Trump Media Plans $3 Billion Crypto Investment

Trump Media and Technology Group, the company behind former US President Donald Trump’s Truth Social platform, is planning to raise $3 billion through a combination of equity and convertible bonds to purchase Bitcoin and other cryptocurrencies. This move is part of a broader strategy to follow the footsteps of other companies that have allocated funds to Bitcoin as a hedge against inflation and to avoid becoming "zombie companies."

The plan involves issuing $2 billion in equity and $1 billion in convertible bonds, which can be converted into equity at a later date. The size of the raise may change, according to sources familiar with the matter. The equity is expected to be sold at the market price as of the close on May 23, when the share price closed at $25.72, marking a 4.6% increase on the day. Trump Media’s market capitalization was $5.7 billion as of May 23.

This approach mirrors that of other companies such as Strategy, Metaplanet, and Semler Scientific, which have also allocated part of their funds to Bitcoin. These companies have cited the benefits of betting on crypto as a hedge against inflation and a means to keep their businesses from becoming "zombie companies."

Trump Media’s move to invest in cryptocurrencies may increase scrutiny toward the Trump family’s growing crypto businesses. Democratic lawmakers have pushed back against bipartisan bills over the Trump family’s crypto dealings, with some staging protests against the memecoin dinner Trump hosted on May 22. Critics argue that Trump’s crypto ventures pose a conflict of interest, especially as he could hold influence over an industry he stands to profit from.

Trump’s crypto ties include non-fungible token collections, the Official Trump (TRUMP) and Melania (MELANIA) memecoins, decentralized finance platform World Liberty Financial, and a dollar-pegged stablecoin. According to the report, Trump transferred his 53% share in Trump Media and Technology to a revocable trust managed by Donald Trump Jr.

This initiative marks the Trump family's latest foray into the crypto asset space, following previous ventures such as an NFT trading card, two meme coins, and investments in crypto mining venture American Bitcoin and stablecoin backer World Liberty Financial. The move comes as Bitcoin reached a record high of $109,000 last week, reflecting the growing interest and investment in cryptocurrencies. The secondary share raise is expected to be conducted on at-the-market terms, with shares likely to sell near their recent closing price, representing a market value of nearly $6 billion. This significant investment in crypto assets aligns with the Trump family's broader vision to position the US as the "crypto capital of the world," underscoring their commitment to the digital currency landscape.