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American Bitcoin, associated with the Trump family, reports a $59 million loss in the fourth quarter as bitcoin values decline.
The bitcoin mining firm currently possesses over 6,000 BTC, with approximately one-third sourced from mining and two-thirds obtained via open-market transactions and strategic actions.
(Anne Nygård/Unsplash/Modified by CoinDesk)
What to know:
- American Bitcoin reported a fourth-quarter deficit of $59 million due to the declining price of bitcoin diminishing the value of its assets.
- The company now possesses over 6,000 BTC, with about one-third obtained through mining and two-thirds via market purchases and strategic initiatives.
- For the year, the firm generated $185.2 million in revenue and raised $150.5 million through a stock offering in the fourth quarter to support bitcoin acquisitions.
American Bitcoin (ABTC), the bitcoin mining organization supported by President Donald Trump’s family, indicated a loss of $59 million in the fourth quarter as the significant decline in the price of the foremost cryptocurrency affected its asset value.
The firm, which became publicly traded in September, shortly before the largest cryptocurrency reached an all-time high, is implementing a dual approach of mining and acquisitions, with approximately one-third of its BTC derived from mining efforts. The remainder is sourced from market purchases and strategic actions, primarily financed through stock sales.
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With Eric Trump and Donald Trump Jr. owning 20% of the company, it raised $150.5 million via an at-the-market stock offering during the quarter. This funding enabled the firm to increase its bitcoin exposure per share by nearly 50%. It has confirmed that it now holds more than 6,000 BTC.
During the quarter, bitcoin was mined at a 53% gross margin, indicating that production expenses were significantly lower than market prices, despite the cryptocurrency’s price decline. Revenue increased by 22% compared to the third quarter.
New guidelines from the Financial Accounting Standards Board (FASB) mandate that companies must evaluate cryptocurrency holdings at market value. Bitcoin’s price dropped 23% during this timeframe, compelling American Bitcoin to report a non-cash loss of $227 million.
The company’s shares have risen 3.8% in pre-market trading to $1.09. However, they are down nearly 90% from their peak of about $9 observed last year.
The primary owner of the company, Hut 8 (HUT), announced fourth-quarter earnings on Wednesday, resulting in a 7% decrease in shares, even as competitors like MARA Holdings (MARA) and Riot Platforms (RIOT) saw gains.
Hut 8 disclosed that it concluded the year with an 8,500 MW development pipeline. Additionally, it secured a new $200 million revolving credit facility with Two Prime and expanded its Coinbase facility to $200 million, raising its total credit capacity to $400 million.
