Cryptocurrency| Fundraising of $2.5 Billion for Bitcoin Investment by Trump Media
The Trump Media and Technology Group (TMTG) intends to mobilize approximately $2.5 billion to invest in Bitcoin, as per a statement from TMTG's CEO, Devin Nunes. This strategic move aims to broaden the company's revenue streams by venturing into the financial sector.
TMTG will raise the funds through various means, including the sale of $1.5 billion in stock at its last closing price and $1 billion in convertible notes, priced at a 35 percent premium. According to the announcement, these funds will be allocated towards establishing a "Bitcoin treasury."
Crypto platforms Anchorage Digital and Crypto.com will provide custody for the new Bitcoin holdings. As of the first quarter's end, Bitcoin will be held alongside existing cash and short-term investments totaling $759 million on TMTG's balance sheet.
"We view Bitcoin as a symbol of financial liberty," said Nunes, who characterized the move as a significant development in the company's mission to acquire "crown jewel assets consistent with America First principles."
Shares of the company behind Truth Social, a streaming and social media platform, saw a decline of 6 percent in early trading following the announcement.
TMTG has been actively exploring mergers and acquisitions to enter the financial services space, with a particular focus on cryptocurrencies. In April, the company reached an agreement to launch retail investment products, such as crypto and exchange-traded funds (ETFs).
The Trump family has ventured extensively into cryptocurrencies, with investments in nonfungible tokens (NFTs), a meme coin, a stake in a new Bitcoin producer called American Bitcoin, and the cryptocurrency exchange World Liberty Financial. However, this increased presence in the crypto market has received scrutiny from lawmakers, including Democratic Senator Elizabeth Warren, who has expressed concerns about the regulatory oversight of ETFs launched by TMTG.
Trump's stance on cryptocurrencies has evolved since his first term, when he referred to them as "not money" due to their volatility and value "based on thin air." Nevertheless, he has recently shown more interest in the technology, even receiving assurances from crypto industry backers during his 2024 presidential campaign that they would invest heavily to secure his re-election.
Last week, Trump rewarded 220 top investors in his other cryptocurrency project, the $Trump meme coin, with a gourmet dinner at his luxury golf club in northern Virginia, sparking accusations of mixing personal profit with White House duties.
The strategic investment in Bitcoin by TMTG, led by Devin Nunes, signifies a foray into the financial sector, combining politics and finance. This move reflects TMTG's mission to acquire assets that align with America First principles, similar to their investments in cryptocurrencies like NFTs and meme coins. The involvement in the cryptocurrency market, however, has stirred debates about regulatory oversight, as demonstrated by Democratic Senator Elizabeth Warren's concerns.
