Bloomberg: As the crypto market crashes, the Trump family's and their supporters' wealth is shrinking significantly

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

Original Authors: Tom Maloney, Annie Massa, Bloomberg

Translated by: Luffy, Foresight News

During Donald Trump's second presidential term, crypto assets changed the wealth landscape for his family. Now, the Trump family and its followers are experiencing firsthand the inherent volatility of cryptocurrencies.

Since August, the value of the Trump-named memecoin TRUMP has dropped by about a quarter; Eric Trump (the president's second son) has seen his stake in a bitcoin mining company shrink by nearly half from its peak; and Trump Media & Technology Group, which began accumulating bitcoin this year, has seen its stock price fall to near all-time lows.

On September 16, Eric Trump speaks at the Nasdaq bell-ringing ceremony for American Bitcoin Corp.

The recent sell-off is part of a broader crash in the crypto market, with the total value of crypto assets evaporating by over 1 trillion dollars. According to the Bloomberg Billionaires Index, the Trump family's wealth has shrunk from 7.7 billion dollars in early September to about 6.7 billion dollars, with the decline mainly linked directly to the family's expanding crypto-related investment portfolio.

These investments involve complex transactions, far beyond just direct bets on cryptocurrencies. Ordinary investors now have more channels to participate in Trump-related crypto projects, and may therefore face greater losses. For example, any speculator who bought TRUMP at its price peak after the memecoin was announced during Trump's inauguration weekend would have lost almost all their investment by this month.

Eric Trump says he remains confident. He has repeatedly urged investors to double down, maintaining this stance even during the crypto market downturn.

"This is a fantastic buying opportunity," he said in a statement to Bloomberg News, "Those who buy the dip and embrace volatility will ultimately be the winners. I have never been more optimistic about the future of bitcoin and the modernization of the financial system."

Indeed, since its inception in 2009, bitcoin has experienced several major crashes, but has ultimately reached new highs over time. However, the Trump family's crypto holdings have a buffer mechanism. Although the tokens and crypto-related company stocks they hold have fallen sharply, they can still profit through other avenues in the crypto industry.

Take their jointly founded crypto project, World Liberty Financial, as an example: although the book value of the tokens held by the Trump family has shrunk, regardless of price fluctuations, they are still entitled to a proportional share of the proceeds from token sales.

"Retail investors can only speculate," said Jim Angel, a finance professor at Georgetown University, "but the Trump family can not only speculate, they can issue tokens, sell tokens, and profit from these transactions."

Below is an overview of how the Trump family's crypto-related assets have performed during this crash.

Trump Media & Technology Group: 800 Million Dollar Loss

The stock price of Trump Media & Technology Group, parent company of the Truth Social platform, hit a record low on Wednesday. Part of the reason for this decline may be poorly timed crypto investments.

Since September, Trump's stake in the company has shrunk by about 800 million dollars. He is the largest shareholder, with his shares held through a trust overseen by his eldest son, Donald Trump Jr.

Trump Media & Technology Group's stock price has plunged 66% over the past year

The unprofitable Trump Media & Technology Group has been experimenting with several new businesses, including in the crypto sector. According to a July statement, the company has spent about 2 billion dollars buying bitcoin and options. Its roughly 11,500 bitcoins were purchased at about 115,000 dollars each (UTC+8), and this position is now down about 25%.

In addition, the company has started accumulating CRO, a niche token issued by Singaporean crypto exchange Crypto.com. As of the end of September, Trump Media held CRO tokens worth about 147 million dollars (UTC+8), which have since lost nearly half their value.

Trump Media has also partnered with Crypto.com on other ventures, with plans to launch a prediction market platform called Truth Predict, allowing users to bet on sports and political events.

World Liberty Financial: Nearly 3 Billion Dollar Book Loss

The Trump family's core crypto project, World Liberty Financial, has issued its own token, WLFI. The token's price has dropped from 26 cents in early September to about 15 cents (UTC+8).

The book value of the WLFI tokens held by the Trump family peaked at nearly 6 billion dollars and has now shrunk to about 3.15 billion dollars. (These tokens are not included in the Bloomberg Billionaires Index's estimate of the family's wealth, as they are currently locked and cannot be traded.)

World Liberty Financial official website

In August this year, the company sold some tokens to a small listed company, Alt5 Sigma Corp. The timing was perfect: World Liberty Financial received 750 million dollars in cash and some equity through the deal (UTC+8).

But Alt5's investors may not have been so lucky. Since the deal was announced, Alt5's stock price has dropped about 75% (UTC+8).

The value of the Alt5 equity held by the Trump family through World Liberty Financial has shrunk by about 220 million dollars, but they still profited from the deal. According to Bloomberg's calculations, the Trump family received about 75% of the proceeds from World Liberty Financial's token sales, earning 500 million dollars from the Alt5 deal alone, and about 400 million dollars from previous WLFI token sales.

"Cryptocurrencies are here to stay," a World Liberty Financial spokesperson said in a statement, "We have long-term confidence in the rapidly maturing technology underpinning crypto assets and believe these technologies will revolutionize financial services."

American Bitcoin: At Least 330 Million Dollar Loss

About two months after Trump's inauguration, his family got involved in another new crypto project. Eric Trump and Donald Trump Jr. engaged in a series of complex transactions with crypto company Hut 8 Corp.: Hut 8 exchanged its own bitcoin mining machines for a majority stake in the newly established American Bitcoin Corp.

Eric Trump holds about 7.5% of American Bitcoin, which is now listed on Nasdaq (stock code ABTC), and Donald Trump Jr. holds a small undisclosed stake.

ABTC's stock price peaked at 9.31 dollars in early September (UTC+8), when Eric's stake was worth about 630 million dollars. Since then, the stock price has dropped by more than half, causing the family's wealth to shrink by over 300 million dollars. However, this deal remains one of the clearest examples of the Trump family earning hundreds of millions of new wealth through recent crypto-related business.

If investors bought ABTC shares at listing, they are now down 45% (UTC+8). ABTC's spokesperson did not respond to requests for comment.

Trump Memecoin: Nearly 120 Million Dollar Loss, 220 Million Dollars in Tokens Unlocked

This memecoin has been in continuous decline since it was announced during the presidential inauguration weekend, and has fallen a further 25% since the end of August (UTC+8).

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

At current prices, these tokens are worth about 310 million dollars, down about 117 million dollars since the end of August (UTC+8).

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

According to data from crypto research firm Messari, after the July unlock event, insiders unlocked nearly 90 million more Trump memecoins, with about 40% counted as belonging to the Trump family by the Bloomberg Wealth Index.

These newly unlocked tokens are worth about 220 million dollars (UTC+8), meaning the total value of the family's holdings has increased. It is not yet clear whether the Trump family has sold any of these tokens since July.