The crypto crash has tanked the investments of the Trump family and its followers

The recent crypto bear market has erased roughly $1 trillion of market cap and cut the Bloomberg-estimated Trump family net worth from $7.7 billion in September to $6.7 billion, a $1 billion decline. Bitcoin is reported down more than 30% from its October peak, while the Trump-branded token plunged over 90% from its $75.35 peak to about $6.25; American Bitcoin (Nasdaq-listed on Sept. 3) shares have fallen ~30% since listing and Trump Media & Technology Group stock is down ~30% in the past month and ~70% year-to-date in 2025. Market drivers cited include large liquidations of leveraged long positions and shifting rate-cut expectations, with volatility spilling into equities via margin calls — a risk-off environment that could presage further price dislocations in crypto-linked equities and leveraged positions.

Analysis

Market structure is shifting toward cash and liquid macro hedges as leveraged crypto longs unwind; direct losers are retail-heavy, low-liquidity crypto equities and celebrity/token-linked names, while risk-off beneficiaries include short-duration Treasuries and volatility sellers with capacity. Competitive dynamics favor large, liquid Bitcoin proxies and custodial products with deep market-making (price discovery and spreads widen for small caps); expect permanent market-share attrition among thinly traded SPAC/IPO entrants.

Tail risks center on a cascade from concentrated leveraged positions (exchange/prime-broker defaults), sudden regulatory enforcement on token offerings, or a custody failure — each could trigger multi-week liquidity vacuums and >30% repricing in small-cap crypto equities. Timeline: immediate (0–7 days) = margin liquidation & IV spikes; short-term (1–3 months) = equity re-rating and fund redemptions; long-term (3–18 months) = regulatory/structural shifts and survivorship of names. Hidden dependencies include OTC desks’ net exposure, SPAC earn-out structures, and correlation of retail flows to political/news cycles; catalysts: Fed guidance, large forced liquidations, or a decisive BTC directional move.

Trade implications: bias toward selective shorts and hedged long exposure. Tactical: size modest shorts in DJTWW via options to limit risk; consider opportunistic longs in liquid ABTC only after BTC stabilizes (pre-defined technical entry). Rotate portfolio into cash/short-duration Treasuries (SHY/BIL) and buy volatility protection rather than naked directional exposure.

Contrarian view: the market may be over-penalizing liquid, ETF-like Bitcoin plays (temporary dislocation) while underestimating idiosyncratic collapse risk for celebrity tokens — mean reversion possible in 3–9 months for liquid names if no regulatory shock. Historical parallel: 2018 collapse produced 6–9 month troughs then selective rebounds; unintended consequence of obvious short trades is illiquidity-driven squeezes — enforce strict size/stops and prefer option-defined-risk structures.

Key Decisions for Investors

• Establish a defined-risk short in DJTWW: buy 3-month put spread sized 2% NAV (buy 30% OTM put, sell 50% OTM) to cap downside while capturing further downside from sentiment and liquidity risk; trim/cover if DJTWW rallies >30% in 30 days or implied vol drops >40%.
• Set a tactical long in ABTC: deploy 2–3% NAV long only after BTC confirms stabilization — entry trigger = BTC +15% from recent 30-day low and 14-day RSI >45 — pair with 45-day protective puts (cost <=4% NAV) to limit downside while capturing mean-reversion in liquid BTC proxies.
• Increase cash/short-duration Treasuries allocation by 5–10% NAV (use BIL/SHY) as a hedge for continued risk-off and to provide dry powder for 3–9 month rebound opportunities; reallocate back when market IV normalizes by >25% from peak.
• Implement relative-value pair: long ABTC / short DJTWW at 1.5% / 1.5% NAV to neutralize BTC beta and isolate idiosyncratic political/brand risk; unwind if spread compresses by 50% or diverges by >40% against entry within 60 days.
• Buy market-protection: allocate 0.5–1% NAV to a cross-asset tail hedge (e.g., 3-month S&P put calendar or BTC/ETH 3-month straddle) if portfolio crypto exposure >3% NAV; close if implied vol for the hedge contracts falls >30% or after 90 days.