Originally Posted by Dan Alexander

Original translation: TechFlow

The president's cryptocurrency portfolio includes not only World Liberty Financial and his memecoin, but he's also heavily invested in Bitcoin. Will Trump use his presidency to push Bitcoin's price to new heights?

The greatest salesman in American history delivered the keynote address at the Bitcoin 2024 conference in Nashville.

Photo credit: Jon Cherry/Getty Images

Looking at Trump's finances, it's easy to overlook one of his most significant assets: Bitcoin. The cryptocurrency doesn't appear in the president's government financial disclosures, isn't listed on the Trump Organization's website, and isn't even mentioned in other asset reports. Yet, there's no doubt that Trump holds a significant amount of Bitcoin, with an estimated investment of $870 million, making him one of the world's largest Bitcoin investors.

Trump's Bitcoin investment remains so secretive because he holds it indirectly—through his stake in Trump Media and Technology Group (TMTG). The company operates the social platform Truth Social, an asset that does appear on his financial statements. Despite generating less than $4 million in annual revenue, TMTG is valued in the billions of dollars on the Nasdaq. Earlier this year, the company pivoted to crypto, raising $2.3 billion in May through debt and stock sales. Then, in July, it purchased $2 billion worth of Bitcoin. This stock sale reduced Trump's stake in the company from 52% to 41%. Since TMTG's large investment in Bitcoin, its price has risen by approximately 6%. Trump currently holds approximately 41% of the company, representing a Bitcoin reserve of approximately $2.1 billion, of which his personal stake is estimated at $870 million.

Only a handful of billionaires worldwide own more Bitcoin. For example, the Winklevoss twins likely own over $8 billion in Bitcoin (assuming they haven't sold in recent years). Michael Saylor is a pioneer in Bitcoin asset strategies, a strategy currently being emulated by TMTG. Saylor's 7% stake in his firm, Strategy, holds approximately $5 billion in Bitcoin, and he also holds approximately $2.2 billion in personal Bitcoin assets. Investor Tim Draper acquired Bitcoins confiscated by the US government during a crackdown on the darknet marketplace Silk Road at an auction in 2014; these Bitcoins are currently valued at approximately $3.6 billion. Furthermore, investor Matthew Roszak likely holds over $1 billion in Bitcoin. A close second is Trump, who had virtually no involvement with Bitcoin during his first term as president.

In 2019, Trump tweeted: "I am not a fan of Bitcoin and other Cryptocurrencies. They are not money, their value is highly volatile and based on nothing. Unregulated Crypto Assets can facilitate illegal activity, including drug trafficking and other illegal activity."

However, Trump's transformation from a cryptocurrency skeptic to a Bitcoin supporter reflects his business attitude and business strategy - opportunism and marketing thinking. During his time away from the White House, he began to dabble in the crypto field. First, Trump made millions of dollars in easy income by selling NFT trading cards designed with himself as a superhero. Then, with the 2024 election approaching, he and his three sons launched a crypto project named World Liberty Financial. Although the project made little progress in the early stages, after Trump won the election, the crypto community - a group highly sensitive to government regulation - flocked to World Liberty Financial's tokens, increasing Trump's net worth by more than $1 billion according to Forbes estimates. At the same time, amid the heated discussions in Washington, D.C., the president-elect also launched a memecoin, further increasing his wealth by nearly $1 billion.

Since the start of Trump's second term as president, asset values have generally risen across the crypto industry. From Election Day last November to May of this year, the price of Bitcoin rose 60%. TMTG announced plans to begin hoarding Bitcoin and capitalize on its high stock price, issuing $1 billion in convertible bonds and $1.4 billion in stock. Trump's debt currently stands at approximately $400 million, making it the largest loan in his portfolio, surpassing even any real estate mortgages.

Despite the potential ethical controversy surrounding this, the White House is shrugging it off. Press Secretary Karoline Leavitt stated, "The President and his family have never been, and never will be, involved in a conflict of interest." However, she then undercut her statement by citing the apparent conflict of interest. "Through executive actions, support for legislation like the GENIUS Act, and other common-sense policies, the Administration is delivering on the President's commitment to make the United States a global hub for cryptocurrency."

Investors who bought TMTG stock and bonds to back their Bitcoin investments were clearly hoping for a memestock boom, which seemed plausible. After all, TMTG's stock price had soared simply on the strength of a money-losing social media app, so perhaps it would soar again if it were tied to one of the world's hottest assets? The bonds added a layer of security, and their structure allowed investors to earn a 4% return after a year and a half, even if the stock price hadn't soared.

However, market fervor typically fades. Although TMTG's balance sheet is now stronger—including billions of dollars worth of Bitcoin and $1 billion in debt—its market capitalization is $1.2 billion less than it was before the Bitcoin investment. Without the Bitcoin investment, investors currently value the company's original media business at just 60% of what it was valued at in May.

This doesn't mean TMTG is doomed, especially with three years remaining in Trump's second term. If Bitcoin prices continue to rise, coupled with support from White House allies, Trump's most loyal supporters may push up the stock price again, potentially adding hundreds of millions or even billions of dollars to Trump's wealth.