Trump Media & Technology Group starts the year with pressured accounts. Despite nearly $900,000 in revenue, the parent company of Truth Social reports a net loss of $405.9 million in the first quarter. The net loss is largely due to the impact of crypto on Trump Media’s balance sheet, even though Bitcoin remains a pillar of its financial strategy. This discrepancy illustrates the direct impact of digital assets on its results.

Crypto weighs heavily on Trump Media’s accounts

The Trump Media & Technology group generated $871,200 in revenue in the first quarter. This amount marks a 6% increase compared to $821,200 recorded a year earlier. Media activities generated $810,100, while Truth.Fi contributed $61,100 in management fees related to ETF offerings.

These losses mainly stem from the group’s exposure to digital assets. Trump Media announced, in a document filed with the SEC, $244 million in unrealized losses on its crypto holdings. The company also recorded an investment loss of $108.2 million, mainly related to equity securities.

This accounting treatment explains the gap between revenues and net income. Digital assets must be regularly revalued, even when they are not sold. Thus, crypto can heavily impact quarterly accounts, especially when prices fall.

Despite this loss, Trump Media announced a positive operating cash flow of $17.9 million. This amount notably comes from the sale of put options acquired on Bitcoin-related securities and pledged. The group also continues to develop its infrastructure, audience, and upcoming monetized features.

Investors do not limit their crypto exposure to the major market assets. Trump Media also held 756.1 million CRO tokens. Their cost basis reached $113.9 million, with a fair value of $53 million. The company had finalized the acquisition of $105 million in CRO last year as part of a deal with Crypto.com.

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Bitcoin remains at the center of the treasury strategy

At the end of March, Trump Media held 9,542.16 BTC. Their cost basis reached $1.13 billion, compared to a fair value of $647.1 million. According to data provided by the company, this position is now worth about $770 million.

Part of this reserve remains locked, however. Trump Media specifies that 4,260.73 BTC, valued at $289 million at the end of the quarter, serve as collateral for convertible bonds. Meanwhile, the company held covered call options on 4,000 BTC to reduce the effects of volatility.

This strategy stems from a choice announced last year. Trump Media raised $2.5 billion to build a treasury focused on bitcoin. The group then revealed in July a bitcoin reserve of $2 billion. Since then, market fluctuations have directly affected its results.

For the upcoming quarters, Trump Media will therefore need to develop its media, streaming, and financial services activities while managing the impact of crypto on its accounts. The ongoing merger with TAE, an American company specializing in nuclear fusion technologies, could also broaden its scope. In this context, bitcoin will remain a central indicator, but cryptocurrencies will continue to create strong accounting sensitivity.