Trump Media & Technology Group (TMTG), the parent company of Truth Social, is taking significant steps to diversify its business model by venturing into the US crypto market.
On Tuesday, the company announced a binding agreement with Crypto.com, and a newly established investment firm, Yorkville America Digital, to launch a series of exchange-traded funds (ETFs) aimed at retail investors by the end of the year.
TMTG Teams Up With Crypto.com
This strategic shift comes as TMTG seeks to create a more stable revenue stream after struggling to attract sufficient advertising revenue for Truth Social, which has become President Donald Trump’s primary platform for communication. The new partnership is reportedly designed to leverage the growing interest in crypto and investment products among retail investors.
Devin Nunes, CEO of TMGT and a former congressman, emphasized the significance of this agreement, stating, “This agreement is a major step forward in diversifying TMTG into financial services and digital assets. We’re gratified to work with great partners, Crypto.com and Yorkville America Digital, and look forward to bringing ETFs to the market for investors who believe both the American economy and digital assets are poised for tremendous growth.”
The collaboration with Crypto.com, which boasts over 140 million users, positions TMTG to tap into the digital asset market. Yorkville America Digital, which was incorporated in Florida this month, is affiliated with Yorkville Advisors, a firm known for investing in small publicly traded companies.
In addition to launching ETFs, TMTG has previously entered into an “equity line of credit” with Yorkville, allowing the investment firm to acquire discounted shares in exchange for cash.
Regulatory filings indicate that Yorkville has already purchased over 17 million shares of Trump Media as part of this long-term financing arrangement.
A Closer Look At Trump Media’s Crypto Investment Strategy
Any new investment products will need to receive approval from the Securities and Exchange Commission (SEC), which is currently led by Paul Atkins, a business-friendly lawyer nominated by Trump.
Notably, the SEC has seen a Republican majority of 3-to-1, which could influence the regulatory landscape for these new offerings. Trump Media is a significant investment for President Trump, who holds approximately 115 million shares, or 53%, of the company.
Just before his inauguration, he transferred these shares to a trust controlled by his eldest son, Donald Trump Jr., who serves on the board of Trump Media. Currently, this stake is valued at around $2.7 billion.
Despite the promising developments, shares of Trump Media have experienced volatility, with a year-to-date decline of 31%. However, following the announcement of the new investment strategy, the stock saw a nearly 5% increase, reaching $23.59 in midday trading.
Featured image from NBC, chart from TradingView.com
