Trump Media to revamp crypto treasury strategy after $238M Q2 loss

Trump Media said it plans to adopt a more disciplined strategy for its crypto treasury while allocating additional resources to its core media operations.

Trump Media said it plans to overhaul its digital asset treasury strategy after unrealized losses on crypto holdings and securities contributed to a $238 million net loss in the second quarter.

The company reported $190.4 million in unrealized losses across its digital assets, pledged digital assets and equity securities in its Q2 earnings release on Monday.

Trump Media said the revised framework aims to maintain its long-term exposure to digital assets while controlling volatility and making its balance sheet more productive.

Trump Media is the publicly listed company behind Truth Social, Truth+ and financial services platform Truth.Fi. The firm is linked to US President Donald Trump, who is the sole beneficiary of a trust that controlled roughly 41.1% of Trump Media’s voting power as of Feb. 25, according to its latest annual report.

Its Q2 filing shows that the company is already using options to manage Bitcoin price volatility and earn premium income, while also deploying some BTC through lending and other yield-generating strategies.

The company also said it intends to allocate additional resources to Truth Social, Truth+ and other media operations as part of a broader change in its capital allocation strategy.

Trump Media increases Bitcoin holdings after Q2#

Trump Media’s Bitcoin holdings remained largely unchanged through the second quarter, before the company increased its direct exposure to Bitcoin in July.

As of June 30, Trump Media held 9,477.16 Bitcoin, a slight decrease from the 9,542.16 BTC reported at the end of the previous quarter.

Separately, the company had pledged 2,077.34 BTC as collateral for its options strategy, while 4,260.73 BTC of its reported holdings was being used to secure convertible notes.

In July, the company sold $159.6 million worth of Bitcoin-related securities and used the proceeds to increase its Bitcoin holdings.

By July 31, Trump Media reported holding approximately 14,139 BTC, including pledged Bitcoin, with the holdings valued at around $890.5 million at the time.

Trump Media warns of risks tied to Bitcoin yield strategy#

Trump Media also warned that its efforts to generate additional income from Bitcoin carry counterparty credit risks, along with the possibility that some assets could be lost.

The company said it has allocated part of its Bitcoin holdings to third parties through lending, placements and other yield-generating strategies, which it described as relatively new approaches.

Some of those counterparties may lack ratings from major credit agencies and could default during market downturns, liquidity crunches or other periods of financial stress.

If an arrangement is unsecured, the company said it could be unable to recover its Bitcoin if a counterparty becomes insolvent. Trump Media also has limited ability to sell or pledge Bitcoin while it is deployed, while counterparties may use those assets at their discretion.