The stock of American Bitcoin (ABTC), the mining firm co-founded by Eric and Donald Trump Jr., plummeted nearly 50% in the first hour of trading on the 2nd of December, hitting a low of $1.80 from its prior close of $3.58.
ABTC ultimately closed the day down 38.83% at $2.19, though it rebounded slightly – up 10.96% – in after-hours trading on 3rd December.
American Bitcoin crashes – but why?
This dramatic crash was triggered not by market rumors but by the expiration of a share lockup period, which released a massive supply of previously restricted stock onto the market.
These lockup agreements, which are standard following a company’s public listing after its merger with Gryphon Digital Mining, temporarily prevent insiders and pre-merger private placement shareholders from selling their shares.
However, the moment this restriction was lifted, it unleashed a massive supply of previously restricted stock onto the market.
This surge in available shares led to the stock’s dramatic decline, which saw it fall nearly 50% in the first hour of trading.
Eric Trump defends the selloff
Eric Trump confirmed this technical explanation on X, stating the selloff was expected due to the unlocking of pre-merger private placement shares.
Source: Eric Trump/X
Crucially, he reaffirmed his long-term commitment, noting he has no plans to sell his personal holdings, but the short-term supply shock was overwhelming.
The severity of the market reaction stands in stark contrast to American Bitcoin’s robust underlying financial and operational health.
Trump-backed firms’ Bitcoin holdings and more
The company reported impressive third-quarter results in October. Revenue reached $64.2 million, a significant increase from $11.6 million a year earlier. Additionally, the company made a positive turnaround in net income, achieving a profit of $3.5 million.
Beyond mining, the company has actively built its treasury. It is holding approximately 4,090 BTC as of mid-November, aligning with management’s stated goal to increase direct exposure to Bitcoin [BTC] while scaling production.
But the selloff also reflected the stock’s shaky history and the broader weakness in crypto equities.
American Bitcoin has been highly volatile since its Nasdaq debut. In fact, it surged to $9.31 in early September after a $170 million investment before entering a steady decline.
Even before the lockup expiry, the stock was losing momentum, and the latest drop pushed it nearly 76.5% below its peak.
Trump-backed American Bitcoin had also seen a surge
This followed American Bitcoin’s recent surge, fueled by Dominari Holdings’ sizeable investment and its merger-driven entry into public markets, capturing how aggressively the Trump family is expanding its footprint across the crypto ecosystem.
Beyond their stake in ABTC, the Trumps now control touchpoints across mining, stablecoins, memecoins, token launches, and even crypto ETF applications through World Liberty Financial [WLFI] and related ventures.
Final thoughts
- Despite strong revenue growth, rising profitability, and expanded mining capacity, ABTC couldn’t withstand the supply shock.
- Dominari’s investment and the Gryphon merger gave ABTC momentum, but they also exposed it to the pressures of public-market trading.
Source: https://ambcrypto.com/we-will-see-volatility-eric-trump-defends-american-bitcoins-40-crash/