870 million, making him one of the largest Bitcoin investors in the world.

The secrecy surrounding Trump's Bitcoin investment is due to the fact that he holds these assets indirectly—through his stake in the Trump Media and Technology Group (TMTG). This company operates the social platform Truth Social, which does appear in his financial statements. Although TMTG's annual revenue is less than $4 million, its valuation has reached billions in Nasdaq trading. Earlier this year, the company ventured into the crypto space, raising $2.3 billion through debt financing and stock sales in May. Subsequently, in July, the company purchased $2 billion worth of Bitcoin. This stock sale reduced Trump's ownership stake in the company from 52% to 41%. Since TMTG's large-scale investment in Bitcoin, the price of Bitcoin has risen by about 6%. Currently, Trump holds approximately 41% of the company, equivalent to about $2.1 billion in Bitcoin reserves, with Trump's personal share estimated at $870 million.

Only a few billionaires globally own more Bitcoin. For example, the Winklevoss twins may own over $8 billion in Bitcoin (assuming they haven't sold any in recent years). Michael Saylor, a pioneer in Bitcoin asset strategy, is currently being emulated by TMTG. Saylor's company holds about $5 billion in Bitcoin through a 7% stake, along with approximately $2.2 billion in personal Bitcoin assets. Investor Tim Draper acquired Bitcoin worth about $3.6 billion in 2014 through an auction of Bitcoin seized by the U.S. government during its crackdown on the dark web marketplace Silk Road. Additionally, investor Matthew Roszak may hold over $1 billion in Bitcoin. Following closely behind is Trump, who had almost no association with Bitcoin during his first presidential term.

In 2019, Trump tweeted, "I am not a fan of Bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated crypto assets can facilitate illegal behavior, including drug trafficking and other illegal activities."

However, Trump's transformation from a cryptocurrency skeptic to a Bitcoin supporter reflects his business attitude and strategy—opportunism and marketing thinking. During his time away from the White House, he began to engage in the crypto space. First, Trump earned millions in easy income by selling NFT trading cards designed with his superhero image. Then, as the 2024 election approached, he launched a crypto project called World Liberty Financial with his three sons. Although the project made little progress initially, after Trump won the election, the crypto community—a group highly sensitive to government regulation—flocked to the tokens of World Liberty Financial, which Forbes estimates increased Trump's net worth by over $1 billion. Meanwhile, amid heated discussions in Washington, the presidential candidate also launched a memecoin, further increasing his wealth by nearly $1 billion.

After the start of Trump's second presidential term, the overall value of assets in the crypto industry has risen. From the election day last November to May this year, the price of Bitcoin increased by 60%. TMTG announced plans to start accumulating Bitcoin and raised funds by leveraging its high stock price, issuing $1 billion in convertible bonds and $1.4 billion in stock. Currently, Trump's debt amounts to about $400 million, making it the largest loan in his portfolio, even surpassing any real estate mortgages.

While all of this may raise ethical concerns, the White House seems unconcerned. Press Secretary Karoline Leavitt stated, "The president and his family have never been involved in, and will never be involved in, conflicts of interest." However, she immediately cited an apparent conflict of interest to undermine her own statement. "Through executive action, supporting legislation like the GENIUS Act, and other common-sense policies, the government is delivering on the president's promise to make the U.S. a global hub for cryptocurrency."

Investors who bought TMTG stock and bonds to support its Bitcoin investments clearly hope for a memestock frenzy, which seems possible. After all, TMTG's stock price soared solely based on a loss-making social media app, so if it is linked to one of the hottest assets in the world, perhaps the stock price will soar again? These bonds add a layer of security, as their structure allows investors to earn a 4% return after a year and a half, even if the stock price does not soar.

However, market enthusiasm typically wanes over time. Although TMTG's balance sheet is now stronger—comprising billions of dollars in Bitcoin and $1 billion in debt—its market value has decreased by $1.2 billion since shifting towards Bitcoin. Excluding Bitcoin investments, investors currently value the company's original media business at only 60% of its assessment from May this year.

This does not mean TMTG is doomed to fail, especially with three years left in Trump's second presidential term. If Bitcoin prices continue to rise, coupled with support from allies in the White House, Trump's most loyal supporters may once again drive up stock prices, potentially adding hundreds of millions or even billions to Trump's wealth.

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