Trump's Second Son's Bitcoin Game: Making $100 Million for Himself, Losing $500 Million for Retail Investors

Original Title: How Eric Trump Got Rich From Bitcoin While Losing Investors A Fortune

Original Author: Dan Alexander, Forbes

Original Translation Compiled by: Peggy, BlockBeats

Editor's Note: The Trump family possesses a hereditary skill: bluffing, making things seem grander than they are.

This time, Eric Trump has brought this approach into the crypto space. He has packaged his Bitcoin company as a "money-printing machine," claiming the firm can mine Bitcoin at roughly half the market price.

However, when Forbes journalist Dan Alexander looked into the books, a different side of the story emerged: 70% of the company's Bitcoin holdings were not mined but purchased through stock dilution; the real comprehensive cost was far higher than Eric's quoted figures; and the financing structure that made the balance sheet look healthier could also mean that all the Bitcoin mined by the company to date will have to be used in bulk to pay mining rig bills in the future.

The numbers ultimately point to a more direct conclusion: Eric Trump's personal wealth increased by approximately $90 million, while ordinary investors collectively lost about $500 million.

After the report was published, Eric Trump quickly fired back on X, accusing Forbes of being acquired by China, calling the report a politically driven hit piece, and citing a string of operational data to refute the claims: 7,000 Bitcoins, nearly 90,000 mining rigs, and Q4 revenue of $78.3 million. Along the way, he also brought up his fundraising efforts for a children's hospital from twenty years ago, trying to prove that Forbes has been targeting him, a "good guy."

Only one thing, he never directly addressed: where did that $500 million go?

The following is the original text:

Eric Trump riling up the crowd. Photography: Daniel Ceng/Anadolu via Getty Images

The ability to rouse a crowd isn't only useful in politics. Just ask Eric Trump: his Bitcoin company attracted a legion of followers, then dumped overpriced stock on them.

In February, Eric Trump appeared energized on an earnings call, ready to do what the Trumps do best — sell.

"We are rapidly becoming the leader in the Bitcoin world, and I genuinely believe we have the strongest brand," Eric said. "I want to thank Mike (Ho), Asher (Genoot), Matt (Prusak), and everyone at American Bitcoin."

Note: Mike Ho: CEO of American Bitcoin and Chief Strategy Officer of Hut 8. Asher Genoot: Executive Chairman of American Bitcoin, Co-founder of Hut 8, who led the partnership deal with the Trump family. Matt Prusak: President of American Bitcoin, former Hut 8 employee assigned by Hut 8.

The ending is quite telling. Saying "everyone" is noteworthy because American Bitcoin has hardly anyone else.

The annual report filed a month after the earnings call revealed the company had only two full-time formal employees, likely CEO Mike Ho and President Matt Prusak. Perhaps a few more — Ho also serves as an executive at another company; someone who worked in investor relations at that company for less than a year now lists himself as "Chief of Staff" at American Bitcoin on LinkedIn; another woman stated she started working as the company's social media manager in January. (Executive Chairman Asher Genoot, along with Ho and three independent directors, form the five-person board.)

The Trump family figured out a long time ago that making things seem bigger than they are can be profitable.

Allegedly, Donald's father, Fred Trump, inflated project costs to deceive regulators and profit from it. Donald Trump inflated asset values to banks and media like Forbes, eventually being found guilty of fraud by a New York judge. Eric was also caught up in that lawsuit and was banned from serving as an officer or director of any New York-registered company for two years. Despite this, he started anew, incorporating in Delaware with Florida as his base, and marketed his company in a way that would make his ancestors proud.

Note: Fred Trump: Father of Donald Trump, a New York real estate developer who was allegedly involved in inflating construction costs to extract higher profits.

Eric Trump's latest Bitcoin venture might be selling a story more than a business. According to him, American Bitcoin can mine Bitcoin at roughly half the market price, a genuine "money-printing machine." But a closer look at the numbers raises questions about whether the company can be profitable at mining, let alone maintain such remarkable margins. Representatives for Eric Trump, the Trump Organization, and American Bitcoin did not respond to multiple requests for comment from Forbes. Many trust the son of the President, and real money has been bet. On September 3, 2025, American Bitcoin debuted on the public market with roughly $270 million in Bitcoin on its balance sheet, yet investors gave it a market cap of $13.2 billion.

Over the past eight months, American Bitcoin has continuously used this wildly inflated valuation to sell stock and buy more Bitcoin. The now heavily diluted stock price has fallen 92% from its peak. Eric Trump, who seemed to enter the deal with almost no cost, is still thriving, seeing his estimated personal wealth inflate from about $190 million to $280 million through financial alchemy. Other insiders have also benefited handsomely. In contrast, ordinary investors who bought the sales story with their own money are estimated to have suffered total losses of $500 million.

Eric Trump (left), seen earlier in his career with a charitable image, launching a fundraising drive at his father's golf course shortly after college to raise money for St. Jude Children's Research Hospital. Photography: Bobby Bank/WireImage

Eric Trump's first truly independent project wasn't an apartment building; it was a charity.

