What is American Bitcoin, the Trump family-backed crypto mining firm going public? | Technology News

The merged entity will trade under the symbol ‘ABTC’. The US president’s two eldest sons will own about 98 per cent of the new entity along with existing shareholders of American Bitcoin. The other 2 per cent will belong to existing shareholders of Gryphon. Eric Trump is also listed as a co-founder and member of the  management team at American Bitcoin.

Taking American Bitcoin public is the latest move by the Trump family to expand its growing crypto empire. Experts have warned that these crypto ventures could lead to overt conflicts of interest within the Trump administration.

For instance, American Bitcoin could become a vehicle for investors looking to curry favour from President Trump. However, the company has said that existing shareholders of American Bitcoin will own a majority stake. Trump is also facing backlash for planning to accept a $400 million luxury jumbo jet as a gift from Qatar’s ruling family to be used as the official US presidential plane, Air Force One.

Meanwhile, the American Bitcoin announcement did not elicit much of a reaction in the crypto market as bitcoin continued to trade flat at around $104,000, according to CoinMarketCap.

What is American Bitcoin? Who is behind it?

In February this year, investment firm Dominari Holdings announced the creation of a new venture called American Data Centers to develop computing infrastructure for the AI industry. Both Eric Trump and Donald Trump Jr are investors of American Data Centers, while Eric Trump is a member of the advisory board of Dominari Holdings.

Then, the two Trumps partnered with an energy infrastructure company called Hut 8 to establish a new venture called American Bitcoin, with the more immediate objective of creating a large stockpile of cryptocurrency by mining bitcoins.

“Every single sophisticated country is using their excess power to mine bitcoin […] We won the space race. We better win the crypto race,” Eric Trump was quoted as saying by CNBC. 

“From the start, we’ve backed our conviction in Bitcoin, personally and through our businesses. But simply buying Bitcoin is only half the story. Mining it on favorable economics opens an even bigger opportunity,” Donald Trump Jr was quoted as saying by The New York Times.

The terms of the deal dictated that Hut 8 would control 80 per cent of American Bitcoin while the 20 per cent stake would belong to Trump-backed American Data Centers. The initial announcement also named Eric Trump as a co-founder of American Bitcoin and said he would serve as the chief strategy officer of the new crypto mining venture.

Gryphon Digital Mining is now acquiring American Bitcoin via a reverse triangular merger in a 100 per cent stock-for-stock transaction, according to an investor presentation posted on its website. Gryphon is a US-based venture that aims to establish a presence in bitcoin mining as well as AI by investing in data centres and low-cost energy assets, as per its website.

The proposed merger with Gryphon carves out American Bitcoin from Hut 8′s broader energy and AI infrastructure platform in order to separate the bitcoin mining operations and potentially unlock new capital.

“The Gryphon team is pleased to offer our stockholders the opportunity to participate in what we believe will be the next era of public Bitcoin mining through this combination. American Bitcoin brings together an outstanding leadership team and a clear strategy to build a premier institution in this fast-evolving industry,” Steve Gutterman, Chief Executive Officer of Gryphon, said.

“Taking American Bitcoin public is a critical step toward scaling the business at the pace and magnitude we envision. Time-to-market was a critical factor, and this transaction enables an efficient path to public markets by combining with an entity that is structurally aligned with American Bitcoin’s mining-focused launch strategy,” Asher Genoot, CEO of Hut, said.

What exactly is bitcoin mining?

While fiat currency is printed by a central bank, new bitcoins are generated by verifying transactions on the blockchain. This process is known as bitcoin mining. It is a branch of the crypto industry and requires large amounts of energy that are consumed by mining machines to process bitcoin transactions.

Bitcoin mining is also one of the most criticised features of the crypto industry as it is energy-intensive. In the early days of cryptocurrency, bitcoin transactions could be processed and verified by anyone capable of running a computer programme. In return, they earned new bitcoins as a reward.

However, when there was a boom in the crypto industry, the amount of computing power required for mining bitcoins also surged. Today, the process of mining bitcoins is carried out by publicly traded companies like Hut 8 which owns several data centres packed with servers.

These operations are considered to be harmful for the environment as each bitcoin transaction is said to generate carbon emissions equivalent to driving a gasoline-powered car between 1,600 and 2,600 kilometres, according to a report by the London School of Economics. Bitcoin mining farms have also been linked to an increase in noise pollution.

What are the Trump family’s other crypto ventures?

During his presidential campaign, Donald Trump and his sons launched a crypto company called World Liberty Financial that offers two types of digital currencies. It has launched so-called governance tokens with the symbol WLFI.

Governance tokens cannot be traded. Instead, they give token holders the right to vote on changes to the project’s underlying code and to signal their opinion on its direction and plans. The largest holder of WLFI is Abu Dhabi-based crypto firm DWF which bought $25 million worth of the tokens issued by the Trump family-controlled venture, according to a report by Reuters.

World Liberty Financial also unveiled its own stablecoin last week. Besides this, President Trump and First Lady Melania Trump launched their own sets of memecoins on the eve of the presidential swearing-in ceremony in January this year.

More recently, Trump announced that top holders of the $TRUMP memecoin would have the opportunity to attend a private dinner with him.