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The US President's family firm, Trump Media & Technology Group, is venturing into the fund and crypto industry, further blurring the lines between private and public life.
Last week, the firm announced its intention to offer Truth.Fi-branded exchange-traded funds (ETFs) and separately managed accounts (SMAs) that are associated with Trump's agenda.
In the latest, Trump Media has decided to purchase Bitcoin for its treasury by selling around $1.5 billion in stock and $1 billion in convertible bonds. That is according to a Financial Times report on Tuesday.
There are concerns regarding Trump's potential conflict of interest stemming from his financial stakes and what is generated from his business initiatives due to his policies as President.
Trump Media Eyes Strategy's Model
That comes straight out of Michael Saylor's firm Strategy's business model.
Crypto rivals are always circling, and Wall Street is constantly devising new methods to ride the digital-currency boom, such as enhanced ETFs, tokenized funds, and structured products.
However, Saylor is the beneficiary, with his strategy on Bitcoin still yielding the highest profits.
During the height of retail speculation, Saylor's firm — now called Strategy — was known as MicroStrategy and was an early innovator in the capital markets hack. The game plan is to turn over debt and stocks to invest that money in Bitcoin. Then, use the market's wild ride and repeat the process. He continues to run his capital-market machine, which yielded enormous gains last year.
Currently, Strategy is one of the top-performing stocks in the Nasdaq 100, with a 26% increase in value compared to Bitcoin's 16% growth, despite using the OG crypto token as leverage for returns.
No ETF can compete with the premium that traders pay for Saylor's stock, which is significantly higher than the value of the company's Bitcoin assets.
Trump Media wants to use the same strategy to make inroads into the crypto sector.
Trump Media has become the latest of the many Trump-affiliated businesses to invest money in the digital assets industry. This comes after PSQ Holdings, where his son Donald Trump Jr. is a board member, on Tuesday revealed that it will investigate digital asset treasury strategies.
Critics Say 'Conflict', Trump Says 'I Don't Care'
Trump Media intends to market products and services related to the U.S. president's objectives.
Plans for a suite of financial goods under the Truth brand have been announced, and trademarks have been filed by the parent company of the Truth Social network, of which the president is also a prominent poster.
The "Fi banner" refers to the president's investments in energy, cryptocurrency, and American industry that may benefit from his policies. One of the solutions that has been offered is an ETF, which is essentially a portfolio of equities that can be bought through any broker.
Critics think it's unethical for a sitting US president to have a financial interest in the performance of funds linked to his name and political agenda, as these funds are built on techniques that he may influence from his office.
Although it is not mandated by law, previous US presidents have either divested themselves of assets or utilized blind trusts to sidestep any potential conflicts of interest.
On the other hand, Trump has kept his financial exposure through entities managed by his family.
Just before he retook office, he had his son, Donald Trump Jr., manage a trust that received around $4 billion worth of Trump Media shares.
Trump 2.0: President's Wealth Jumps
Trump's latest visit to the Middle East, earlier in May, has caused several critics to point out that the president walked away with deals not just for big tech and large US firms, but for his family businesses too.
Trump has many business interests in the region, which put him in a prime position to significantly boost his family's wealth.
The Trump family's cryptocurrency exchange, World Liberty Financial, is issuing USD1, a new token pegged to the US dollar. An Abu Dhabi-based investment firm has amassed USD1 holdings totalling $2 billion within the last 12 months.
A Trump golf course in Qatar is set to open soon, and there will be Trump-branded hotels in Dubai and Jeddah in the works as well.
The Trump Group, which is highly influential in the fields of real estate, entertainment, media, and cryptocurrencies, manages the operations of all these endeavors.
These commercial pursuits show a significant shift from a little over a year ago.
Despite having $413 million in the bank, Trump faced the prospect of a financial collapse last year. While Trump claims to the contrary, he was confronted with enormous sums of money that were required as court bonds for several cases in courts against the President.
A year since, his wealth had significantly increased, rising from $2.3 billion to over $5 billion, according to Forbes.
There was a general decline in Trump's wealth during his first term in the office. However, it is evident that his financial status is experiencing significant growth. Trump's rise in wealth can be largely attributed to his dual role as President and his active engagement in business ventures.
Crypto bets form a major part of his wealth surge. Trump and his family's wealth has grown significantly as a result of the President's pro-crypto policies.
But crypto traders couldn't care less and see this as an opportunity to build on the appeal of the asset class.
