Trump Media & Technology Group has announced plans to create a Bitcoin treasury valued at $2.5 billion, leading to significant stock market fluctuations.
Announcement of Bitcoin Treasury
The company plans to raise $1.5 billion through common stock and $1 billion through zero-interest convertible senior secured notes. The deal is expected to close by May 29, 2025. This initiative aims to build a large Bitcoin treasury, with CEO Devin Nunes stating, 'We view Bitcoin as an apex instrument of financial freedom.'
DJT Stock Reaction
After the announcement of the Bitcoin treasury, Trump Media's stock (DJT) initially rose more than 10% in premarket trading but subsequently fell to $23.39. The stock has decreased over 26% since the beginning of the year. As of the end of Q1 2025, the company had $759 million in cash and short-term investments, with Bitcoin to be added to its balance sheet.
Criticism from Peter Schiff
Peter Schiff, a well-known Bitcoin critic, has criticized the company's plans, suggesting that the market is tired of companies building treasuries. Schiff also questioned how the company could create a Bitcoin reserve using investor funds while Trump had already bought Bitcoin privately. He remarked, 'How can Trump's company front-run the strategic Bitcoin reserve, using taxpayers’ dollars to pump up what he bought first?' This criticism adds fuel to the debate surrounding the company's Bitcoin strategy.
Trump Media's announcement of a Bitcoin treasury has led to significant fluctuations in the company's stock and garnered attention from both supporters and critics. The company's future actions will be closely monitored amid ongoing market volatility.
