Earlier statements by the company put combined bitcoin and related securities near $2 billion. The result: big paper gains when prices rose, and big mark-to-market losses when they fell.
The company also reported about $15.3 million in income from bitcoin-related option premiums during the quarter, but that was not enough to offset the revaluations that showed up in its books.
TRUMP MEDIA AND TECHNOLOGY GROUP HOLDS OVER $1 BILLION OF BITCOIN
The company framed the purchases as a move to diversify its treasury. Based on reports, the bitcoin position has become a dominant feature of the company’s balance sheet. That matters because this is not a giant, well-capitalized media group with steady cash flows.
Revenue for the period remained small compared with the bitcoin bet, which magnifies how much the crypto holdings move the company’s financial picture.
Investors and analysts have zeroed in on timing and entry prices. According to filings and market coverage, TMTG made large purchases over months, but exact buy dates and price points were not fully broken out, leaving room for debate about how much of the loss is unrealized and how much was realized. Some coverage linked part of the loss to changes in the market price of bitcoin between purchase and reporting dates.
Using bitcoin as collateral or for financing also adds layers of risk. Reports indicate the firm has used portions of its holdings in financing arrangements, which could force sales or additional write-downs if market conditions worsen. That kind of leverage was highlighted by market watchers as a key risk for a company whose core business is still quite small.
Featured image from David Hume Kennerly/Getty Images, chart from TradingView