In 2006, he graduated from Georgetown University with a degree in Finance and Management, full of passion to change the world. At the time, his older brother Don Jr. and sister Ivanka had already settled into Trump Tower, working on real estate projects. Driving on the New Jersey Turnpike one day, Eric later recalled in an interview with Forbes, another idea struck him: how could he truly make a difference for the world? Thus began his earliest entrepreneurial venture — a non-profit called The Eric Trump Foundation.

The organization did a lot of good. More of a fundraising platform than an operational charity, it channeled over $16 million to St. Jude Children's Research Hospital. But over the years, the organization, and Eric himself, began to become more "Trumpian."

Documents obtained by Forbes through public information requests (despite objections from the non-profit's legal team) revealed a pattern of dishonest fundraising rhetoric, weak governance, and chaotic finances. Eric told donors he kept expenses minimal, directing almost all funds to St. Jude, partly because his father provided Trump-owned club venues for free and celebrities agreed to perform "pro bono." However, checks and invoices obtained by Forbes show: over $500,000 went to other charities, over $500,000 went to Trump-owned businesses, at least $90,000 was paid to various performers, and over $35,000 went to a car service company — whose passengers included Eric's mother, a Real Housewives star, and a van full of people heading to a Hooters restaurant.

In his early years working for his father's company, Eric mainly handled the hotel business, learning a lot, including a key insight: making money by slapping a brand on a business is far easier than actually building one.

The Trump Group defaulted on a loan for its Chicago hotel in 2008, put its Atlantic City portfolio into bankruptcy protection in 2009, and its Washington D.C. hotel suffered years of losses. Eventually, the Trump family pivoted their hotel empire's expansion strategy towards what the industry calls "asset-light," shifting focus from development to management and brand licensing.

Eric's other training ground was his father's golf course portfolio, where he saw the beauty of unconventional financing structures. In the 80s and 90s, golf clubs typically collected deposits upon membership, promising zero-interest repayment after thirty years. These liabilities sat on the books, deterring many investors from purchasing the properties. But Donald Trump was undeterred, eventually taking on about $250 million in such liabilities, thereby acquiring over a dozen golf properties across the country, while carrying these liabilities as zero on his personal balance sheet for years. By the time repayment neared, the properties' value far exceeded the amounts owed.

In January 2017, Donald Trump entered the White House, and Eric and his brother Don Jr. took over their father's portfolio. Eric seemed to have few plans of his own, preferring to follow the established path. "We're not a company that sells assets," he told Forbes in an interview from Trump Tower's 25th floor in February 2017. "We buy, and we make them beautiful." The Trump brothers tried launching new ventures, including two mid-level hotel brands, but with limited success. As operations struggled and their father's cash reserves dwindled, they did a lot of what Eric said they wouldn't do over the next seven years: sell assets, estimated to have netted about $411 million collectively.

Then, a new money-making opportunity arose: the 2024 election.

A return to the White House meant business opportunities. The President's children attend his second inauguration on January 20, 2025. Photography: Kenny Holston-Pool/Getty Images

Just two weeks after Donald Trump defeated Kamala Harris, the company that would later become American Bitcoin was quietly incorporated in Delaware. It didn't start as a crypto play. Dubai-based developer Hussain Sajwani, who had partnered with the Trumps on a Dubai golf project, showed up at Mar-a-Lago and announced a $20 billion plan to build data centers in the US, riding the AI wave. "That guy knows what he's doing," the President-elect praised. A few weeks later, Trump's two sons disclosed their plan to follow this strategy, naming the company "American Data Centers," which Eric Trump called "vital to America's AI infrastructure development."

A month later, he changed course. Introduced by mutual friends, Eric and Don Jr. met two entrepreneurs: Asher Genoot and Mike Ho. These two already owned a business similar to what the Trump brothers envisioned — data center giant Hut 8, which had exposure to AI business and a significant Bitcoin mining operation. Shortly after the AI boom hit, the Bitcoin reward for solving mathematical problems halved, driving mining costs up sharply. On an industry level, massive hash rate migrated towards AI, and Hut 8's institutional investors pressured Genoot to follow the trend.

However, Genoot and Ho, with their background in branding and arbitrage, devised a more creative solution: convince the Trumps to abandon the data center plan by offering them a 20% equity stake in their Bitcoin mining rigs. Then, leveraging the involvement of the First Family, plug these hard assets into a public company, igniting a hype machine fueled by the Trump aura.

The deal structure was tailor-made, as if designed for someone familiar with the hotel business. While the machines ran non-stop, American Bitcoin's operation functioned more like an asset-light hotel brand: Hut 8 owns the properties, operates the data centers, handles back-office tasks, and even the executives are Hut 8 personnel — Prusak previously worked at Hut 8, Ho remains employed there while simultaneously being CEO of American Bitcoin and Chief Strategy Officer of Hut 8. This allowed the Trump brothers to focus solely on their forte: sales.

