Trump Media’s Crypto Dhamaka: Stock fell 9% after the announcement of creating a Bitcoin reserve, investors will give more than ₹ 20,000 crore
Donald Trump’s media company Trump Media & Technology Group (TMTG) made an announcement that created a stir in the market. The company has said that it will raise $2.5 billion (about ₹ 20,800 crore) and this money will be used to create a “bitcoin treasury”. Immediately after this announcement, Trump Media’s stock fell 9%.
What is Trump Media’s plan?
Trump Media, which operates platforms such as Truth Social, said that about 50 institutional investors will jointly invest $1.5 billion in common shares and the remaining $1 billion will be raised through convertible senior notes. The company says that this investment will protect them from “financial harassment and discrimination” – a problem that many American firms face, according to their CEO Devin Nunes.
Nunes said, “This investment will help shield us against financial institutions that often make biased decisions.”
Trump had previously called Bitcoin “floating in the air”
This announcement is also surprising because Donald Trump has previously criticized cryptocurrencies a lot. During his first presidential term, he described bitcoin as “not real money” and linked its value to “thin air”. But his stance has changed significantly during his 2024 presidential campaign, when he promised funding from crypto donors.
At a crypto fundraiser party held at the Mar-a-Lago club, Trump openly supported the crypto industry and said he would work for the expansion of the sector. Not only that, last week he invited the top 220 investors of his meme coin “$TRUMP” to a high-profile dinner – at a luxury golf club. This move also faced criticism that he is using his political position for personal gain.
Trump’s Crypto Empire
The Trump family has made rapid strides in the crypto world. Now it is not just limited to media and real estate. His new ventures include:
Trump NFTs
$TRUMP meme coin
American Bitcoin – a new bitcoin mining company
World Liberty Financial – a decentralized platform that offers USD-pegged stablecoin
Along with this, Trump Media has also announced some more ambitious plans. The company is going to diversify in the financial services sector. He is now planning to launch crypto-based ETFs and retail investment products – all aligned with “Trump’s policies.”
A model like MicroStrategy?
The strategy bears a resemblance to MicroStrategy Inc. to some extent. MicroStrategy has also built up a billion-dollar bitcoin reserve through its stocks and bonds. But MicroStrategy is a pure-play software firm, while Trump Media is now trying to become a media-cum-crypto hybrid.
Lawmakers’ concerns
While Trump Media is engaged in aggressive crypto expansion, lawmakers are keeping an eye on it on the other side. Democratic Senator Elizabeth Warren has asked the Securities and Exchange Commission (SEC) how it will regulate Trump Media’s ETFs and crypto investments.
She says that when a former president is using his name and political reach to collect money from people, transparency and accountability also become necessary.
Will this move give Trump a political and financial advantage?
Trump’s crypto steps could excite his core base, especially young investors interested in crypto. But legal and ethical questions are also being raised – should a former (and potentially future) president be involved in such ventures?
For now, Trump Media’s bitcoin reserve plan is a bold and high-risk move. The stock market has initially reacted negatively, but crypto backers consider this development positive in the long-term.
Now it remains to be seen whether this strategy proves to be a digital goldmine for Trump or becomes a political liability.