I witnessed a new money-making scheme by the Trump family. It was presented as a Bitcoin mining company, but in reality, it was a game to extract funds from investors by exploiting the surge in stock prices.

Eric Trump launched "American Bitcoin," which was promoted as a "money tree" where Bitcoin could be mined at half the market price. When it went public in September 2025, investors eagerly jumped in. But a closer look at the books revealed a completely different story.

In fact, about 70% of the Bitcoin held by this company was not mined but purchased through stock sales. In other words, they were buying Bitcoin with funds collected from investors. The true mining cost was around $92,000 per coin, but Mr. Eric emphasized a low figure of $57,000 to $58,000. Including depreciation, equipment costs, and marketing expenses, a significant rise in Bitcoin prices was an absolute requirement to turn a profit.

What’s even more clever is the capital structure. When purchasing equipment worth about $330 million, the company used Bitcoin as collateral and deferred cash payments. If Bitcoin prices fell, they would have to repay using the collateral Bitcoin. This meant all mined Bitcoin could potentially be used to pay for equipment, leaving no assets left.

The post-IPO strategy was blatantly obvious. They sold a large amount of their own stock during a period when the share price was abnormally high, then used that capital to buy Bitcoin en masse. Subsequently, the stock price plummeted by 92%. The cumulative losses for retail investors are estimated at $500 million.

Meanwhile, Eric’s personal assets increased by about $90 million. The Trump family, including Ivanka, applied the same "showy" techniques they used in the hotel business to the cryptocurrency market. They boosted stock prices through branding and exaggerated advertising, which exceeded actual mining capacity, while insiders quietly exited. It’s the same method they used during their old golf course acquisitions.

Interestingly, Eric claimed he entered decentralized finance because he was "blacklisted by banks." But investigations show that JPMorgan Chase, after closing some accounts, still agreed to refinance large loans. So, the bank exclusion was just an excuse; the real reason was likely that they found a simple opportunity to make money.

Amid the meme stock boom that the market calls "MAGA frenzy," just the Trump name caused a flood of "foolish funds" to flow in. It was a manipulated arbitrage game designed to anticipate this influx. The race was to see how much capital could be drained before the stock prices returned to sanity.

Currently, Bitcoin prices have fallen 31% from the initial levels. The economics of mining are becoming increasingly difficult. Some estimates suggest Eric’s company needs Bitcoin prices to rise by 35% to survive. Alternatively, they might seek funding from foreign government-backed funds. There are reports that investors related to the UAE are already moving.

This incident highlights how intertwined the cryptocurrency market is with political influence and how easily individual investors can be exploited. The promise of a "money tree" is always just a scheme to enrich someone’s hands.