Forbes: Encryption President Trump - One of America's Largest BTC Investors

Author: Dan Alexander, Source: Forbes, Translated by: Shaw Jinse Finance

Looking at Donald 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 Trump to the government. It is also absent from the list of assets on the Trump Organization's website. Bitcoin is also missing from other asset reports. But there is no doubt that Trump holds a significant amount of Bitcoin, estimated to be worth $870 million, which would make him one of the largest Bitcoin investors in the world.

The reason for Trump's secretive investments is that he indirectly holds these investments by owning shares in the Trump Media & Technology Group, which operates "Truth Social" (the group does indeed appear on his balance sheet). Although the Trump Media Group generates less than $4 million in revenue annually, it was valued at several billion dollars when it went public on Nasdaq, and earlier this year it ventured into the cryptocurrency space. In May, the company raised $2.3 billion through significant debt and selling its overvalued stock, and subsequently purchased $2 billion worth of Bitcoin in July. The stock sale diluted Trump's stake in the company from 52% to 41%. Since the Trump Media Group made a major bet, the price of Bitcoin has increased by about 6%. This means that Trump owns an estimated 41% of a Bitcoin reserve valued at $2.1 billion, enough to bring his personal stake to approximately $870 million.

It seems that only a handful of billionaires own more Bitcoin than Trump. If the Winklevoss brothers did not sell any assets in recent years, their net worth could exceed $8 billion. Michael Saylor, who pioneered the Bitcoin reserve strategy, owns about $5 billion in assets through his 7% stake in Strategy, along with approximately $2.2 billion in private equity. Tim Draper won Bitcoin confiscated by the U.S. government during its crackdown on the illegal Silk Road market at an auction in 2014, and these Bitcoins are now worth $3.6 billion. Investor Matthew Roszak may hold over $1 billion in assets. Following closely behind is Trump, who showed almost no interest in Bitcoin during his first 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 trade and other illegal activities."

Trump's transition from a cryptocurrency skeptic to a Bitcoin bull reflects his business strategy. As an opportunistic marketer, he began to engage in cryptocurrency in the years following his departure from the White House. Initially, Trump sold NFT trading cards, which included cards depicting him as a superhero, easily earning millions of dollars. With the 2024 election approaching, he and his three sons launched a cryptocurrency project called World Liberty Financial. The project saw little progress before Trump won the election. At that time, the cryptocurrency community, highly sensitive to government regulation, rushed to purchase World Liberty tokens, which Forbes estimates ultimately increased Trump's net worth by over $1 billion. Before the inauguration in Washington, the president-elect also launched a meme coin, TRUMP, further adding nearly $1 billion to his wealth.

Trump's re-election as president has boosted the asset values across the industry. From the election date in November last year to May this year, the price of Bitcoin surged by 60%. The Trump Media Group announced plans to start accumulating Bitcoin. The company relies on the skyrocketing price of Bitcoin to raise funds, having sold $1 billion in convertible bonds and $1.4 billion in stock. The portion of bonds that Trump has taken on amounts to about $400 million, currently the largest loan in his investment portfolio, exceeding any of his real estate mortgages.

The White House is indifferent to the moral concerns raised by all of this. Press Secretary Karoline Leavitt stated, "President Trump and his family have never been involved in and will not be involved in any conflicts of interest." However, she immediately contradicted herself by pointing out some obvious conflicts of interest. "Through executive orders, supporting legislation such as the GENIUS Act, and other common-sense policies, this administration is fulfilling the president's commitment to make America the cryptocurrency capital."

Investors who purchased stocks and bonds that fund Bitcoin reserves for the Trump Media Group clearly hope for a surge similar to that of "Meme stocks," which does not seem impossible. After all, the stock price of the Trump Media Group 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 their stock prices could soar again? Additionally, the structure of these bonds provides investors with some security; if the stock price does not rise, investors can still receive a 4% return after a year and a half.

But the frenzy often gradually fades away in the end. Although the balance sheet of Trump Media Group is more robust today, with billions of dollars in Bitcoin and $1 billion in debt, its market value has shrunk by $1.2 billion compared to before the company shifted towards Bitcoin. Setting aside the impact of Bitcoin, investors now believe that the original media business of Trump Media Group is worth only 60% of what they expected in May.

This is not to say that the Trump Media Group is destined to fail, especially with three years left in Trump's second presidential term. If the price of Bitcoin continues to rise, perhaps with the help of allies in the White House, President Trump's most loyal followers may begin bidding again, which could add hundreds of millions or even billions to Trump's wealth.