Trump Media stock surges after acquiring $2 billion of bitcoin
The stock of President Trump’s namesake media group opened 6% higher Monday morning after it announced it had purchased $2 billion in bitcoin (BTC-USD) and related securities.
Trump Media (DJT) — which runs the president’s social media platform Truth Social along with streaming platform Truth+ and financial services brand Truth.Fi — said it acquired the cryptocurrencies as part of a previously shared plan in May to become a bitcoin treasury company.
With those purchases, Trump Media said exposure to the world's largest cryptocurrency now comprises two-thirds of its total of $3 billion in assets.
"We're rigorously implementing our publicly announced strategy and fulfilling our bitcoin treasury plan,” Trump Media's CEO and President Devin Nunes said in the press release.
"These assets help ensure our company's financial freedom, help protect us against discrimination by financial institutions, and will create synergies with the utility token we're planning to introduce across the Truth Social ecosphere."
The company also said it allocated another $300 million to an “options acquisition strategy for bitcoin related securities."
Trump is deepening his financial involvement in the crypto world as Washington, D.C. moves new legislation that offers the industry more favorable oversight.
Trump on Friday signed into law a bill that establishes the first federal framework for dollar-backed stablecoins, giving those digital assets backed by US dollars a massive stamp of approval that is expected to encourage wider adoption
World Liberty Financial, a new crypto startup backed by Trump and his sons, has already launched its own US-dollar-pegged stablecoin (USD1) in partnership with BitGo.
Trump Media announced its plans in May to raise $2.5 billion to create a bitcoin treasury, a strategy that has recently caught fire amongst crypto entrepreneurs. It involves using a mix of public equity and debt issuance to more rapidly acquire bitcoin.
The technique was pioneered by Michal Saylor's Strategy (MSTR), formerly MicroStrategy. Starting in 2020, Saylor turned his business intelligence software firm into a bitcoin juggernaut by adding as much of the world’s largest cryptocurrency to his company’s balance sheet as possible.
Dozens of other companies have followed suit, including some with backing from family members of white house advisors. Others are seeking to stockpile crypto assets outside of bitcoin such as ether, the second largest cryptocurrency.
So far many of these efforts have proven to lead to wild stock jumps, but short sellers have plenty of skepticism over how long such a dynamic can last.
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