Emperor Chuan buys coins! Trump Media announces $2.5 billion Bitcoin vault plan, assets will exceed $3 billion

U.S. President Donald Trump's media company, Trump Media and Technology Group (DJT), has officially announced the establishment of a Bitcoin Treasury with an investment of approximately $2.5 billion. This news not only stirred waves in the crypto circle but also demonstrates the company's intention to transform into a diversified asset holding enterprise, aiming to expand its influence in the "America First economy".

Massive Fundraising Plan, Total Amount Reaching $2.5 Billion

Trump Media stated that it has signed agreements with approximately 50 institutional investors to issue $1.5 billion in common stock and $1 billion in convertible senior secured notes (with 0% interest rate) through private placement, totaling around $2.5 billion. The transaction is expected to be completed around May 29, 2025, subject to customary closing conditions.

These funds will primarily be used to establish a Bitcoin Treasury, making Trump Media one of the few publicly listed companies globally with large-scale Bitcoin reserves.

Bitcoin as Core Asset: Defending the Company Against Financial Institution Suppression

Trump Media Chairman and CEO Devin Nunes stated that the company views Bitcoin as the "top tool for financial freedom," and this investment is not just a financial operation but also has political and strategic implications. He noted: "This is our first acquisition of a top-tier asset, which not only helps protect us from harassment and discrimination by financial institutions but will also create synergies for subscription payments for Truth Social and Truth+, utility tokens, and future transactions."

Nunes emphasized that this is a significant step towards transforming into a holding company, and the company will continue to seek acquisitions of profitable assets that align with the "America First principles".

Significant Cash Position Expansion, Total Assets Exceeding $3 Billion

According to the announcement, as of the end of the first quarter of 2025, Trump Media's existing cash, cash equivalents, and short-term investments totaled approximately $759 million. With the influx of this $2.5 billion, the company's liquid assets will suddenly exceed $3 billion.

The price of the issued common stock is calculated based on the market's last price, with the convertible notes' conversion price set at a 35% premium above the market price. This will place Bitcoin alongside other cash assets on the company's balance sheet.

Crypto.com and Anchorage Digital as Custodians

The transaction is co-led by Yorkville Securities and Clear Street, with BTIG and Cohen & Company Capital Markets as co-managers. Cantor Fitzgerald & Co. serves as the financial advisor, Nelson Mullins Riley & Scarborough LLP as the company's legal counsel, and Reed Smith LLP represents the underwriting team.

In terms of crypto asset management, the renowned exchange Crypto.com and digital asset platform Anchorage Digital will provide custody services for the Bitcoin Treasury, adding insurance-level protection for the company's digital assets.

Mergers, Financial Technology, and Utility Tokens as Future Focus

Trump Media stated in its declaration that these funds and Bitcoin reserves will be used to expand the company's overall strategic layout, including further mergers, launching subscription-based financial products, and developing proprietary utility tokens and FinTech platforms. Its Truth Social and Truth+ platforms will serve as the core bases for driving new businesses.

Although the company is confident about its future development, the statement also emphasizes that all forward-looking statements may be subject to risks such as market and regulatory changes, and cannot be guaranteed to be realized.

Hedge funds have increased their Short Equity Futures positions by $25 billion, the largest increase in three weeks in over a decade. As ETF and single stock short positions surge, the total leverage ratio has reached a historic high.

Since April, the S&P 500 index has rebounded significantly by 23%, but as investors question the sustainability of the tariff reduction-driven rebound, hedge funds are currently increasing their bearish bets on the stock market to a record level.

In the past three Commitments of Traders (COT) reports, hedge funds have increased their Short Equity Futures exposure by $25 billion, the largest increase in three weeks in a decade.

Wall Street Analyst: Public Still Skeptical of Short-Term Recovery from Tariff Sanction Suspension

Goldman Sachs analyst Ben Snider stated that the total gross leverage, including long and short positions, has risen to a historical high. Although the net leverage (long minus short) remains below February levels, the accelerated growth of short positions has changed the market landscape. This surge highlights growing doubts about the market's resilience in a V-shaped recovery after tariff sell-offs.

Steno Research analyst Oskar Vårdal noted that as economic growth and inflation begin to accelerate again, hedge funds and Commodity Trading Advisors (CTAs) continue to counter the cycle, doubling down on long-term bonds and short-term risks.

Which Shorts Are Hedge Funds Targeting?

Hedge funds' targets include ETF exchanges and individual stocks. Goldman Sachs data shows that in the second quarter, ETF short positions reached $218 billion, and single stock short positions reached $948 billion, with April seeing the largest growth in US ETF short selling.

Among US-listed ETFs, SPDR S&P Regional Banking ETF has seen its short holdings surge by 50 percentage points since mid-February, now occupying 96% of circulating shares. SPDR S&P Biotech ETF rose 27 points to 111%, and iShares Russell 2000 ETF climbed to 33%.

ETFs with historically highest short positions include VanEck Gold Miners ETF at 12% of circulating shares, First Trust NASDAQ-100 Tech ETF at 4%, and iShares Core S&P Mid-Cap ETF with $1 billion in short sales.

Wall Street's Interest in Consumer Staples Shorts Surges

Wall Street's short interests include consumer staples, utilities, and healthcare sectors, currently ranking in the top fifth. The median S&P 500 index short position represents 2.3% of market value, with short interest in financial and information technology sectors below long-term averages.

Which US Stocks Are the Most Bearish Bets?

Stocks with the largest short position increases since the February peak include Somnigroup (NYSE ticker SGI), Lucid Group Inc (Nasdaq ticker LCID), Amer Sports Inc. (NYSE ticker AS), Medpace Holdings Inc (Nasdaq ticker MEDP), Moderna (Nasdaq ticker MRNA), and First Solar Inc. (Nasdaq ticker: FSLR)

Pure market observation, not investment advice.