American Bitcoin Stock Plummets in Setback for Miner Backed by Trump Family — Barrons.com
By Nate WolfShares of American Bitcoin, the Bitcoin miner co-founded by Eric and Donald Trump Jr., plummeted Tuesday, bringing the company's valuation back down to earth.American Bitcoin stock was down 43% to $2.05 a share on unusually high trading volume. Less than two hours after the opening bell, 48 million shares had changed hands — 10 times the stock's daily average.American Bitcoin went public in September with a simple plan: It would mine and hold Bitcoin. Since the company could mine the tokens on its own, it could accumulate Bitcoin at a significant discount to the average price in the spot market, Executive Chairman Asher Genoot told Barron's.Other so-called Bitcoin treasury companies, most notably Strategy, have managed to trade at a premium to the value of their cryptocurrency holdings. But those premiums eroded in recent weeks as Bitcoin prices fell. American Bitcoin, which has a similar model, was no exception.As of mid-September, the company had a market capitalization of more than $7 billion, compared with $285 million worth of crypto on its balance sheet. According to the latest regulatory filings, the company held 3,418 Bitcoin in reserve as of the end of September, which would now be worth around $310 million. But its market capitalization has now dropped to $1.85 billion, according to Dow Jones Market Data.It wasn't immediately clear what spurred the selloff.The collapse came on an otherwise solid day for crypto. Bitcoin, Ethereum, Ripple, and other coins all advanced on Tuesday, though some market analysts argued that Bitcoin's skid is set to continue. As of late on Monday, the price had fallen 32% from the record high of $126,272.76 reached on Oct. 6."I don't believe the bottom is in," Nick Forster, founder of the crypto options platform Derive.xyz, wrote in a Tuesday note. "The market expects outsized swings as we head into the new year."Write to Nate Wolf at [email protected] content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.