Opened with a one-third drop in the first minute, halved in 26 minutes— "Trump concept" abandoned by the market.

Cryptocurrency projects associated with the Trump family were once market favorites, but are now undergoing a dramatic collapse in trust.

On Tuesday morning, at 9:31am—just one minute after the market opened—crypto mining firm American Bitcoin saw its stock price plummet by 33%. Panic spread quickly; within five minutes the drop widened to 42%, and by 9:56am the stock price had been halved, falling more than 50%.

Facing the steep decline in American Bitcoin’s share price, company co-founder Eric Trump posted on social media on Tuesday, attributing the drop to the expiration of the stock lock-up period, rather than any fundamental issues. He wrote:

Our fundamentals are almost unparalleled.

Though American Bitcoin's stock rebounded on Wednesday, the entire “Trump concept” crypto sector is experiencing significant sell-off.

(American Bitcoin shares plummeting from their highs)

World Liberty Financial, founded by President Trump and his son, saw its token WLFI drop 51% from its early September high. Alt5 Sigma, a company promoted by Trump’s sons, saw its stock nosedive 85% from its peak earlier this year.

Additionally, “meme coins” named after Trump and his wife Melania have fallen roughly 90% and 99% from their historic highs in January.

Once, Trump's endorsement acted as a catalyst for crypto token price surges, but now the “Trump premium” supporting these speculative assets has rapidly turned into a “Trump drag.”

The “Trump Premium” Has Become a “Trump Drag”

Earlier this year, Trump’s embrace of crypto seemed enough to make digital tokens a reliable part of the financial system. Many crypto believers thought Trump had enough power to ensure the success of his favored projects.

For a time, various cross-promotions appeared effective. When Gryphon Digital announced in May it would merge with Eric Trump’s American Bitcoin, its stock soared by 173%. On its first trading day after the merger, American Bitcoin’s stock climbed another 16%.

These projects benefited from Trump-driven policy and regulatory changes, including bills aimed at mainstreaming US dollar-pegged crypto stablecoins.

But the prices of Trump-linked digital tokens have shifted from being symbols of political success to becoming burdens. Hilary Allen, a law professor at American University's Washington College of Law, said:

President Trump’s term is a double-edged sword regarding these projects’ credibility.

She added:

Trump started launching his own crypto projects, many of which quickly depreciated. If the aim was to win credibility for these projects via the Trump family, it’s likely had the opposite effect.

Long-term crypto investor Michael Terpin said, the tariff moves are a reminder:

Trump can give and he can take away.

Retail Investors Suffer the Most Losses

Since October, this downturn has wiped over $1 billion from the Trump family’s wealth generated through its crypto businesses and other ventures. However, according to the Bloomberg Billionaires Index, the family still retains considerable profits.

The real pain is being felt by retail investors who entered near the asset price peaks.

Kevin Hu, a 22-year-old student from Vancouver, had bet on the market to keep rising; but by mid-November, his crypto portfolio had dropped as much as 40% in value.

He said:

I thought with the president's support, crypto would have a price floor, but the market didn’t respond that way.

While Trump himself has recently toned down his public promotion of crypto, on Tuesday as American Bitcoin struggled, Bitcoin had one of its best days in weeks, rising about 6%, indicating a divergence between “Trump concept” assets and the mainstream crypto market.

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