As corporate names go, American Bitcoin is about as self-explanatory as it gets.
“At the end of the day, we’re an American company mining Bitcoin in America and we obviously love the asset class,” said Eric Trump, the company’s chief strategy officer, in an interview at Trump Tower in Midtown Manhattan on Tuesday.
Co-founded by Eric and Donald Trump Jr., American Bitcoin went public earlier in September following the merger with crypto mining company Gryphon Digital Mining.
Shares are up about 12% since the deal was completed. The company is majority-owned by another Bitcoin miner, Hut 8.
There are several other publicly traded options for investors looking to buy so-called Bitcoin Treasury firms—companies that hold Bitcoin on their corporate balance sheets—including MicroStrategy, GameStop, Tesla and even Trump Media & Technology Group. It’s unclear what makes American Bitcoin stand out, other than the Trump backing.
Simply put, the stock looks like it is way ahead of itself, trading on the hope and hype that is a hallmark of the crypto industry. According to regulatory filings, American Bitcoin owned 2,443 Bitcoin as of early September. At current prices, that is worth about $285 million, a fraction of American Bitcoin’s more than $7 billion market valuation.
American Bitcoin executive chairman Asher Genoot, who is also CEO of Hut 8, told Barron’s the goal is to use its mining expertise to generate Bitcoin at a big discount to its average price in the spot market and raise cheap capital to buy more, similar to MicroStrategy. That could help.
Eric Trump added that the idea is for American Bitcoin to bring a more “modern common sense voice to crypto” and make it more accessible to average investors.
That already is happening, thanks in part to spot Bitcoin exchange-traded funds from the likes of iShares owner BlackRock and Fidelity as well as brokerage firms such as Coinbase, Robinhood, and recently public Gemini. (Gemini co-founders Cameron and Tyler Winklevoss are also investors in American Bitcoin.)
“Crypto is growing faster than the internet. That is not a joke,” Eric Trump said. “It’s explosive.”
It also goes without saying that the recent rebound for Bitcoin and other cryptocurrencies might not have been possible if regulations in Washington remained as strict as they were in the prior administration. Gary Gensler, the head of the Securities and Exchange Commission under President Joe Biden, was viewed as being staunchly anti-crypto. There has been a sea change in policy under new SEC chair Paul Atkins.
Eric Trump thinks there is no going back, no matter what the future of Washington looks like.
“That movement is dead. We’ve come too far,” he said.
That may be true. The fact that so many traditional financial institutions are betting on Bitcoin and blockchain technology means being pro-crypto should no longer really be a political issue.
But numbers aren’t partisan. The company may need to buy a lot more Bitcoin in America to live up to its lofty valuation.
Write to Paul R. La Monica at paul.lamonica@barrons.com
