Why the Trump family-backed American Bitcoin is a different sort of power play

The Trump family has a bitcoin mining company that started trading on the Nasdaq Wednesday.Why it matters: Running mining rigs is one of the most policy-sensitive corners of the crypto industry, with its number one cost input being the price of power.Catch up quick: American Bitcoin, backed by Eric Trump and Donald Trump Jr., began publicly trading on Wednesday following a merger with a small-cap bitcoin miner, which allowed it to skip a traditional IPO process.It opened trading at around $8, leaping to $13 and then settling down to just under $10 by midday. At its height Wednesday it had a market cap of over $7.5 billion, per the Financial Times. It's trading around $6.35 midday Thursday.How it works: According to an investor presentation, American Bitcoin has a three-pronged strategy to provide leadership in the U.S. bitcoin industry:Mine bitcoin. That is, the classic giant data centers that have generated so much discussion.Accumulate bitcoin. The company plans to use its capital efficient access to the public markets to buy bitcoin as well as mine it, which makes it a partial digital-asset treasury firm. It's already started buying."Amplify value via brand, audience and treasury." This is the most nebulously defined plank, but also the most familiar to Trumpworld watchers: hype.Zoom in: Later in the presentation the company talks about building platforms and monetizing its surface area in the industry.This could mean entering into some sort of software as a service play, offering a way for lots of smaller miners to enhance their efficiency.The big picture: The Trumps are entering the industry as competition has gotten fierce.The collective computing power that miners are throwing at the Bitcoin network has never been higher. Energy prices are costly and transaction fees are low. It's a tough business and getting tougher.Between the lines: The cost of energy is crucial to a mining operation.Texas is the industry capital in the U.S. due to its cheap power and a less regulated energy market.What we're watching: Nukes. We'll be curious to see if American Bitcoin comes out ahead of other miners in cutting deals with new nuclear plants, if they start getting permits.The Trump sons announced American Bitcoin earlier in March via their partnership with Hut 8 (now located in Miami ever since a 2023 merger).In May, the president signed an executive order to foster nuclear power expansion in the U.S., which would be a boon for data centers of all kinds.American Bitcoin is currently touting its partnership with Hut 8 as its source for market-beating power deals.💭 Our thought bubble: This could be yet another play to profit off of the presidency, but bitcoin mining takes a lot more elbow grease than running a meme coin or a second-tier stablecoin.

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