Trump Sons-Linked Cryptocurrency Firm Loses 51% Value in 26 Minutes

The shares of American Bitcoin Corp, a cryptocurrency mining company, co-founded by the US President Donald Trump's sons, faced a large setback, falling 51 per cent in just 26 minutes, wiping out millions of dollars in market value, a Bloomberg report said.

The shares that had been trading actively, witnessed a flash crash due to panic selling. In 26 minutes the stocks' price more than halved, sending shock waves among the investor community triggering more panic in the market.

Impact on investors

For investors, the 51 per cent wipeout meant that if someone held 1,000 dollars' worth of the shares before the crash, its value dropped to just 490 dollars within minutes. Losses of this scale are rare in traditional markets but more common in cryptocurrencies, which are known for extreme volatility, the report said.

Volatility means prices can rise or fall sharply in a short time. While this can create opportunities for profit, it also exposes investors to sudden and severe losses.

Trump Backed Crypto Ventures Face Setback

Unlike established cryptocurrencies such as Bitcoin, which fell about 25 percent in recent months, Trump linked ventures had dropped much more sharply.

WLFI token of World Liberty Financial, co-founded by President Donald Trump and his sons crashed 51% in September while Alt5 Sigma, promoted by Trump's sons, plunged 75 percent and Trump branded meme coins tied to Donald and Melania lost 90 to 99 percent of their value. As American Bitcoin's business depends heavily on confidence in these ventures, its shares were especially exposed to panic selling.

Experts had earlier raised concern about WLFI's stability, citing its personality-driven sentiment rather than financial fundamentals, unlike established digital currencies such as Bitcoin and Ethereum.

Wider financial trouble

The Trump family's cryptocurrency project had already been facing difficulties. Regulatory scrutiny, scepticism from financial analysts, and competition from other digital assets had weakened its position.

Bitcoin Reverses

Bitcoin, the largest cryptocurrency in the world, has revived its position back to $90,000 after a sharp fall, which facilitated good entry for investors with fair valuation. Bitcoin surged by 6.8%, reaching 92,323 dollars, while Ether jumped over 8% to 3000 dollars, and smaller cryptocurrencies like Cardano, Solana, and Chainlink rose more than 10%.

Bloomberg attributes the rise to Securities and Exchange Commission Chairman Paul Atkins' announcement to grant digital asset companies an "innovation exemption" and Vanguard Group's decision to allow ETFs and mutual funds that mostly hold cryptocurrencies to be traded on its platform.

According to Jasper De Maere, a desk strategist at Wintermute, a mix of industry-related news and easing of geopolitical tensions are the reasons behind the surge.