"I remember telling them, 'Listen, there have to be two words in the name,'" Eric Trump later recalled in a video interview with CoinDesk. "'It has to have 'America,' and it has to have 'Bitcoin.' One of them said, 'Eric, then it's American Bitcoin, that's the name.'"

On the day of American Bitcoin's listing, investor enthusiasm was high, pushing Eric Trump's estimated personal wealth briefly past $1 billion. Photography: Michael M. Santiago/Getty Images

Ever since Eric Trump entered the crypto space, he has been telling a mythologized story of why he got in. "Every single bank in this country has blacklisted me," he said at a conference in Wyoming last August. "Because my father is a political figure, we got de-banked," he added about a week later in Hong Kong. "Every single major bank started closing our accounts," he claimed in Palm Beach earlier this year. "You know what we did? We went out and we got into decentralized finance, because we realized that's the future of finance."

But that's not the case.

Sure, Capital One and JPMorgan Chase closed some Trump accounts in 2021, six years after Donald Trump entered politics. By then, the President's reputation was battered by the Capitol riot events and a sweeping investigation by the New York Attorney General, which ultimately led to a court ruling that the Trump Organization committed fraud and was likely to reoffend.

Still, plenty of banks were willing to work with the Trumps — even JPMorgan, shortly after closing some accounts, participated in refinancing two of the largest loans in the Trump portfolio. Trump left the White House strapped for cash and highly leveraged, desperately needing support from large lenders, which he got: between January 2021 and mid-2022, as part of a comprehensive balance sheet restructuring, the former president, with help from his sons Eric and Don Jr., completed nearly $700 million in debt refinancing.

So, why did Trump really enter crypto? A more plausible explanation is that he saw an opportunity to extend his licensing business, selling NFTs just like sneakers and guitars. He started with NFT trading cards featuring digital images of him as a superhero. The product sold out in a day, ultimately netting the former president over $7 million in cash and crypto — every cent crucial for someone facing a nearly $500 million fraud judgment. (An appellate judge later overturned the judgment due to disagreement over the penalty amount but didn't deny the fraud finding.) Subsequent crypto projects brought in hundreds of millions more in liquidity, increasing the First Family's betting scale, including a separate plan announced last May to invest roughly $2 billion in crypto through Trump Media and Technology Group.

In 2025, accumulating Bitcoin became the year's hottest trade. Over 200 public companies rushed to emulate Michael Saylor's Strategy, which amassed over $50 billion in Bitcoin, seeing its market cap soar during the price surge and then plummet recently. American Bitcoin stood out in this frenzy for an obvious reason: the First Family aura. But on the day American Bitcoin hit the public market on September 3, 2025, Eric Trump presented a more data-driven narrative in a Spaces conversation on X. "Our actual cost to mine a Bitcoin every day is around $57,000, $58,000 per coin," he said, noting that the market price was roughly double that at the time. "Our fundamentals couldn't be better."

This argument was quite persuasive, though the speaker had previously shown a tendency during charitable fundraising to selectively ignore inconvenient expenses. The $50,000-plus figure did cover American Bitcoin's operational costs for the rigs. But including other expenses — equipment purchases, marketing, capital allocation — the all-in cost climbed much higher, estimated at around $92,000 per Bitcoin at the time, only profitable if crypto prices remained high.

Including depreciation is particularly crucial in American Bitcoin's case, as it borrowed a very unconventional financing strategy from Hut 8. Between August and September 2025, American Bitcoin spent roughly $330 million upgrading its mining fleet. Instead of paying cash immediately, the company pledged a number of Bitcoins and secured an option on the final payment method: if Bitcoin's price rose, the company could pay around $330 million in cash and redeem the pledged Bitcoins; if the price fell, it could directly use the pledged crypto to settle the debt.

Since this massive purchase, Bitcoin has dropped about 30%. This means it now seems likely that American Bitcoin will use the pledged crypto assets to pay for the equipment. But here's the issue: American Bitcoin pledged a total of 3,090 Bitcoins (as of March 25), while the company is estimated to have mined only about 1,800 Bitcoins to date. In other words, if the price doesn't recover, all the Bitcoin the company has ever mined will be completely used up to pay for the equipment costs as the options expire around August 2027 — netting nothing.

Investors may not understand this point. The company has about 15 months to decide whether to pay with crypto or cash, and during this time, the mined Bitcoins still sit on the balance sheet. The result is that American Bitcoin looks much healthier than it actually is. The company heavily promotes this Bitcoin hoard as a core selling point in its investor pitches while downplaying the fact that all or most of it will eventually be used to pay for the machines that dug them up.

Beyond the marketing appeal, it's easy to see why the Trumps were interested in this payment method — they used similar unconventional financing to build their golf course portfolio back then. That time they bet right because the asset value actually went up.

Eric Trump has become a regular at major global crypto conferences, pictured here attending an event in Hong Kong. Photography