American Bitcoin Corp Down 90%: Trump’s Crypto Businesses Are Bleeding

American Bitcoin Corp. (ABTC), the miner backed by the Trump family, significantly missed the mark this quarter, reporting a $59 million loss amid the industry’s deepest rout since 2022. While revenue grew, the company’s stock has plummeted roughly 90% from its September highs, trading just above $1.00 following the earnings release.

American Bitcoin Corp., which counts Eric Trump as a co-founder and chief strategy officer, took a bold path that set it apart from its competitors. While other major miners like MARA Holdings and Riot Platforms pivoted toward artificial intelligence infrastructure to diversify revenue, ABTC doubled down on a pure mining-and-hoarding strategy.

This strategy looked brilliant when Bitcoin was surging past $126,000. However, with Bitcoin retreating significantly to trade around $70,000, that conviction has become costly. The company recorded a staggering $227 million unrealized loss on the value of its Bitcoin reserves for the year.

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Mining Stocks vs. Holding BTC: The “Leverage” Trap

You might be wondering: If Bitcoin is down roughly 45% from its highs, why is this mining stock down 90%? This is one of the most important concepts to understand in crypto investing.

Mining companies tend to act like “Bitcoin on steroids.” In financial terms, this is called operational leverage. When you hold Bitcoin in your own wallet, you have no overhead costs. If the price drops 10%, your asset is worth 10% less. That is it.

But a mining company is a business with fixed bills. They have to pay for massive amounts of electricity, hardware maintenance, and debt servicing every single month, regardless of the Bitcoin price. When the price of Bitcoin crashes, their revenue shrinks, but their bills stay the same. This squeezes their profit margins instantly, causing the stock price to react much more violently than Bitcoin itself.

It works both ways, of course. We see this dynamic often in public markets, similar to how MicroStrategy (MSTR) shares often swing wildly compared to the actual Bitcoin they hold. Miners are high-risk, high-reward plays that assume the price will keep going up.

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Betting on the Trump Family: Why Political Ties Increase Risk

Investing in American Bitcoin isn’t just a bet on crypto prices; it is also a bet on the Trump brand. This adds a layer of complexity known as “headline risk.” Stocks tied to high-profile political figures often trade on sentiment rather than just fundamentals.

The broader portfolio of Trump-related crypto ventures is currently struggling. World Liberty Financial, a decentralized finance project, has seen its token plunge 65% since September. When a company’s identity is tied to a political brand, news cycles can impact the stock price as much as earnings reports do. If political sentiment shifts or regulatory scrutiny increases, these stocks can suffer even if the underlying business is stable.

This volatility is compounded by the fact that the broader mining industry is already facing headwinds. As mining difficulty adjustments fluctuate, only the most efficient operators survive.

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American Bitcoin Corp Down 90%: Is The Mining Sector at Risk? All Depends On Bitcoin

For investors watching the mining sector, the drop in ABTC is a signal to be cautious but attentive. The company’s “pure play” model means its recovery is entirely dependent on Bitcoin resuming its climb. If Bitcoin rallies, ABTC could see an explosive recovery due to that same leverage effect that crushed it on the way down.

However, the market is currently testing the resolve of miners. We have seen signs of miner capitulation recently, where miners are forced to sell their holdings just to keep the lights on. ABTC has pledged not to sell, but the market is clearly skeptical about how long that can last if prices drop further.

Watch the key support levels for Bitcoin carefully. Psychological lines in the sand, like the $60,000 level, are critical. If Bitcoin holds support and bounces, beaten-down miners like ABTC could offer significant upside. But if the price breaks lower, the operational leverage that hurts them now could get even worse.

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