TLDR
- Trump Media raised $2.4 billion to buy bitcoin, planning to become one of the top corporate bitcoin holders in the US
- The company will use approximately $2.3 billion to purchase around 23,000 bitcoins for its treasury strategy
- Strategy (formerly MicroStrategy) owns over 580,000 bitcoins and has seen stock gains of nearly 3,000% in five years
- GameStop also announced purchasing 4,710 bitcoins worth over $500 million as part of this trend
- About 80 companies now hold bitcoin as treasury reserves, with 36 of them originally from non-crypto sectors
Trump Media and Technology Group announced it closed a private placement offering worth over $2.4 billion on May 30. The company plans to use approximately $2.3 billion of these funds to establish a bitcoin treasury and cover working capital needs.
The media company stated its strategy will make Trump Media one of the top bitcoin holders among publicly traded US firms. With Bitcoin trading around $100,000, the funds would allow Trump Media to acquire approximately 23,000 bitcoins.
Trump Media CEO Devin Nunes described bitcoin as “an apex instrument of financial freedom” in the company’s announcement. The move represents a major shift for the company, which operates Truth Social and Truth+ streaming service.
The strategy follows the playbook developed by Strategy, formerly known as MicroStrategy. Strategy has become the largest corporate holder of bitcoin with close to 581,000 bitcoins as of June 2.
Strategy’s Bitcoin Success Story
Strategy began its bitcoin accumulation strategy in August 2020 under CEO Michael Saylor’s leadership. Since then, the company has spent $40.7 billion to build its bitcoin position.
The results have been dramatic for Strategy shareholders. The company’s stock has climbed more than 2,900% since implementing its bitcoin strategy, far outpacing the S&P 500’s 76% gain over the same period.
Strategy uses a combination of debt and equity financing to fund its bitcoin purchases. This approach has transformed what was originally a business intelligence software company into a bitcoin investment vehicle.
Saylor has promoted this strategy at conferences, telling audiences that companies can achieve massive returns by buying bitcoin with borrowed money. He argues this approach offers smaller companies a path to compete with major tech giants in terms of shareholder returns.
Growing Corporate Bitcoin Adoption
The corporate bitcoin treasury trend has gained momentum across various industries. Since 2023, public companies have increased their bitcoin exposure by 160%, according to Bernstein analyst Gautam Chhugani.
Approximately 80 companies have now adopted the bitcoin standard by holding bitcoin as treasury reserves. These companies collectively hold roughly 3.4% of all bitcoins in circulation.
GameStop recently joined this trend by purchasing 4,710 bitcoins valued at over $500 million. The video game retailer’s announcement caused its stock to fall about 10% initially.
Of the 80 firms holding bitcoin reserves, at least 36 originated outside the cryptocurrency sector. These companies span industries from coal production and auto insurance to video gaming and online retail.
Several new companies are preparing to launch with bitcoin treasury strategies. Twenty One Capital has raised $685 million and plans to go public through a special purpose acquisition vehicle backed by SoftBank and Tether Holdings.
Nakamoto Holdings plans to launch in the third quarter and aims to convert 25 separate public companies into bitcoin treasury operations within a year. The company has raised $710 million through equity and short-term loans.
Trump Media currently trades at $21.88 per share with a market cap of $5 billion. The company reported an operating loss of more than $127 million on revenue of just $3.7 million in the trailing 12 months.
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