Trump Media’s daring $2.5 billion investment in Bitcoin sends ripples through the market.
Trump Media & Technology Group (TMTG), a firm associated with former US President Donald Trump, has revealed intentions to generate $2.5 billion through a combination of stock and convertible note sales aimed at acquiring Bitcoin, as stated in a release on May 27.
This acquisition is set to position the company among the top 10 corporate holders of Bitcoin worldwide. Strategy (previously known as MicroStrategy) leads with the largest reserve of the cryptocurrency, holding over 580,000 BTC.
Following the announcement regarding TMTG’s Bitcoin purchase, the price of the leading cryptocurrency surged to over $110,000 after showing little movement for most of the day, based on data from CryptoSlate.
In contrast, TMTG’s stock experienced an 8% decline, dropping to $23.57 at the time of reporting, according to figures from Google Finance.
TMTG’s Bitcoin Reserves
The proposal involves TMTG issuing around $1.5 billion in common stock and $1 billion in zero-coupon convertible notes.
This funding initiative has attracted commitments from nearly 50 institutional investors and is anticipated to conclude by May 29, contingent on standard conditions.
The firm indicated that it has enlisted Crypto.com and Anchorage Digital for the custody of its digital assets.
CEO Devin Nunes characterized this initiative as a pivotal move to incorporate Bitcoin as a key asset that supports the company’s larger objectives.
Nunes stated:
“This investment will help shield our Company from the harassment and discrimination posed by financial institutions, which affect many Americans and US companies.”
The company’s financial statements currently indicate around $759 million in diversified assets, including cash and short-term investments.
Deepening Cryptocurrency Initiatives
Nunes elaborated that the decision to establish a Bitcoin reserve is in sync with the company’s broader cryptocurrency strategies, commenting:
“This will foster synergies for subscription payments, a utility token, and other transactions related to Truth Social and Truth+. It marks a significant advancement in the Firm’s plans to evolve into a holding entity by acquiring more revenue-generating ‘crown jewel’ assets that align with American First values.”
Additionally, the firm had earlier disclosed its intention to create a utility token and digital wallet for its Truth+ streaming platform.
TMTG is also collaborating with Crypto.com to introduce a new series of exchange-traded products that will combine digital assets like Bitcoin and Cronos with traditional financial instruments.
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