In the world of Bitcoin investment, what has been quite a hot topic recently is the case of American Bitcoin involving Mr. Eric Trump. According to Forbes, this company was promoted as a "money-making machine," but in reality, it was a arbitrage trading tool that cleverly exploited the investor psychology of MAGA supporters.

The mechanism was to attract investors with exaggerated advertising, leverage the Trump brand premium to inflate stock prices, and then cash out. Meanwhile, ordinary investors suffered significant losses. Since its IPO in September, the company has sold about 158 million shares to cash out approximately $351 million, and used that capital to purchase around $58M worth of Bitcoin.

There are also doubts about the calculation of mining costs. The publicly stated expense was about $58,000, but the actual total cost, including equipment depreciation, is around $90k. In other words, it exceeds the current Bitcoin price. Additionally, the company faces risks from equipment financing agreements; if Bitcoin prices do not recover, all mined Bitcoins could be used to cover equipment payments.

This company surprisingly has only two full-time employees. Its stock price has fallen 92% from its peak, with estimated investor losses reaching about $500 million. Meanwhile, Eric Trump’s personal assets have increased from approximately $300M to $28 million. This contrast tells the whole story.

Eric Trump responded on X (formerly Twitter), criticizing Forbes. He claims that American Bitcoin currently holds over 7,000 Bitcoins, making it the 16th largest publicly listed Bitcoin company in the world, with about 90k mining rigs and a hash rate of 28 EH/s. He emphasized that Bitcoin holdings on the Q4 balance sheet increased by 58%, that mining costs are 53% below market prices, and quarterly revenue reached $78.3 million, a 22% increase from the previous quarter.

However, behind this conflict lies a clear conflict of interest. The facts remain that investors are losing money while management’s assets are increasing. Market participants should learn a lesson from this case: develop the ability to discern the gap between brand value and reality, and always remain cautious of exaggerated advertising.