Trump Media to revamp crypto treasury strategy after $238M Q2 loss

Trump Media said it plans to revamp its digital asset treasury strategy after unrealized losses on crypto and securities helped push the company to a $238 million net loss in the second quarter.

The company reported $190.4 millio n in unrealized losses across its digital assets, pledged digital assets and equity securities in its Q2 earnings release on Monday.

Trump Media said the new framework is intended to preserve its long-term digital asset exposure while managing volatility and improving the productivity of its balance sheet.

Trump Media is the publicly traded company behind Truth Social, Truth+ and financial services brand Truth.Fi. The company is tied to US President Donald Trump, who is the sole beneficiary of a trust that held about 41.1% of Trump Media’s voting power as of Feb. 25, according to its latest annual report.

Its Q2 filing shows the company is already using options to manage Bitcoin volatility and generate premium income, while deploying some BTC through lending and other yield-generating arrangements. 

The company also said it plans to direct more resources toward Truth Social, Truth+ and other parts of its media business as part of a broader shift in how it allocates capital.

Trump Media boosts Bitcoin holdings after Q2

Trump Media’s Bitcoin holdings were little changed during the second quarter before the company stepped up its direct Bitcoin exposure in July.

As of June 30, Trump Media held 9,477.16 Bitcoin, down from 9,542.16 BTC at the end of the previous quarter.

Separately, the company had pledged 2,077.34 BTC as collateral for its options strategy. Of its reported holdings, 4,260.73 BTC was serving as collateral for convertible notes. 

In July, the company sold Bitcoin-related securities worth $159.6 million and used the proceeds to purchase Bitcoin.

By July 31, Trump Media reported holding approximately 14,139 BTC, including pledged Bitcoin, worth about $890.5 million at the time.

Trump Media flags risks from Bitcoin yield strategy

Trump Media also warned that its efforts to earn additional income from its Bitcoin carry counterparty credit risk and the potential loss of its assets.

The company said it has deployed a portion of its Bitcoin holdings to third parties through lending, placement and other yield-generating arrangements, which it described as relatively new strategies.

Some of those counterparties may not be rated by major credit rating agencies and could default during market downturns, liquidity crises or other financial distress.

If an arrangement is unsecured, the company said it may be unable to recover its Bitcoin if a counterparty becomes insolvent. Trump Media is also limited in its ability to sell or pledge Bitcoin while it is deployed, while counterparties may use those assets at their discretion.