American Bitcoin Corp. (ABTC), the mining company associated with the Trump family, suffered a dramatic sell-off on Tuesday as its share price collapsed by more than half within minutes. The abrupt plunge occurred during a tense period for digital assets, amplifying concerns about the durability of crypto projects tied to political figures and celebrity backing.
The drop unfolded against the backdrop of Bitcoin’s extended retreat. The world’s largest cryptocurrency has fallen more than 30 per cent since early October, weighed down by shifting macroeconomic expectations and a steady withdrawal from high-risk assets. Although Bitcoin briefly recovered on Tuesday, bouncing above $91,000 after nearly a billion dollars’ worth of leveraged positions were wiped out the previous day, the improvement did little to support ABTC. Instead, the stock stood out as one of the market’s most severe casualties.
Trading in ABTC became so volatile that multiple halts were triggered automatically. Nasdaq data recorded roughly 55 million shares changing hands during the session—far above the stock’s typical daily volume of around 3 million. The surge in activity suggested that large early holders or speculative funds were rushing to unwind positions during the broader downturn. The impact extended beyond ABTC itself, dragging down Hut 8, the company’s majority owner, which slipped 12 per cent after months of strong performance fueled by its expansion into AI-related infrastructure.
ABTC’s market journey has been turbulent since its debut through a reverse merger with Gryphon Digital in September 2025. The stock once traded near $14 on hopes that its U.S.-focused mining operations and cost efficiencies would give it an edge. However, the optimism has steadily faded. Following Tuesday’s collapse, ABTC now trades just above $2, representing a drop of more than 78 per cent from its post-merger highs. Although the company recently reported $3.5 million in net income on $64.2 million in third-quarter revenue, market sentiment has been too fragile for those fundamentals to offer meaningful support.
The scale of the decline quickly prompted speculation about insider selling. But filings show that most legacy investors remain restricted under a 180-day lockup that runs until March 2026, with additional standstill agreements preventing key insiders—such as Eric Trump and Donald Trump Jr.—from selling shares until late 2026. What changed on Tuesday was the unlocking of pre-merger private placement shares, which became eligible for trading for the first time. Eric Trump confirmed this on X, noting that early investors were now free to take profits and that such liquidity events can drive volatility. He insisted he has not sold any shares and expressed confidence in the company’s mining economics and long-term strategy.
Even so, selling continued throughout the afternoon, deepening losses and highlighting a broader pattern. Several Trump-linked crypto ventures, including WLFI, DJT, ALT5, and various associated meme tokens, have seen steep declines this year. Combined with Bitcoin’s ongoing weakness, the slump in ABTC underscores how quickly investor appetite can evaporate when markets turn and how political branding offers little insulation from sharp reversals.
