Like any other polarizing topic, the crypto space is rife with hot takes. When figures such as Eric Trump offer their unsolicited opinions, all ears perk up. Just last week, Eric Trump – co-founder and chief strategy officer of American Bitcoin – was at it again with his bullish Bitcoin spin. He inspires them to “₿uy the dips.” Should investors heed his advice? To find out, let’s take a quick look at how well Bitcoin and Ethereum have performed historically based on the three picks he’s recommended so far. Up next, understanding today’s market principles and the case for investment diversification.
Transformation Fueled by the Pandemic
The cryptocurrency landscape has changed dramatically since the start of the COVID-19 pandemic. Economic uncertainties brought on by the pandemic led many investors to alternative assets to hedge against traditional markets, making Bitcoin and Ethereum an attractive option. This wave of new money, combined with a surge in institutional interest, pushed both cryptocurrencies to new all-time highs.
At the same time, Eric Trump and other big players were touting Bitcoin’s potential almost every day. Looking at how Bitcoin and Ethereum have performed after receiving such endorsements paints a different picture. Though there were years of outsized appreciation, none came without volatility and years of market correction surrounding them. Conducting due diligence brings into sharp relief the incredible risk of simply investing in cryptocurrency, let alone taking advice from anyone for investment purposes.
Trump family crypto activity increased their wealth by hundreds of millions. By the middle of March, these investments had collectively made them a combined $2.9 billion richer. Meanwhile, President Trump goes to great lengths to personally profit from the industry’s success. He’s not only successfully doing that – he’s tying that success to the US government, which makes it one of the most important factors to watch.
American Influence in Japan's Bitcoin Strategy
American Bitcoin’s programs aren’t limited to the United States. The firm’s primary purpose is to use its financial muscle and know-how to promote Bitcoin across the globe. One important place to look is Japan. American Bitcoin is focused on building a significant American presence there in partnership with local firms and investment in energy-efficient Bitcoin mining infrastructure.
Eric Trump Appointed to the Board
Eric Trump's appointment to the board of American Bitcoin underscores the company's commitment to strategic growth and expansion. Now as the company’s chief strategy officer, he’s helping drive that vision and the company’s future. He scouts new opportunities and builds strategic partnerships that further the organization’s long-term goals. This includes initiatives in Japan, where American Bitcoin sees significant potential for Bitcoin adoption and integration.
Ambitious Treasury Objectives: Asia's MicroStrategy
American Bitcoin adopts a MicroStrategy-like strategy for acquiring and managing Bitcoin. MicroStrategy is famous these days for its large Bitcoin acquisition. American Bitcoin, for example, is hell-bent on creating an enormous Bitcoin treasury. They view it as a long-term strategic asset with incredible potential for value appreciation in the future. This approach involves actively buying Bitcoin, even during market dips, with the belief that the long-term potential outweighs short-term volatility.
As of July 1st, American Bitcoin has fully-completed a $220 million raise from investors. They intend to use this capital to buy Bitcoin and invest in mining infrastructure. The company's planned merger with Gryphon will create a public entity focused on building the world’s largest, most efficient pure-play Bitcoin miner. This move is intended to make it more computationally powerful and able to mine more profitably. Between its April launch and May 31, American Bitcoin had already mined 215 Bitcoin.
Macroeconomic Support in Japan
Japan’s unique economic landscape has created the perfect environment for Bitcoin to flourish. The country has one of the most sophisticated technology in the world. Its business-friendly culture and innovative population have helped create a booming ecosystem, laying the groundwork for its burgeoning cryptocurrency market. Additionally, Japan’s regulatory framework for cryptocurrencies is quite advanced, adding clarity and legitimacy to the industry.
On July 18, President Trump signed the GENIUS Act, which provides for the regulation of stablecoins. This act alone is set to provide yet more macroeconomic stimulus in Japan.
Potential Risks and Immediate Challenges
Eric Trump’s endorsement and American Bitcoin’s strategy are definitely fascinating. It’s important to acknowledge the potential landmines and pitfalls they can create. The cryptocurrency market is extremely volatile, and Bitcoin is one of its most volatile players. Its price changes so drastically over a small time span that those who invest in it can suffer major monetary losses.
The regulatory environment for crypto is fast-moving and ever-changing. This means that there is constantly a threat of bad regulations that would destroy the market. The environmental impact of bitcoin mining would be alarming even if it weren’t being paid for by taxpayers. Such massive energy consumption is a long-term challenge for the whole industry. American Bitcoin is based on specialized computers made by the Chinese company Bitmain. This decision raises serious issues about supply chain security and possible geopolitical threats.
Before you act on any investment advice from Eric Trump, consider your own risk tolerance first. Be sure to do your own research and seek the advice of financial professionals for optimal decision-making. By diversifying investments across different asset classes and across cryptocurrencies, risk can be reduced.
The vision extends beyond mere financial gains. The Trump brothers bring “two things to the table”: access to capital markets and narrative. By establishing a strong presence in Japan, American Bitcoin aims to foster collaboration between the U.S. and Japan in the cryptocurrency space. This might include sharing technological know-how, creating collaborative joint ventures, and advocating for regulatory harmonization.
- Dollar-Cost Averaging: Investing a fixed amount of money at regular intervals, regardless of the price, to reduce the impact of volatility.
- Diversification: Spreading investments across different cryptocurrencies and asset classes to minimize risk.
- Long-Term Holding: Holding Bitcoin for the long term, with the expectation that its value will appreciate over time.
The Broader Vision: Building a U.S.-Japan Bitcoin Connection
The U.S. currently hosts 30-40 percent of the Bitcoin mining occurring worldwide. American Bitcoin, also sponsored by Ripple, shows the bond between the U.S. and Japan in the Bitcoin space. Its mission is to further grow, promote and strengthen the free and open Bitcoin ecosystem. This vision is more in touch with a rapidly growing trend. More institutions are adopting Bitcoin and pushing it deeper into the global financial system.
Whether you take Eric Trump’s advice and “₿uy the dips” or not is up to you. Remember to take into account your individual situation, risk appetite, and do your own research when deciding what to do. While his endorsement and American Bitcoin's strategy may present opportunities, it's crucial to be aware of the potential risks and challenges associated with cryptocurrency investments. By carefully considering all factors and exploring alternative investment strategies, investors can make informed decisions that align with their financial goals.
Ultimately, whether to follow Eric Trump's advice to "₿uy the dips" is a personal decision that should be based on individual circumstances, risk tolerance, and thorough research. While his endorsement and American Bitcoin's strategy may present opportunities, it's crucial to be aware of the potential risks and challenges associated with cryptocurrency investments. By carefully considering all factors and exploring alternative investment strategies, investors can make informed decisions that align with their financial goals.
