Bitcoin firm backed by Trump brothers jumps 110% on debut before pulling back. Is it a buy?

By Frances Yue

Eric Trump, left, and Donald Trump Jr. pose outside the Nasdaq in Times Square in New York on Aug. 13.

Shares of American Bitcoin, a bitcoin mining and treasury company backed by President Donald Trump's two eldest sons, surged as much as 110% on Wednesday before pulling back in its first day of trading after completing a merger with Nasdaq-listed Gryphon Digital Mining.

Now trading under the ticker symbol "ABTC" (ABTC), American Bitcoin is majority owned by Miami-based mining company Hut 8. Its shareholders include Eric Trump and Donald Trump Jr., the president's sons.

Bitcoin (BTCUSD) mining companies operate large-scale computer farms using specialized machines to validate transactions on the bitcoin network and earn rewards.

Shares of American Bitcoin jumped as much as 110.4% on Wednesday to an intraday peak of $14.52, well above Gryphon's closing price of $6.90 on Tuesday, but they retreated to $8.04 by Wednesday's close, according to FactSet data. At that point, the company's market capitalization stood at $7 billion.

Even after the pullback, American Bitcoin's valuation appeared "a little stretched," according to Chris Brendler, senior research analyst at Rosenblatt Securities. Yet he cautioned it might be too early to draw a firm conclusion.

American Bitcoin's public debut marks the latest in a string of crypto ventures tied to the Trump family, who have ramped up their digital-asset efforts in recent months. On Monday, World Liberty Financial, another Trump-linked crypto project, began trading, though its token has already tumbled more than 50% from its Monday high, according to CoinMarketCap data. Earlier this year, Trump himself rolled out a namesake meme coin, which has also fallen sharply from its peak.

These ventures come as the White House pushes a more crypto-friendly policy agenda. In March, Trump signed an executive order calling for the creation of a strategic bitcoin reserve, though few details have emerged since. In July, the President's Working Group on Digital Assets released a report with regulatory recommendations for the industry, signaling that digital assets have become a policy priority.

That overlap has drawn criticism from some observers who think the Trump family's direct participation in crypto could pose conflicts of interest with the president's initiatives.

White House press secretary Karoline Leavitt dismissed suggestions of conflicts of interest in a statement to MarketWatch. She said "neither the president nor his family have ever engaged, or will ever engage, in conflicts of interest." She said that the administration is "fulfilling the president's promise to make the United States the crypto capital of the world by driving innovation and economic opportunity for all Americans" through several initiatives.

What is Hut 8?

American Bitcoin is primarily a crypto-mining company that traces its roots to March, when it was formed through a combination of the Trump brothers' American Data Centers and Hut 8.

Hut 8, one of the largest bitcoin miners and infrastructure providers in the U.S., holds about 64% of the equity but maintains 80% of the total voting power of the newly public American Bitcoin company, based on the multi-class share structure, according to Brendler's calculations.

Eric Trump owns roughly 7.5% of American Bitcoin, according to calculations by Bloomberg News. The stake is now worth over $500 million. It's unclear how much Donald Trump Jr. owns in the company.

That initial formation of American Bitcoin paved the way for a subsequent merger with Gryphon Digital Mining. After the deal closed Wednesday, Hut 8, the Trump brothers and other American Bitcoin investors together controlled roughly 98% of the combined company, while Gryphon shareholders held the remaining 2%.

According to Matt Prusak, president at American Bitcoin, the merger allowed American Bitcoin to go public without the long and uncertain process of a traditional IPO, giving it quicker access to capital markets.

In addition to completing the merger, American Bitcoin announced plans on Wednesday to raise as much as $2.1 billion through a new share offering. Management said the proceeds would be used to purchase bitcoin, acquire additional mining hardware and fund general corporate purposes.

The deal has also reshaped Hut 8's business model. Brendler at Rosenblatt Securities described the separation of Hut 8's mining division as a "key positive," arguing that American Bitcoin offers a more effective vehicle for raising the large amounts of capital required in the mining sector, a business that is known to be capital intensive.

Bitcoin treasury strategy

Alongside its mining operations, American Bitcoin also follows a treasury strategy that involves accumulating bitcoin on its balance sheet, a practice similar to several other mining firms. Since its launch earlier this year, the company has already built up a stockpile of 2,443 bitcoins, worth roughly $274 million at current market prices.

The move also reflects a growing trend of companies, including those outside the crypto sector, adding digital assets to their treasuries. However, enthusiasm may have cooled in recent weeks. The premium for investors looking to own some of these companies' shares versus owning crypto outright has narrowed, with a few trades even turning negative.

When asked if this was a concern for his company, Prusak, American Bitcoin's president, argued that this shift reflects a healthier market, not a weaker one. "The decrease of the premium for certain firms shows that the market is getting smarter and more selective," he said. Investors, in his view, are prioritizing straightforward exposure to bitcoin. "What investors want is really simple, transparent bitcoin per share exposure, which is exactly what ABTC delivers."

He added that American Bitcoin enjoys a built-in advantage compared with companies that only buy bitcoin. By mining the asset, the firm can acquire it at a structural discount, Prusak said. "It gives us a massive structural advantage versus companies that are just purchasing," he said.

-Frances Yue

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

09-03-25 1835ET