Hut 8, a publicly traded Bitcoin mining company, announced Monday morning that it was partnering with President Donald Trump’s sons, Eric Trump and Donald Trump Jr., to launch a new Bitcoin mining subsidiary called American Bitcoin. The public company, whose market capitalization is about $1.2 billion, will contribute “substantially all” of its Bitcoin ASICs, or specially designed computer chips, to the subsidiary in exchange for 80% of the company’s stock, according to the press release.
Hut 8’s stock soared in pre-market trading after the announcement before dropping back to $11.69, its price when markets closed on Friday.
The Bitcoin miner did not specify whether the Trump family would own the other 20%. “Simply buying Bitcoin is only half the story,” Trump Jr. said in a statement. “Mining it on favorable economics opens an even bigger opportunity.”
The business of Bitcoin mining entails using high powered computers to compete with others to solve a math problem. The first miner to discover the correct solution earns a reward in the form of Bitcoin and, in doing so, processes transactions and updates the blockchain. A new block is added to the chain every ten minutes or so.
American Bitcoin’s eventual goal is to “become a publicly listed company,” according to a presentation about the new venture filed with the Securities and Exchange Commission.
Eric Trump is American Bitcoin’s cofounder and chief strategy officer. Matt Prusak, the former chief commercial officer of Hut 8, is the company’s CEO. Justin Mateen, the cofounder of the dating app Tinder, is a board member, along with two other Hut 8 executives.
The Trump organization has built an empire out of loaning the Trump name—without running the actual business—to real estate developments, porterhouse steaks, sneakers, and a whole host of other ventures. Similarly, Hut 8, not the Trumps, will manage all of American Bitcoin’s “core business functions,” including human resources, finance, compliance, and the operation of the Bitcoin miners, according to the presentation.
The new Bitcoin mining firm is the latest crypto venture from the Trumps. President Trump has launched his own NFT collections, and he and his wife Melania have released their own memecoins. Meanwhile, his sons have lent their name to a new crypto app called World Liberty Financial, which recently announced that it was developing its own stablecoin, or a cryptocurrency pegged to fiat currencies like the U.S. dollar, called USD1.
The Trump family’s interest in crypto is a recent phenomenon. In 2021, Trump called Bitcoin a “scam against the dollar.” But, three years later, he did an about-face as he courted crypto executives with deep pockets. In July, he spoke at Bitcoin 2024, one of the largest Bitcoin conferences in the world, and called for the U.S. to become the “crypto capital of the planet.”
Shortly afterwards, Tyler and Cameron Winklevoss, the cofounders of the crypto exchange Gemini, donated $1 million a piece to Trump’s reelection campaign. Jesse Powell, the founder and chairman of the crypto exchange Kraken, also donated $1 million to Trump. And after his reelection, the 47th president has issued a series of crypto-related executive orders, including one that seeks to establish a strategic Bitcoin and digital assets reserve.
On Tuesday, Hut 8 will host a conference call to discuss the launch of its new Bitcoin subsidiary.
This story was originally featured on Fortune.com
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