Follow MSTR? Reports say Trump Media Group plans to raise $3 billion for Crypto Assets.

Financing methods include the issuance of $2 billion in stock and the issuance of $1 billion in convertible bonds, or an official announcement may be made before the encryption conference this week.

Written by: Fang Jiayao

Source: Wall Street Journal

The Trump family is making a big bet on encryption.

On Monday, May 26, according to media reports, Trump Media Group (DJT) plans to raise $3 billion, and the funds raised will be used directly to purchase cryptocurrencies such as Bitcoin, operating in a manner similar to the US publicly traded company MSTR, which crazily buys coins through financing, turning itself into an "alternative cryptocurrency asset ETF." According to media disclosures, DJT's plan includes issuing $2 billion in new stock and $1 billion in convertible bonds.

Media reports citing informed sources revealed that the originally planned fundraising scale has expanded in recent weeks, as investor interest is very strong. However, the terms, timing, and amount of the financing are still subject to change. The announcement of the plan is expected to be made before this week's major encryption conference in Las Vegas. Donald Trump Jr., Eric, and "Trump's cryptocurrency czar" David Sachs, along with vice presidential candidate Vance, will all attend the conference.

DJT is controlled by the Trump family and is the parent company of the "Truth Social" App, directly related to Trump. In response to reports, the Trump Media Technology Group issued a statement saying that the journalist is ridiculously stupid and the sources are even more foolish. However, the company did not directly deny plans to raise funds to buy cryptocurrencies.

After the news, most cryptocurrencies rose, with Bitcoin once surging over 2% and hovering around $110,000. Ethereum and XRP once rose over 1%, while Solana and Dogecoin surged over 3%.

What does Trump plan to do?

Media reports indicate that DJT's latest issuance is being conducted at market price, with the stock price anchored at last Friday's closing price of $25.72 per share, giving the company a total market capitalization of approximately $6 billion. ClearStreet and BTIG are likely to act as underwriters for this round of issuance.

This is not the first time the Trump family has used their fame to make money, but DJT's approach this time is more like "MicroStrategy 2.0" (MicroStrategy is now called Strategy).

MSTR was originally a software company that financed itself through the issuance of bonds and stocks, purchasing tens of billions of dollars worth of Bitcoin in one go, with its market value jumping from obscurity to over 100 billion dollars, becoming a leading player in the encryption market.

Analysis indicates that DJT's timing is not coincidental. Bitcoin has just broken through its historical high of $109,000, and the Trump family is clearly taking advantage of the "bull market restart" by making a big entry through DJT, hoping to replicate the market value wealth myth like MSTR.

Moreover, DJT plans to launch a cryptocurrency-themed ETF, allowing ordinary investors to buy their selected cryptocurrency asset portfolio through brokerage platforms, creating a complete ecosystem of "crypto + stock market".

In fact, the Trump family has long been deeply intertwined with encryption assets. Including NFT trading cards, meme coins, stablecoins, and mining projects, the Trump family has made significant inroads into the crypto world. Last week, Trump hosted a banquet at his private resort for the investors of his memecoin, further strengthening the alliance with core users in the crypto space.

However, this series of actions has also raised concerns from the outside. The media pointed out that the president's family personally participated in buying coins, influencing regulation, and leading policy direction. Is there a suspicion of using policies for personal gain? Especially against the backdrop of his public statement to make the United States the "global encryption capital," the boundaries between politics and business are becoming increasingly blurred.

Political and Business Coin Three-Line Convergence

Media reports that after being re-elected president last year, Trump transferred his 53% stake in DJT (valued at about $3 billion) into a revocable trust, fully controlled by his son Donald Jr. for investment and voting rights. On the surface, there is a separation between politics and business, but in reality, the equity remains firmly in the family's hands.

At the same time, political and business capital is accelerating its entry into the encryption market. Brandon Lutnick, son of U.S. Secretary of Commerce Howard Lutnick, is leading a SPAC (Special Purpose Acquisition Company) in partnership with Tether and SoftBank to launch a Bitcoin investment platform called Twenty One Capital, valued at up to $3.6 billion.

The cryptocurrency company Ripple has acquired the digital currency brokerage firm Hidden Road for $1.25 billion, betting that institutional funds will flood into crypto assets during the "Trump era." Several industry executives have stated that a similar wave of mergers and acquisitions in the crypto space will erupt in the coming weeks, especially the combination of "shell companies + crypto projects."