The core idea behind the founding of the bitcoin mining and treasury company American Bitcoin (ABTC.US) was simple: holding and mining bitcoin would be sufficient to generate wealth. However, the company, co-founded by Eric Trump, son of the U.S. President, is now mired in a deep slump.
As bitcoin entered a bear market and demand for artificial intelligence (AI) surged, investors increasingly favored mining firms capable of repurposing their infrastructure for AI data centers. American Bitcoin, however, steadfastly adhered to its cryptocurrency strategy, resulting in its share price plummeting more than 95% from its all-time high.
This decline has erased over $6 billion from the market value of Eric Trump's stake in the past ten months, forcing the company to execute a 1-for-15 reverse stock split this week to maintain its Nasdaq listing qualification. On Wednesday, the company's shares fell to their lowest level ever.
Eric Trump currently holds approximately 6% of American Bitcoin and serves as its Chief Strategy Officer. The stake held by Donald Trump, who serves as a company advisor, has not been disclosed.
This reversal highlights how swiftly investor sentiment has shifted away from pure-play cryptocurrency concepts. Success is no longer about who can produce the most bitcoin, but about which companies possess the flexibility to monetize their power, land, and computing infrastructure for higher-value purposes.
For the Trump family, the struggles at American Bitcoin also reflect the high volatility inherent in their digital asset investments. While Donald Trump's latest financial disclosure reported at least $1.4 billion in cryptocurrency earnings last year, many retail investors have suffered heavy losses as crypto tokens linked to Trump and the stock price of American Bitcoin have tumbled.
Ironically, the predecessor to American Bitcoin stated upon its debut that its strategic goal was to build a portfolio of data center assets. American Data Centers Inc., an entity supported by Eric and Donald Trump and established in February 2025 by the Trump family's advisory investment bank, Dominari Holdings Inc., was described by Eric Trump at the time as "critical to the development of American AI infrastructure."
Yet, just a month later, the company pivoted, striking a deal with Hut 8 (HUT.US) to receive bitcoin mining equipment in exchange for equity and an exclusive services agreement. The renamed American Bitcoin then went public via a reverse merger with the listed miner Gryphon Digital Mining Inc., beginning trading on Nasdaq in early September last year.
The stock price peaked on its fifth trading day, closing at $139.65 on September 9th.
Failing to Capitalize on the AI Shift
Over the past nine months, as cryptocurrency prices have tumbled, investors have rewarded mining firms that lease their computing infrastructure for AI data centers. Companies like Riot Platforms (RIOT.US), Cipher Digital (CIFR.US), MARA Holdings (MARA.US), and TeraWulf (WULF.US) have all announced expansions into AI data center operations. Their share prices have risen an average of over 60% this year.
In contrast, American Bitcoin's stock has plunged 77%. An analyst at Needham & Co., John Todaro, noted, "Every company I cover is pivoting entirely to HPC (high-performance computing)."
Yet, American Bitcoin remains firmly committed to its bitcoin mining and hoarding strategy. In reality, it may have few other options. The company's primary assets are bitcoin mining machines and bitcoin reserves. Power, mining sites, hosting infrastructure, and day-to-day mining operations are all provided by its major shareholder, Hut 8, under an exclusive services agreement.
This means most of the optionality for AI data center business lies with Hut 8, which has aggressively pursued an AI strategy in recent years by repositioning around power infrastructure and signing multi-billion dollar AI data center leasing contracts. Hut 8's stock has more than doubled this year.
Holding On
Since last year, numerous companies began adding bitcoin to their balance sheet reserves. But as bitcoin's price continued to fall, most of these companies' shares suffered severe declines. The world's largest corporate bitcoin holder, Michael Saylor's Strategy (MSTR.US), even proposed a plan last month to sell some bitcoin, after years of pledging not to sell.
American Bitcoin reported a $118.2 million operating loss for the first quarter, which included a $117.2 million impairment loss on its bitcoin assets. However, Eric Trump recently stated on a podcast that American Bitcoin has no intention of selling its bitcoin holdings, saying it would not sell unless a "catastrophic, unimaginable" event occurred. In fact, the company continued buying bitcoin on the open market this Monday, adding another 500 coins.
Many investors believe bitcoin's price is nearing the bottom of this cycle. If prices recover in the future, American Bitcoin's focused strategy could ultimately pay off, especially if competitors that have pivoted to AI find it difficult to easily return to bitcoin mining.
Executives at American Bitcoin argue that, rather than viewing bitcoin mining as a stepping stone into AI infrastructure, they believe bitcoin itself will ultimately deliver the highest returns. They contend that accumulating bitcoin during a market downturn is more valuable than redirecting capital elsewhere.
The company also believes the industry-wide shift to AI could, in the long run, enhance its competitive advantage. As competitors dedicate more power and capital to AI data centers, the number of mining machines left on the bitcoin network will decrease, lowering the overall mining difficulty and allowing those who remain to earn a larger share of bitcoin rewards. Thus, the AI boom could actually help American Bitcoin secure a greater portion of bitcoin production.
American Bitcoin CEO Mike Ho stated on the company's Q1 earnings call, "We are seeing several public miners redirecting hundreds of megawatts of power to AI." He noted this trend "resulted in a roughly 6% decline in network-wide mining difficulty this quarter."
An analyst at Benchmark Co., Mark Palmer, said, "From a machine efficiency, machine scale, and bitcoin production capability standpoint, the company is actually in a very favorable position."
"The issue, of course, is that the bitcoin price has to go back up for this business model to really work."
That is precisely the message Eric Trump conveyed in April. Speaking at the 2026 Las Vegas Bitcoin Conference, he said, "We are in the greatest era in the history of cryptocurrency."
"Everybody just needs to hold on, just hold on."
Comments