American Bitcoin (ABTC), the crypto mining and Bitcoin-treasury company co-founded by Eric Trump, experienced a dramatic stock collapse on Tuesday. Its shares plummeted more than 50% in the first hour of trading, triggering multiple halts and effectively wiping out months of speculative gains for investors. The Nasdaq-listed company, trading under the ticker ABTC, had already been under pressure from Bitcoin's significant pullback over the preceding month, but the speed and severity of Tuesday's sell-off caught even seasoned crypto-equity observers by surprise.

Shares of ABTC collapsed to an intraday low of $1.75, representing a 51% drop, before stabilizing marginally. At the time of reporting, the stock remained down by over 35%. No singular headline was identified as the direct catalyst for this rapid decline. Instead, market conditions were broadly described as brittle, following a day earlier where nearly $1 billion in leveraged crypto positions were liquidated, and Bitcoin itself had crashed to the mid-$85,000s.

The company's identity is closely tied to the Trump family. Eric Trump serves as co-founder and chief strategy officer, while Donald Trump Jr. is listed as an investor. Their involvement provided immediate brand recognition to American Bitcoin, but also associated it with one of the most politically charged families in the United States. ABTC was spun out of Hut 8 and became publicly traded in September through a reverse-merger with Gryphon Digital Mining. Initially, the market reacted positively, with shares spiking to $9.31 in its early days, seen by some traders as another 'Trump-themed momentum play'. However, this momentum proved short-lived, as the stock is now down over 78% from its September peak. SEC filings confirm that most insiders, including the Trump sons, are restricted from selling shares until at least March 2026, which rules out insider-dumping as a factor in the recent decline.

Adding to the unusual nature of Tuesday's collapse, it occurred precisely as Bitcoin itself was experiencing a rebound. After a challenging Monday, BTC roared back, surging above $91,000 by midday Tuesday. While most other crypto-exposed stocks saw a corresponding bounce, American Bitcoin notably did not. The heavy trading volume, with over 55 million shares exchanging hands compared to a typical daily average of 3 million, strongly indicated a widespread investor exodus.

American Bitcoin's business model is inherently tied to the price of Bitcoin, as the company states it holds more than 3,000 BTC, accumulated through both mining operations and market purchases. Its third-quarter report indicated relatively healthy financial performance, posting $64.2 million in revenue and $3.5 million in net income, figures that are competitive within the mining sector. The ripple effects of this downturn were not confined solely to ABTC. Other crypto ventures linked to the Trump brand also faced significant hits. The WLFI token, associated with World Liberty Financial, dropped over 30% from its recent high, according to Bloomberg. ALT5 Sigma, which holds WLFI in its treasury, saw an even steeper decline of more than 80%. Furthermore, Trump Media & Technology Group, the operator of Truth Social, experienced a sharp fall after its $2 billion Bitcoin and crypto holdings lost approximately 25% of their value. This led to an estimated $800 million decline in Donald Trump's personal stake in Trump Media. Despite these widespread losses, Eric Trump has maintained an optimistic stance, characterizing all Bitcoin volatility as a 'buying opportunity' for investors.