Trump Media has invested $2 billion in bitcoin - two-thirds of its funds

Trump Media Technology Group (TMTG), which owns the Truth Social platform, has announced a major $2bn bitcoin purchase - roughly two-thirds of its $3bn in liquid assets. This is one of the largest corporate Bitcoin purchases to date.

Here's What We Know

According to TMTG CEO Devin Nunes, this strategy will help provide financial independence, protection from pressure from banks and also support the future tokenisation of the Truth Social ecosystem. The deal makes the company the fifth largest public holder of bitcoin in the world, ahead of some investment funds.

Additionally, the company is setting aside another $300 million to buy options on bitcoin-related assets, with the option to convert to real Bitcoin in the future if the rate rises. All this is happening against the backdrop of a rising exchange rate: bitcoin recently passed the $120,000 mark, and so far investors are on the upside.

Market reaction

However, not everyone believed in success: immediately after the news, Trump Media shares first rose, but then fell sharply. Investors fear that betting on cryptocurrency may be too risky, especially for a company that is already heavily dependent on the popularity of the current U.S. president.

TMTG has raised cryptocurrency funding before: in May, the company raised $2.5bn from institutional investors, including through the sale of equity and debt instruments, to build a Bitcoin reserve and expand its fintech services.

This isn't the first major company to keep its savings in bitcoin. MicroStrategy and Tesla have previously switched to this strategy. But for a media company, the move is unexpected, to say the least.

Source: GlobeNewswire