Trump-Linked Firm Reports Profit: Mining Cost Cuts Drive Ga…

American Bitcoin reported a $3.5 million net profit in the third quarter of 2024, reversing prior losses. Revenue for the September quarter increased to $64.2 million from $11.6 million in the same period last year, according to a company earnings report released Friday. Increased mining efficiency and reduced operational costs have bolstered the company’s position. Gross profit margins also rose from 49% to 56%, indicating continued operational efficiency. This occurred despite a recent cooling in cryptocurrency prices, with Bitcoin declining by 2.6% on Friday.

The company’s momentum has accelerated amid investor expectations of looser regulations following Donald Trump’s potential return to the presidency. Eric Trump serves as founding partner and chief strategy officer, while Donald Trump Jr. is a shareholder. Eric Trump stated the company has added over 3,000 Bitcoin to its reserves since its Nasdaq listing. As of November 4th, the company holds 4,004 Bitcoin, valued at approximately $400 million.

American Bitcoin represents a new venture in a series of Trump family-linked cryptocurrency initiatives, which also include a meme coin project and World Liberty Financial, partially owned by Donald Trump. Company CEO Mike Ho emphasized that lower mining costs provide a key advantage, noting they operate at “half the cost” compared to companies purchasing Bitcoin from the market. American Bitcoin continues to produce Bitcoin through its own infrastructure.

Eric Trump addressed potential U.S.-China trade tensions should his father return to office, stating a potential 100% import tax would not affect the company. While sourcing mining equipment from China, the company benefits from decreased energy prices.

Other companies in the sector are also highlighting cost advantages, such as Marathon Digital, which recently announced renewed energy supply agreements to reduce the total cost per mining.

Despite a brief market rally following the earnings report, American Bitcoin shares declined by 1.3% as Bitcoin’s price dropped. Companies holding crypto assets often see share fluctuations linked to token values, though American Bitcoin continues to grow its reserves.

The Trump administration has repeatedly expressed intent to lead in global cryptocurrency and reduce regulatory burdens. However, the Trump family’s increasing influence raises conflict-of-interest concerns, prompting ethics experts to caution against policy makers’ involvement with family businesses.

In conclusion, American Bitcoin’s shift from loss to profit within a year underscores the critical role of cost management, energy prices, and the political climate in cryptocurrency mining. While the company faces both political and economic uncertainties, it has strengthened its position by increasing reserves, but the debate surrounding family ties remains a key consideration.

Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility.