Eric Trump and Donald Trump Jr. have backed a new company, American Bitcoin Corporation, which used to be called American Data Centres. American Bitcoin recently acquired ASIC miners from the company Hut 8. American Bitcoin will focus on the mining side of the business, while Hut 8 will focus on the management and operations side of the business. American Bitcoin will also invest in a Bitcoin treasury. Hut 8 will retain an 80% stake in American Bitcoin. Hut 8, a publicly traded company, contributed around 61,000 mining machines to the new venture. There was no need for cash transfers between Hut 8 and American Bitcoin. Hut 8, as part of its role in organizing operations, will host physical locations for the crypto mining venture, owning 11 sites across America. At the same time, American Bitcoin will operate the mining rigs. The low energy costs and scalable locations will enable American Bitcoin to focus solely on its business model. The board of directors will include Justin Mateen, co-founder of Tinder, and Michael Broukhim, co-founder of FabFitFun. Eric Trump believes that the business will succeed because it will have the advantage of lower energy costs. “By combining Hut 8’s proven operational excellence”, said Eric Trump, “in data centers with our shared passion for Bitcoin and decentralized finance, we are poised to strengthen our foundation and drive significant future growth”. American Bitcoin, a subsidiary of Hut 8, will be a majority-owned single-focus business conducting large-scale Bitcoin operations, including mining and treasury strategies. The subsidiary aims to become the world’s largest and most efficient Bitcoin mining company. American Bitcoin aims to achieve 50 ETH/s and an efficiency of 15 J/TH. The business believes it will be successful because it combines the ASIC miners of Hut 8 with the Trump brothers’ investments, connections, and influence. Eric Trump will be the Chief Strategy Officer of American Bitcoin. Hut 8 will organize long-term agreements and handle the financial side of the business. American Bitcoin plans to become a publicly listed company in the future. “The launch of American Bitcoin”, said Asher Genoot, Hut 8 CEO, “marks a pivotal evolution in our platform strategy. By carving out our mining business into a standalone entity, which will raise its capital, we align each business segment with its respective cost of capital. The transaction creates two focused yet complementary businesses, each purpose-built for its mandate. It evolves Hut 8 toward more predictable, financeable, lower-cost-of-capital segments. It establishes American Bitcoin as a pure-play mining platform built for hash growth, Bitcoin production, and operating leverage”. American Bitcoin can be described as a joint venture between the Trump family and Hut 8. It aims to become the most efficient ‘pure play’ Bitcoin miner in the world. Eric Trump has experience with commercial markets, while Hut 8 specialises in operations, making the partnership a promising combination for the American crypto market. Meanwhile, Mara Holdings, Hut 8’s competitor, announced a $2 billion stock offering as part of its strategy for developing a Bitcoin strategy. Mara, one of the largest Bitcoin mining companies in the U.S., has switched to a treasury strategy because the Bitcoin halving has disrupted the traditional mining business model. Whether Eric Trump has considered this dilemma regarding his business is another matter altogether. It’s possible that Eric Trump has not considered the drawbacks of creating a mining business after a Bitcoin halving. President Trump has created a Strategic Bitcoin Reserve and ended the ‘war on crypto. ’ American Bitcoin seems to fit in with this broader climate and may benefit from the family ties between the Trump brothers and President Trump.
