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BTC Trump Media said it plans to adjust its digital asset financial strategy. Previously, unrealized losses on cryptocurrencies and securities led to the company's second-quarter net loss of $238 million.
The company disclosed in its second-quarter earnings report released on Monday that unrealized losses on its digital assets, pledged digital assets and equity securities totaled US$190.4 million. Trump Media said the new framework aims to maintain long-term exposure to digital assets while managing volatility and improving balance sheet productivity.
Trump Media is a publicly traded company that owns Truth Social, Truth+ and the financial services brand Truth. Fi. The company is linked to US President Donald Trump. According to its latest annual report, as of February 25, Trump was the sole beneficiary of the trust that holds approximately 41.1% of the voting rights of Trump Media.
Its second-quarter documents show that the company has begun using options tools to manage Bitcoin volatility and earn equity income, while deploying some Bitcoin through loans and other income-based arrangements. The company also said it plans to invest more resources into Truth Social, Truth+ and other media business segments as part of a capital allocation strategy adjustment.
Trump Media increases its holdings in Bitcoin after the second quarter
Trump Media's Bitcoin position changed little during the second quarter, and subsequently increased its direct Bitcoin exposure in July. As of June 30, the company held 9,477.16 bitcoins, a decrease from 9,542.16 at the end of the previous quarter. In addition, the company has pledged 2,077.34 bitcoins as collateral for its options strategy. Of its reported positions, 4,260.73 bitcoins were used as collateral for convertible bonds.
In July, the company sold $159.6 million worth of bitcoin-related securities and used the proceeds to purchase bitcoin. As of July 31, Trump Media reported holding approximately 14139 bitcoins (including pledged portions), valued at approximately $890.5 million at the time.
Trump Media warns of Bitcoin earnings strategy risks
Trump Media also warned that its efforts to earn additional profits through Bitcoin positions face counterparty credit risk and potential loss of assets. The company said it had deployed some of its Bitcoin positions to third parties through loans, placements and other income-based arrangements, and said these were relatively new strategies. Some counterparties may not be rated by major credit rating agencies and may default in times of market downturns, liquidity crises or other financial difficulties. The company said that if the arrangement is unsecured, it may not be able to recover Bitcoin once the counterparty becomes insolvent. In addition, during the deployment of bitcoins, TrumpMedia's ability to sell or pledge these bitcoins was limited, while counterparties could use these assets at their discretion.
