Trump Media's $3B Bitcoin Bet

Just days after Bitcoin (BTCUSD) reached a new high, some industry individuals told newswires that Trump Media & Technology Group (DJT) is planning to raise $3 billion to buy cryptocurrencies and launch an exchange–traded fund (ETF).

Rumours, which Trump Media responded to negatively, suggest that the group will make an announcement this week during the Bitcoin 2025 Conference in Las Vegas to pick up investors. Notably, this follows an exclusive gala dinner at Mar-a-Lago last week, where Donald Trump held for the top 220 holders of his own meme coin, $Trump. (Source: WSJ)

Now, according to the six people briefed on the raise, the group behind Truth Social wants to raise $2 billion in equity and $1 billion in convertible bonds, which is akin to Strategy’s (former MicroStrategy (MSTR)) debt and equity offerings. If confirmed, this could mark a significant pivot for the media company into the cryptocurrency space

With the price of the largest corporate holder of Bitcoin, MSTR, up 76% in early May from its 5-month low of ~$240 due to Bitcoin’s surge, investors may want to keep a close eye on how DJT shares perform as the secondary offering approaches on Friday, 30 May, if the timing does not change.

Trump Media’s $3B Crypto Raise Gambit

According to the latest figures, Trump Media’s valuation stands at around $5.7 billion at a price of about $25.70. The raise of $3 billion via equity and convertible bonds represents a substantial portion of the company’s market cap, with speculators saying that an expansion into financial services would strengthen the position of the  DJT in digital finance and support the price of Bitcoin. The $3 billion raise, backed by ClearStreet and BTIG,  has similarities with Saylor’s debt strategy. If history is any guide, Saylor’s strategic bet on Bitcoin has transformed the software company from loss-making to a ~$45 billion Bitcoin corporate holder. 

On the other hand, DJT has surged at times this year, with a notable surge in April due to entering the financial services industry, though this turned out to be a short squeeze. The stock is down around 25% year-to-date, but appears up over 8% at pre-market trading on Tuesday, 27 May. Still, Trump Media’s rumoured move to issue debt to buy Bitcoin may allow the company to outperform traditional assets, ultimately creating value for investors.

Meanwhile, Trump has signed an executive order for a “Strategic Bitcoin Reserve” since taking office in the White House, with Arizona, New Hampshire, and now Texas bills passed already, set up a Crypto Task Force and ‘fired’ crypto critic SEC chairman Gary Gensler. Following reactions to his influence in the crypto space and accusations of conflicts of interest, the Republican even transferred more ownership of DJT to Junior to avoid controversy.

As speculation builds around RTrump Media's potential announcement, all eyes are turning to the Bitcoin 2025 Conference in Las Vegas, where these rumours could be confirmed or denied.

Trump Executives Take Bitcoin Stage

The crypto conference in Las Vegas focuses on technical discussions and updates, including Bitcoin’s ecosystems, bridges, technological partnerships, and governance debates. However, beyond the technical focus, a roster of industry leaders and government officials is expected to take the stand, including Strategy’s Michael Saylor, Senator Cynthia Lummins, and JD Vance, with the latter marking the first time ever for a US vice president. 

Notably, Eric and Junior Trump are also expected to talk about “Bitcoin as a Public Asset” on Wednesday, which comes at an interesting junction, a month after Howard Lutnick’s son struck a $3.6 billion deal involving SoftBank (9984.TY) and Tether to form a publicly traded investing vehicle for Bitcoin. Lutnick, Trump’s Commerce Secretary, announced his plans to start up a “Bitcoin Financing business” at Bitcoin 2024. Now, Brandon, Howard Lutnick’s son, will speak along with Paolo Ardoino, the founder and CEO of stablecoin Tether, and Cantor Fitzgerald, a financial services firm specialising in prime brokerage and institutional equity, on Thursday.

Reshaping the Crypto Industry?

The highly anticipated event has yet to increase Bitcoin volatility, with stakeholders awaiting clues on regulations, policies, and conversations between government officials and industry leaders to influence market direction.

Strategy has invested around $45 billion to bring its total Bitcoin purchases up to 580,250 coins following its latest acquisition last week. To fund the purchase, the company sold 847,000 of its common shares, MSTR, 678,970 STRK stock, and 104,423 STRF stock. Notably, Bitcoin’s rise back above triple-digit prices has supported the company's stock. Strategy missed earnings expectations in early May, though the company raised its outlook for Bitcoin gains for the year to $15 billion from just $10 billion previously.

In fact, crypto-related companies like MARA Holdings (MARA), Coinbase (COIN), and Riot Platforms (RIOT) seem to have benefited from the rise of Bitcoin, as the Senate has taken steps to establish a framework for regulating stablecoins. Even Jamie Dimon, JPMorgan’s (JPM) CEO, said that the bank would allow its clients to buy bitcoin, with high-profile speakers at the Conference expected to at least lead to short-term market moves.

However, the market will also pay attention to the FOMC minutes on Wednesday, as well as the US GDP and PCE figures on Thursday and Friday.

Closing Words

Trump Media plans to raise $3 billion to fund its cryptocurrency initiatives, which may be confined during the Bitcoin 2025 Conference this week, where industry heavyweights and government allies appear to be positioning DJT stock as both a media play and a proxy Bitcoin investment similar to Strategy's successful model.

The timing suggests a calculated attempt to create positive momentum ahead of the expected secondary offering on Friday. While the DJT stock has underperformed this year, the pre-market surge on Tuesday morning sees an appetite for crypto exposure. However, given prior volatility patterns in DJT shares earlier this year and recent all-time highs in Bitcoin, investors should approach any announcements at the Bitcoin Conference with caution. 

*Past performance does not guarantee future results