Cramer's Warning: ABTC's Trump-Backed Vision vs. Market Skepticism

Jim Cramer, host of CNBC’s Mad Money, has issued a stark warning to investors in American Bitcoin (ABTC), labeling the stock as “a total spec” and cautioning that it could result in “losing everything.” The remarks, made during a September 25 segment of the show, underscored the speculative nature of ABTC, a Bitcoin mining firm co-founded by Eric Trump and majority-owned by Hut 8, a Canadian miner. Cramer emphasized that while speculative investments can be part of a diversified portfolio, ABTC’s high-risk profile requires full awareness of potential losses.

ABTC’s stock has faced significant volatility since its Nasdaq debut on September 3 following a merger with Gryphon Digital Mining. The shares have declined from an initial price of $8.32 to $6.58 as of September 26, reflecting broader market jitters in the crypto sector. Cramer highlighted the stock’s premium valuation, trading at a price-to-earnings (P/E) ratio of 39.8x—well above the U.S. software industry average of 35.4x and peers at 11x—while noting that earnings growth has turned negative. The company’s strategy of mining Bitcoin below market cost and holding reserves, championed by Eric Trump, has drawn skepticism due to the sector’s high energy costs and thin profit margins.

The broader crypto market has also experienced a downturn, with Bitcoin (BTC) falling over 5% in a week to trade at $109,439.91 as of late September. This decline, coupled with a broader pullback in crypto assets, has amplified concerns about leveraged positions. CoinGlass data revealed $1.7 billion in liquidations across the sector in a single week, with Ethereum (ETH) accounting for the largest share. These market dynamics have reinforced Cramer’s warnings about the risks of over-leveraging in a volatile space.

ABTC’s business model faces additional challenges. Bitcoin mining is inherently capital-intensive, with energy costs consuming 70–80% of operational expenses. The company’s merger with Gryphon, which emphasizes renewable energy strategies, aims to mitigate these costs, but analysts remain cautious. The sector’s competitive landscape, from Texas to Kazakhstan, further complicates ABTC’s ability to achieve profitability. Hut 8’s majority ownership adds a layer of scrutiny, as the firm itself holds a substantial Bitcoin reserve but faces questions about its own financial sustainability.

Cramer’s comments align with broader institutional skepticism toward speculative crypto plays. The stock’s high P/E ratio and recent earnings weakness contrast with its ambitious Trump-backed vision of positioning ABTC as a backbone of U.S. Bitcoin infrastructure. While the political linkage to Donald Trump’s push for crypto mining leadership has generated attention, it has not translated into investor confidence. The stock’s performance, coupled with Cramer’s warning, highlights the tension between long-term strategic goals and short-term market realities.

The market’s reaction to ABTC and other Bitcoin-related assets reflects a broader recalibration. With the Federal Reserve’s rate policy and macroeconomic uncertainties looming, investors are increasingly prioritizing risk management. Cramer’s blunt assessment serves as a reminder of the inherent risks in speculative tech and crypto stocks, particularly those with unproven business models and high valuations. As the crypto sector navigates regulatory and economic headwinds, ABTC’s trajectory will depend on its ability to demonstrate scalable profitability and operational resilience.

Source: [1] Jim Cramer Sends Harsh Warning on Eric Trump-Backed Stock (https://www.thestreet.com/crypto/investing/jim-cramer-sends-harsh-warning-on-eric-trump-backed-stock) [2] Jim Cramer Says American Bitcoin (ABTC) Investors Risk Losing It All (https://coinpedia.org/news/jim-cramer-says-american-bitcoin-abtc-investors-risk-losing-it-all-heres-why) [3] Jim Cramer’s Dire Warning: American Bitcoin (ABTC) Faces Existential Threat (https://www.btcc.com/en-US/square/Coingape/1023068) [4] Cramer Warns You Could 'Lose Everything' with American Bitcoin (https://u.today/cramer-warns-you-could-lose-everything-with-american-bitcoin) [5] Crypto Market Liquidations in 2025: Key Trends (https://www.okx.com/en-us/learn/crypto-liquidations-2025-bitcoin-recovery) [6] September Crypto Crash Drives Biggest Liquidations of 2025 (https://coinpedia.org/news/september-crypto-crash-drives-biggest-crypto-liquidations-of-2025/) [7] Watch These Bitcoin Price Triggers as Price Dips to $112,000 (https://cointelegraph.com/news/biggest-liquidation-of-2025-5-things-bitcoin-this-week)