Eric Trump’s American Bitcoin Corp faces 95% value drop amid AI sector growth

American Bitcoin Corp., a cryptocurrency mining firm co-founded by Eric Trump, has experienced a sharp decline in its market value, losing over 95% from its highest point as investors gravitate towards companies involved in artificial intelligence (AI) infrastructure rather than solely crypto mining, Bloomberg reports.

This plunge has erased more than $600 million from Eric Trump’s shareholding, prompting the company to implement a 1-for-15 reverse stock split to maintain its listing on Nasdaq.

Shift in Investor Preferences Impacts American Bitcoin Corp

Originally focused on mining and holding Bitcoin, American Bitcoin Corp. has seen diminishing investor interest as the cryptocurrency market entered a downturn and AI infrastructure gained prominence.

Investors now favor firms that leverage their computing resources not only for crypto mining but also for AI data centers. This shift in investor preference has hurt companies like American Bitcoin that remain concentrated on Bitcoin mining, with its stock recently hitting historic lows.

Competitors Expand Into AI Data Centers

In contrast, several U.S.-listed Bitcoin miners, including Riot Platforms Inc., Cipher Digital Inc., MARA Holdings Inc., and TeraWulf Inc., have announced initiatives to expand into AI-related data centers.

Their shares have collectively increased by over 60% this year, while American Bitcoin’s stock declined roughly 77%.

Analyst John Todaro of Needham & Co highlighted that all companies under his coverage are moving toward high-performance computing sectors.

Company Origins and Strategic Pivot

American Bitcoin’s origins trace back to February 2025, when American Data Centers Inc., launched by Dominari Holdings Inc. (an investment bank advised by Eric Trump and Donald Trump Jr.), aimed to develop AI data centers.

Eric Trump initially described the venture as essential for advancing AI infrastructure nationally. However, within a month, the company pivoted, signing an agreement with Hut 8 Corp. to acquire Bitcoin mining equipment and subsequently merged with Gryphon Digital Mining Inc., adopting the American Bitcoin name for its Nasdaq debut in September.

Limited AI Sector Growth Capacity

Unlike many competitors, American Bitcoin has limited capacity to grow within the AI sector because it mainly holds Bitcoin mining hardware and Bitcoin assets.

Its majority owner, Hut 8, manages key operations such as power supply, mining locations, hosting infrastructure, and daily mining activities through exclusive contracts.

Consequently, Hut 8 captures much of the AI opportunity, focusing on power infrastructure and multi-billion-dollar AI data center leasing agreements, with its stock more than doubling this year.

Focus on Bitcoin Production Explained

American Bitcoin maintains that concentrating on Bitcoin production will yield greater long-term value than shifting to AI.

The company believes that as competitors divert resources toward AI, fewer miners will challenge the Bitcoin network, potentially decreasing mining difficulty and boosting rewards for those steadfast in Bitcoin mining.

CEO Mike Ho noted a 6% decline in network difficulty in the recent quarter attributed to miners reallocating capacity toward AI.

Eric Trump has emphatically ruled out selling the company’s Bitcoin holdings, describing such a decision as requiring catastrophic circumstances.

Financial Situation and Bitcoin Holdings

Despite ongoing losses—including a first-quarter operating loss of $118.2 million and a $117.2 million writedown of its Bitcoin assets—American Bitcoin continues to increase its Bitcoin reserve, recently purchasing 500 additional bitcoins.

This contrasts with other firms, like Strategy Inc., which have started planning Bitcoin sales amid the bear market.

Broader Impact on Trump Family’s Cryptocurrency Investments

The volatility in American Bitcoin’s stock reflects broader fluctuations affecting the Trump family’s cryptocurrency investments.

President Donald Trump reportedly earned at least $1.4 billion related to crypto in his recent financial disclosures, although the wider retail investor base has suffered losses linked to Trump-associated crypto tokens and American Bitcoin shares.

Eric Trump reportedly owns about 6% of the company and serves as chief strategy officer, while Donald Trump Jr. acts as an adviser, though his stake is undisclosed.

Industry Perspectives on Future Outlook

Industry experts suggest that American Bitcoin’s future hinges largely on Bitcoin price recovery.

Benchmark Co. analyst Mark Palmer noted the company’s strengths in fleet efficiency and mining capacity but emphasized that a rising Bitcoin price is crucial for the business model to succeed.

Key Takeaways

  • American Bitcoin Corp. has lost over 95% of its market value amid a shift in investor focus from crypto mining to AI infrastructure.
  • The company implemented a 1-for-15 reverse stock split to maintain its Nasdaq listing.
  • Competitors expanding into AI-related data centers have seen significant stock gains this year.
  • American Bitcoin remains focused on Bitcoin mining, with limited capacity to grow in the AI sector.
  • Its future largely depends on Bitcoin price recovery and network dynamics.