Trump Eyes Big Upside After Massive Bitcoin Buy
Trump Media (NASDAQ:DJT) popped 5.1 % after revealing a $2 billion Bitcoin (BTC-USD) purchase as part of its plan to become a Bitcoin treasury company.
The move, first outlined in May, has positioned Bitcoin at 2/3 of the firm's $3 billion total assets and prompted management to earmark an additional $300 million for options on digital assets in the coming months.
In early trading DJT shares jumped despite the stock's 25% decline since the plan's announcement and a 45% drop year to date.
That dive has underscored investor nerves around tying the social media group's fate to volatile crypto prices. The strategy echoes MicroStrategy's pivot under Michael Saylor, where the enterprise software firm shifted over $9 billion into Bitcoin, sparking steep rallies and sharp pullbacks.
CEO Devin Nunes said moving crypto onto the balance sheet helps protect the company from potential banking discrimination and lays the groundwork for a utility token he plans to roll out across Truth Social, Truth+ and Truth.Fi.
He added that the recent signing of the GENIUS Act, which sets the first federal framework for stablecoins, should boost confidence in digital currencies and accelerate adoption.
That means investors will be betting more on Bitcoin price swings than advertising revenue or subscriber growth. Investors will want to track Bitcoin performance and DJT's second?quarter update expected in August to see how this high stakes play unfolds.
This article first appeared on GuruFocus.
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