Eric Trump’s bitcoin mining firm, American Bitcoin, is merging with Gryphon Digital Mining to go public, amplifying the Trump family’s interests in cryptocurrency, which also includes backing a crypto exchange and launching a meme coin. The mining process, essential to bitcoin’s distribution, is energy-intensive and controversial, drawing criticism amidst rising scrutiny over potential conflicts of interest in the family’s crypto investments.
A bitcoin mining company associated with Eric Trump is set to go public this year, marking a significant step in the Trump family’s growing interest in cryptocurrencies. The company, known as American Bitcoin, is merging with Gryphon Digital Mining, a publicly traded entity, in an all-stock deal that could see them listed on the Nasdaq. This merger is expected to be finalised by the third quarter of 2023.
Eric Trump serves as co-founder of American Bitcoin, which has connections to a firm backed by his brother, Donald Trump Jr. The company aims to mine bitcoin at rates lower than current market costs and establish a solid reserve of the cryptocurrency. “Our vision for American Bitcoin is to create the most investable Bitcoin accumulation platform in the market,” Eric Trump proclaimed in a statement.
Launched in March, American Bitcoin is primarily owned by Hut 8, a major player in the crypto mining sector. This firm strives to become the top-tier, most efficient bitcoin mining operation globally. The company is recognised as the successor to American Data Centers, which was previously backed by the two Trump brothers and Dominari Holdings, a public firm.
Interestingly, the pursuit of bitcoin mining has the approval of former President Donald Trump, who last year made it clear he wants the U.S. to become a leading country for bitcoin mining.
For those unfamiliar, bitcoin mining plays a crucial role in the cryptocurrency’s infrastructure. Instead of being managed by a central authority, bitcoin operates through independent miners. These individuals solve complex mathematical problems to confirm bitcoin transactions and record them on an extensive public ledger called a blockchain. Successful miners receive units of bitcoin in return for their efforts.
Currently, the value of bitcoin hovers around $102,000, but the incentives for mining tighten over time because the number of bitcoins increases. However, mining is not without its challenges. It’s a notoriously energy-hungry process that requires massive data centres packed with servers. According to research from Cambridge University, bitcoin mining consumes an astonishing 187.9 terawatt-hours of electricity annually, surpassing the total energy usage of Egypt.
The Trump family’s involvement in cryptocurrency continues to expand. They are also backing World Liberty Financial, a crypto exchange that recently received substantial funding from an Abu Dhabi firm. Additionally, in January, former President Trump introduced a volatile cryptocurrency known as a meme coin, labelled $TRUMP. Reports suggest that crypto investments contribute approximately $2.9 billion to the Trump family’s overall net worth.
This push into the crypto sector has raised eyebrows, particularly regarding potential conflicts of interest. Recently, Senate Democrats stalled a cryptocurrency regulation bill, advocating for restrictions on elected officials in crypto ventures. Recently, Senator Elizabeth Warren has accused Donald Trump of engaging in what she calls “crypto corruption”.
Despite the scrutiny, the White House has defended the Trump family’s actions. A spokesperson clarified that Donald Trump’s financial interests are held in a trust managed independently by his children, claiming there are no conflicts of interest here.
