Last summer, Trump Media & Technology Group (NASDAQ: DJT) -- the social media company majority-owned by President Donald Trump -- made headlines when it announced plans to transform itself into a Bitcoin (CRYPTO: BTC) treasury company. Trump Media now holds 12,062 Bitcoins, worth nearly $755 million at today's prices, so it followed through on its promise. However, that Bitcoin position is currently deep under water.
Trump Media recently reported a $190 million paper loss on its crypto holdings, due largely to the fact that the price of Bitcoin has been in decline for more than 10 months now. As a result, Trump Media will pivot away from Bitcoin and back into its core business of media and advertising. This Rare Signal Is Flashing Again.
In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » Trump Media is hardly the only Bitcoin treasury company that's in trouble.
This year has seen a shakeout of the top digital asset treasury companies. The one that is on everyone's radar, of course, is Strategy (NASDAQ: MSTR). The company that famously told investors, "Never sell your Bitcoin," is doing just that, and that has the crypto market spooked.
In the past quarter, Strategy reported a nearly $10 billion paper loss on its Bitcoin holdings. The company acquired its 840,447 BTC at an average price of $75,482, but the current price of Bitcoin is just $63,000. You can't make money doing that.
The bigger problem is that selling can beget more selling, which can beget even more selling. That's the way markets work. Many crypto investors may be afraid to admit it, but if Strategy is ever forced to sell significant amounts of its Bitcoin at one time, it could trigger a historic market meltdown.
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