Forbes reveals Eric Trump benefits while American Bitcoin investors lose $500 million as stock value plummets.
According to a report by Forbes, American Bitcoin has caused a significant financial loss for retail investors, totaling around $500 million, while Eric Trump has reportedly seen his wealth increase from $190 million to $280 million since the firm went public.
American Bitcoin debuted on the Nasdaq in September 2025, achieving a valuation of $13.2 billion. However, its stock value has since dropped by an alarming 92%. Despite not personally investing in the company's founding, Trump has benefitted from the rise in his wealth during this tumultuous period.
Mining Costs and Operations
Trump claimed that American Bitcoin mines Bitcoin at a cost of $57,000 to $58,000 per coin, which Forbes clarified only reflects operational expenses. When including additional costs such as equipment purchases and marketing, the total mining cost soars to approximately $92,000 per coin. Currently, operational costs have decreased to around $47,000, but total expenses remain close to $90,000, while Bitcoin trades around $77,000.
Forbes also detailed the arrangement with Hut 8, from whom American Bitcoin acquired mining equipment. Hut 8 retained control over data centers and operational management, with American Bitcoin reportedly employing only two full-time staff members.
Financial Maneuvers with Bitcoin Collateral
In a strategic move, American Bitcoin pledged Bitcoin as collateral to secure a $330 million purchase of ASIC miners instead of paying in cash. If Bitcoin prices increased, the company could pay in cash and retain its coins; if prices fell, they would forfeit the pledged Bitcoin. Following the deal, Bitcoin prices dropped by about 30%, leading Forbes to speculate that American Bitcoin may lose the pledged 3,090 BTC, having mined only 1,800 BTC to date.
Should the market remain unfavorable, the mined Bitcoin will likely be used to settle the equipment costs, with payment options expiring around August 2027.
Market Purchases Outweigh Mining
Forbes indicated that around 70% of American Bitcoin's cryptocurrency holdings were acquired through market purchases rather than mining. After going public, the company sold 11 million shares for $90 million in just 27 days, using the proceeds to buy approximately 725 BTC. Further share sales continued, with total expenditures on cryptocurrency reaching about $525 million, now valued at approximately $390 million, resulting in a loss of around $135 million for shareholders.
The company's strategy primarily relies on arbitrage between its high market valuation and Bitcoin acquisitions through share issuance, with investor interest closely tied to the Trump family's brand.
Reactions and Controversy
In response to Forbes' findings, Eric Trump criticized the publication, labeling it a "political weapon" and a "disgrace to journalism." He emphasized that American Bitcoin has quickly grown to become the 16th largest public Bitcoin company, claiming ownership of over 9,000 BTC and a substantial mining fleet.
“Just a year ago, American Bitcoin did not exist. […] Today we own 9,000 BTC and are the 16th largest public Bitcoin company in the world, relying on a fleet of 90,000 miners,” he stated.
Critics within the community have pointed out inconsistencies in his statements, questioning the source of the claimed Bitcoin holdings and expressing concerns about the decline in American Bitcoin's stock value. In March, the company announced plans to expand its mining fleet by acquiring an additional 11,298 ASIC miners.
