Imagine you own a boat. One morning, you look out the window and see that the tide has come in, lifting every boat in the harbor a good few feet. But then you notice something strange. The boathouse, which is supposed to be attached to the same dock and rise with the same water, has somehow sunk halfway into the bay. It makes no sense. In the world of digital money, something just as baffling happened this week, and it left a lot of people scratching their heads.
The Short Version
- Bitcoin rose from $86,000 to over $93,000 this week.
- American Bitcoin (ABTC) stock lost one-third of its value.
- ABTC stock collapsed due to a lock-up expiry.
On one side, you have Bitcoin, the big one, the original digital currency. Its price had a great couple of days, climbing back up from around $86,000 to over $93,000. But on the other side, you have a company called American Bitcoin, a stock so closely tied to Donald Trump’s family that people treated it as a stand-in for Bitcoin itself. As Bitcoin rose, this company’s stock didn’t just fail to keep up; it crashed, losing a third of its value in a single day.
It’s a classic head-scratcher. If two things are supposed to move together, why did they suddenly run in opposite directions? The answer is a fantastic lesson in what you’re actually buying when you invest your money.
What’s Got Bitcoin in a Good Mood?
First, let’s look at why Bitcoin itself was having a good week. Two big things happened that had almost nothing to do with the technology itself and everything to do with the wider economy. Think of it like the weather changing for the better.
The first change came from the Federal Reserve, the group that sets the country’s main interest rates. They announced they were stopping a program called “quantitative tightening.” That’s a fancy term for putting the brakes on the economy to fight inflation. By ending it, they signaled that the economic weather might be getting sunnier, and they might even cut interest rates soon. When borrowing money gets cheaper, investors often feel more adventurous and are more willing to put money into assets like Bitcoin.
The second piece of good news was about access. For years, one of the biggest investment companies in the world, Vanguard, was like a giant supermarket that refused to stock crypto. If you were one of their tens of millions of customers, you simply couldn’t buy it through them. This week, they changed their minds. They opened the doors, allowing their clients to buy funds that hold Bitcoin. Suddenly, a product that was once hard to get is now on the main aisle for millions of new shoppers. More buyers, same amount of Bitcoin. The price went up.
So, Why Did the Trump-Linked Stock Sink?
Now for the boathouse, American Bitcoin (which trades under the ticker ABTC). The company’s business is simple: it “mines” for new bitcoins. Because of its business and its connection to the Trump family, many traders started calling it a “Bitcoin proxy.” A proxy is just a stand-in. The idea was that buying a share of ABTC was like buying a little piece of Bitcoin, with a Trump brand premium on top.
For a while, it worked. When Bitcoin’s price went up, ABTC’s stock often went up too. But this week, the link snapped. The reason was something called a “lock-up expiry.”
Here’s a good way to think about it. Imagine a brand-new housing development is built. The first group of people to buy houses get them at a very low, early-bird price. But there’s a catch: they have to sign a contract saying they won’t sell their house for one full year. For 364 days, the only houses for sale in the neighborhood are the few leftover new ones. The supply is tiny, so prices are high.
Then, day 365 arrives. The lock-up expires. Suddenly, all those early homeowners are allowed to sell. If a whole bunch of them decide to cash in on their profit at the same time, they flood the market with “For Sale” signs. Even if the city’s overall housing market is booming, the prices in that one specific neighborhood will plummet because there are way more sellers than buyers. That is exactly what happened to American Bitcoin.
A huge number of shares, held by early investors and insiders, were unlocked and became available to sell on the open market. A tidal wave of sellers hit, and the stock price collapsed so fast that trading had to be halted several times. The company’s president, Matt Prusak, tried to calm investors, saying on X (formerly Twitter) that the team:
expected the next few days to be choppy as those shares find new homes.
But the damage was done. The proxy trade was broken.
Why the Two Were Never Really Twins
This whole episode reveals why a stock that’s *about* Bitcoin is never the same as Bitcoin itself. They might look similar, but they are built differently and respond to different forces.
First, there’s the supply. The total number of Bitcoins that will ever exist is fixed at 21 million, and new ones are created at a slow, predictable rate. The supply of American Bitcoin’s stock, however, just jumped dramatically overnight. The flood of newly available shares completely overwhelmed any good news from the broader crypto market.
Second, the stock carries extra baggage that Bitcoin doesn’t. When you buy Bitcoin, you’re just buying the asset. When you buy a stock like ABTC, you’re buying a piece of a company. That means you’re also exposed to that company’s management, its debt, its business strategy, and its brand. In this case, the stock is tied to the Trump brand. The source article notes that other Trump-linked crypto projects and even Trump Media & Technology Group have seen their values fall sharply. When the “Trump crypto” brand is having a tough time, that sentiment can drag down a stock like ABTC, regardless of what Bitcoin is doing.
Finally, a Bitcoin miner is a business, not just a pile of coins. It’s a leveraged bet. It has to pay for giant warehouses full of computers, massive electricity bills, and employee salaries. Its success depends on the price of Bitcoin staying high enough to cover all those costs. It’s the difference between owning a bar of gold and owning shares in a gold mining company. The mining company can go bankrupt even if the price of gold is rising, if its own costs get out of control.
In the end, the story of Bitcoin and American Bitcoin this week wasn’t a mystery. It was a reminder. Bitcoin’s price went up because the big economic picture got a little brighter and a major store decided to put it on the shelf. American Bitcoin’s stock went down because it was never really Bitcoin in the first place. It was a company, with its own unique set of problems, and on Monday, a dam of locked-up shares finally broke.