The crash of the American cryptocurrency mining company, American Bitcoin, on Tuesday, December 2, 2025, was immediate and devastating. At 9:31 a.m. on Wall Street, just one minute after markets opened, its shares recorded a 33% plunge. Five minutes later, losses had reached 42% and, briefly, exceeded 50%.
This fall was so spectacular that American Bitcoin quickly became a symbol not only of the collapse of the cryptocurrency market in late 2025, but also of the failure of the numerous Trump family business ventures in the world of digital currencies over the past year. Although broader crypto markets have been down over the past two months — about 25% for Bitcoin — projects associated with the Trump family have seen much steeper losses.
World Liberty Financial, founded by President Donald Trump and his sons, saw its WLFI token plummet 51% from its high in early September, a rate greater than that of Bitcoin and an index of smaller digital tokens. Alt5 Sigma, a company promoted by Trump's sons, has dropped about 75% as it faces increasing legal troubles. Furthermore, memecoins bearing the names of the President and his wife, Melania, have fallen about 90% and 99% respectively from their highs in January. American Bitcoin, founded by Eric Trump, has suffered a 75% drop after Tuesday's major crash.
The "Trump-Crypto premium" disappears
These movements have caused significant damage to the vast amounts of crypto wealth the US first family had accumulated earlier in 2025. But at the same time, they carry greater significance for the digital asset industry and the President's public image.
Trump's endorsement had helped boost many cryptocurrencies during the first months of his second term, turning the price of Bitcoin into a gauge of political success. But now, what looked like a Trump premium has suddenly turned into a Trump drag, hitting one of the central pillars supporting cryptocurrencies and offering a sign of how quickly trust can vanish in these uncertain markets — and perhaps in the President himself.
Hilary Allen, a law professor at American University’s Washington College of Law, stated: "The Trump presidency has been a double-edged sword for legitimacy. Trump started launching his own crypto projects, many of which lost value very quickly. If the goal was legitimization through the Trump family, that has not helped."
While the President has recently scaled back his public promotion of cryptocurrencies, Eric Trump took to social media on Tuesday, blaming American Bitcoin’s poor performance on the end of its stock lockup period, rather than a broader market weakness. "Our fundamentals are nearly insurmountable," he wrote in an X post. "I am 100% committed to industry leadership."
Breathing spells and market plunges
To be clear, dramatic moves in assets related to the Trump family are not new to an industry characterized by its volatility. Digital tokens have seen major drops before recovering. On Tuesday, while American Bitcoin struggled, the original cryptocurrency, Bitcoin, had one of its best days in recent weeks, increasing by about 6%.
However, earlier this year, it seemed that Trump’s support for the technology might be enough to lift digital tokens out of the endless boom-and-bust cycle and turn them into a more credible financial category. If nothing else, many crypto supporters believed that Trump had enough power to ensure the success of the projects he cared about most.
For a time, various cross-promotions seemed to work. People who wanted to express support for the President bought the Trump tokens, raising their value. Gryphon Digital stock soared 173% when the merger with Eric Trump's American Bitcoin was announced in May. On the first day of trading after the merger in September, American Bitcoin shares rose by 16%.
These projects were also boosted by political and regulatory changes promoted by Trump, most notably through legislation intended to bring stablecoins, cryptocurrencies pegged to the value of the dollar, to the forefront.
However, signs of trouble have accumulated over time. The memecoins launched just before Trump's inauguration, with heavy promotion from him, have steadily lost ground, with few moments of relief, such as the rise in April, when the President offered to dine with some of the currency's largest holders.
Joel Li, CEO of an online marketplace for electric vehicles, bought the memecoin to enter the dinner but sold it shortly after. "People started to realize that this wasn't exactly what they thought," Li said.
Michael Terpin, a long-time crypto investor, noted that the tariff moves were a chilling reminder: "The Trump gives and the Trump takes away."
The loss of profits
However, the problems have surpassed the peculiarities of the broader markets. American Bitcoin was forced to address a report that the mining machines it uses, from a Chinese manufacturer, are being investigated as a national security risk for the US. Meanwhile, Alt5 Sigma, a public company intended to acquire one of the tokens issued by World Liberty Financial, faced an executive flight after the announcement that one of its subsidiaries is subject to a criminal investigation in Rwanda.
The drop since October has wiped out over $1 billion of the wealth the Trump family had accumulated through their crypto ventures and other businesses. However, they still retain significant gains, according to the Bloomberg Billionaires Index. Small investors who bought assets when they were at peak levels are recording the most painful losses.
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