Niamh Rowe
4 min read
Trump Media & Technology Group has tapped investors for $2.5 billion to fund a cryptocurrency reserve.
Institutional investors have bought shares in the firm under a private placement, the Trump family’s media company announced Tuesday, with the proceeds set to be invested in Bitcoin.
Around 50 investors purchased $1.5 billion worth of common shares, with a further $1 billion raised via convertible bonds. Shares in TMTG dropped almost 14% following the announcement.
The move continues the trend of publicly-traded companies raising capital to stockpile Bitcoin as treasury assets. There are currently 30 companies with Bitcoin reserves listed on the Nasdaq, with treasuries worth a combined total of more than $85 billion — about 2% of the coin’s total market cap.
The token has had staggering returns — up 60% in the past year, thereby boosting balance sheets for many companies. Meanwhile, the pitch for investors in the stock market is that treasuries provide exposure to crypto’s steep gains without needing to hold the assets.
Business intelligence company Strategy, formerly known as MicroStrategy (MSTR), is considered the blueprint. Its CEO Michael Saylor has spearheaded using stock sales and debt financing to build a Bitcoin war chest worth over $40 billion, a move that has made the firm the 40th largest on the Nasdaq 100 index.
Many of them are crypto mining firms such as MARA (MARA), Riot Platforms (RIOT), and CleanSpark (CLSK). Amid narrowing margins, it cost more to mint a Bitcoin than purchase one during the last quarter of 2024, according to a report by CoinShares. Miners have raised more than $3.7 billion via convertible bonds since November in order to purchase tokens.
Crypto-related firms like Galaxy Digital Holdings, Coinbase (COIN), and Block (SQ) have also bolstered reserves, with a combined total of $3.39 billion worth of Bitcoin on their balance sheets. Tech companies outside of the crypto industry are also among the holders: Tesla’s (TSLA) stash is worth $1.27 billion.
Much of the crypto industry anticipates rallying further in the coming years, in light of President Donald Trump’s desire to make the U.S. “the crypto capital of the word.” His “crypto taskforce” will share regulatory recommendations by July, paving the way for Congress to pass first-of-its-kind crypto legislation. Financial institutions would be green lit to buy, sell, and hold cryptocurrencies while complying with the law. Forecasting a golden era for crypto, firms are scrambling to market Bitcoin’s dazzling returns to Wall Street investors as the U.S. stock market dwarfs crypto markets in terms of liquidity.
