Eric Trump's Bitcoin Business Exposed: A $500 Million Disaster for Investors

Eric Trump's American Bitcoin is being called a disaster by Forbes. The company, which went public in September 2024, has seen its stock plummet 92% from its peak, wiping out an estimated $500 million from everyday investors. But how did this happen?

The Pitch: A Money-Printing Machine?

Eric Trump claimed American Bitcoin could mine bitcoin for roughly $57,000 per coin, while bitcoin was trading at over $100,000. He touted it as a "money-printing machine" with unbeatable fundamentals. But the reality is far different.

The Real Cost: $90,000 per Bitcoin

Forbes analysis shows that when you factor in all costs—including equipment, marketing, and overhead—the actual cost to mine each bitcoin is around $90,000. With bitcoin currently trading below $80,000, the company is operating at a loss.

The Arbitrage Game

American Bitcoin isn't really a mining company. It's a hype-fueled arbitrage vehicle. The company sells overpriced stock to MAGA-minded investors and uses the proceeds to buy bitcoin. Since going public, it has sold over $500 million in stock to buy bitcoin that is now worth $390 million—a $135 million loss for shareholders.

The Trump Connection

Eric Trump's involvement is purely about branding. The company has only two full-time employees and relies on Hut 8 for operations. The Trumps contribute little more than their name and salesmanship.

A Risky Financing Scheme

American Bitcoin used an unorthodox financing strategy to buy $330 million worth of mining machines. If bitcoin prices don't rebound, the company may have to forfeit all the bitcoin it has mined to pay for the equipment.

The Bottom Line

Eric Trump has personally profited, boosting his net worth from $190 million to $280 million. But retail investors who bought into the hype are left holding the bag. As Forbes concludes, American Bitcoin is a disaster that preys on the MAGA faithful.