- Arkham analyst Emmett Gallic said on Friday that the 2000 BTC transfer was part of a hedge structure that required Trump Media to remove the digital assets from its balance sheet due to loss of control.
- The company’s Form 10-K showed its Bitcoin holdings declined during the reporting period, reflecting collateral pledged to an undisclosed counterparty with rehypothecation rights.
- Separately, Trump Media disclosed plans to collaborate with TAE Technology Inc. and Texas Ventures Acquisition III Corp. to spin off Truth Social into a new publicly traded entity.
Trump Media & Technology Group (DJT) pledged 2,000 Bitcoin as collateral to a counterparty and did not sell the tokens, according to Arkham analyst Emmett Gallic on Friday.
Clarifying earlier speculation around the transaction that happened last month, Gallic explained that the company had posted the 2,000 BTC, worth $175 million, as part of a hedge arrangement, giving the undisclosed counterparty rehypothecation rights, or “full discretion on what they can do with the Bitcoin collateral, including selling it.” Because Trump Media no longer retained control over the Bitcoin, the company was required to derecognize the holdings from its balance sheet.
The clarification followed disclosures in Trump Media’s latest 10-K filing with the U.S. Securities and Exchange Commission (SEC) released on Thursday. The filing showed Bitcoin holdings declined from 11,542 BTC to 9,542 BTC during the period, reflecting the pledged collateral arrangement.
Gallic initially highlighted the reduction earlier this year but later deleted that post to avoid confusion. Earlier, he had said that the transaction could be either “collateral for a loan, or sale.”
Trump Media and Technology Group (DJT) was trading at $10.71 in the after-hours. The stock closed at the same price on Thursday. In the last 6 months, it has fallen more than 40%. On Stockwits, the retail sentiment around DJT remained in the ‘neutral’ territory, as chatter levels around it remained ‘high’ over the past day.
Trump Media has not officially indicated that the pledged Bitcoin was sold into the market.
Separately, the CEO of Trump Media also reportedly alleged that Jane Street, Citadel, and other organizations manipulated DJT stock in 2024. DJT was added to Nasdaq's failure-to-deliver list, which fueled suspicions of naked short-selling. However, no authorities have publicly charged the corporations.
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