Dark storage compartment of mining machines

GFM Web4 × RWA Special Series | Institutional Deconstruction: The Trump Family Currency - Part 9

(Image caption) Late at night, while reviewing SEC documents, the number of 3,090 BTC pledged was prominently marked on the documents, symbolizing the hidden dark storage structure of American Bitcoin.

I first saw that number when I was flipping through SEC documents in the early hours of the morning.

3,090.

This is the amount of BTC that American Bitcoin has pledged to Bitcoin mining machine manufacturer Bitmain and related to mining machine purchase arrangements as of March 31, 2026.

It's not a sale, not a simple expenditure, but a pledge—a pledge with a redemption period, a fixed price, and derivative accounting.

The company's total holdings during the same period were approximately 7,021 BTC.

In other words, of the Bitcoins this company claims to hold, approximately 44% are not currently sitting cleanly in the company vault waiting to appreciate in value. Instead, they are quietly lying in the contract terms as part of a mining equipment procurement arrangement, waiting for the price of Bitcoin to determine their ultimate fate.

This is not a conspiracy theory.

The publicly available SEC filings, every single word is there.

The problem is that not many people read it all the way through and then put the numbers together.

The night of purchasing mining machines

On August 5, 2025, a procurement agreement left an unusual mark on the history of Bitcoin mining.

American Bitcoin, a Bitcoin mining company with capital and brand backing from the Trump family and closely tied to Hut 8, has signed an equipment procurement contract with Bitmain Technologies Georgia Limited, a subsidiary of Bitmain. The contract involves the purchase of 16,299 Antminer U3S21EXPH mining rigs, with a total hashrate of approximately 14.02 EH/s, for a total price of approximately $314 million.

This is a very large purchase. But what truly makes this purchase worth analyzing is not the amount, but the payment method.

Instead of paying in cash, American Bitcoin pledged approximately 2,234 bitcoins at a mutually agreed fixed price to complete the $314 million mining equipment purchase arrangement.

It needs to be clarified that the 2,234 BTC corresponds to the procurement arrangement of 16,299 mining machines on August 5, 2025; while the 3,090 BTC is the cumulative amount of pledged BTC disclosed by the company as of March 31, 2026, which already includes subsequent Bitmain mining machine purchase arrangements.

Trade Bitcoin for mining rigs.

It sounds like bartering in the crypto world, but it's actually far more complex than that.

More precisely, it doesn't sell BTC all at once to buy equipment; instead, it puts the BTC into an equipment financing contract with a redemption period, fixed price, time window, and derivatives accounting.

(Image caption) On the night of August 5, 2025, Bitmain's Antminer U3S21EXPH mining machine was delivered on a large scale. The background shows the atmosphere of the purchase contract signing between American Bitcoin and Bitmain, highlighting the key moment of exchanging 16,299 mining machines for BTC staking.

What are those 2,234 bitcoins?

In my years working in media, I've seen many cases where financial structures were packaged as simple stories. What makes the American Bitcoin case special is that it wasn't deliberately concealed; rather, the structure itself was so complex that it wasn't easy to see through at a glance.

Pledge, not sell. This is the first distinction.

When the company pledged 2,234 BTC to Bitmain, these Bitcoins were not sold. The company legally retained certain rights to them—specifically, the pledged BTC came with a redemption period of up to approximately 24 months from the date of each pledge.

24 months. This is the second key layer.

In the world of Bitcoin, what does 24 months mean?

It's enough to propel Bitcoin from $25,000 to $100,000, and enough to halve it again and again from its peak. It's enough to turn a generation of mining rigs from the industry's most advanced to obsolete equipment. It's enough to send a company plummeting from its market capitalization zenith into a prolonged period of pressure—as demonstrated by ABTC's own post-IPO stock price movement.

American Bitcoin officially listed on Nasdaq on September 3, 2025, with the stock code ABTC. Initially, market sentiment was high, and the price reached a peak during trading.

Subsequently, the stock price declined steadily. A Forbes investigation estimated that retail investors could suffer a market capitalization loss of approximately $500 million between ABTC's Nasdaq listing in September 2025 and early 2026.

I cite this number not to sensationalize, but to illustrate that understanding this structure has real significance for real people.

For Wall Street, this is a set of derivative valuations and accounting entries; for ordinary investors, it could be money in a retirement account, a real choice made following political brands and the Bitcoin narrative.

Redemption period: an option embedded in the contract

Let me put this structure in simple terms.

The company traded 2,234 bitcoins for 16,299 mining rigs. But it did not relinquish all rights to those bitcoins—it retained the option to redeem them within 24 months under specific conditions.

This is neither a typical equipment financing nor a typical BTC sale.

American Bitcoin's accountants identified this structure as a Bitcoin redemption option and used the Black-Scholes pricing model to estimate its fair value. Inputs included the market price of the underlying asset BTC, implied volatility, the risk-free interest rate, and the expected duration of the redemption option. Due to the inclusion of significant unobservable inputs, this derivative was classified as a Tier 3 liability.

Black-Scholes was originally an option pricing model. When a mining company's equipment procurement contract needs to be valued using an option model, the problem becomes clear: the contract is no longer just an equipment contract, but a hybrid instrument with financial options.

The term "third level" means that it does not have daily publicly available market quotes like listed stocks, nor does it have directly observable price references like ordinary bonds. It relies heavily on models, assumptions, and unobservable inputs.

In other words, this is not a simple "equipment purchase" expense on the financial statements, but a derivative financial instrument that needs to be remeasured at fair value every quarter, and the profit or loss is included in the current period's income statement.

This arrangement left a clear mark in the Q1 2026 financial report: approximately $37.3 million in derivative gains related to Bitcoin redemption and put options were recognized during the period, partially offsetting digital asset losses.

Mining machine purchase contracts generate derivative gains and losses.

When I first saw this item in the financial statements, I paused for a moment. This is not typical financial language used by mining companies.

(Image caption) 2,234 bitcoins are "locked" in the contract as collateral, next to an Antminer mining machine, visually demonstrating the financial structure of staking rather than selling, and a 24-month redemption option.

When BTC rises: three profit lines are ignited simultaneously.

Now let's do a scenario simulation.

Assume that Bitcoin's price rises significantly during the staking period.

In a typical equipment purchase, the company pays the money, the mining rigs arrive, and the story ends. But in this structure, the company retains the option to redeem the 2,234 BTC that were pledged. If the market price of BTC is significantly higher than the agreed-upon fixed price at the time of staking, redeeming these Bitcoins becomes a profitable venture.

This means that when BTC rises, American Bitcoin theoretically enjoys three profit lines simultaneously:

The first point is that the market value of unpledged BTC in the strategic reserve has increased.

Secondly, the value of the redemption option for pledged BTC increases—the company can choose to reclaim these Bitcoins at a cost lower than the market price.

Thirdly, the mining machines are already mining, and the market value of each newly mined BTC is also rising in tandem.

The three yield lines overlap to form a Bitcoin exposure with a leverage effect.

This was Eric Trump's core narrative during the investor call. He emphasized that the company's strategy was to double down on Bitcoin, not to shift towards AI, and to use Satoshis per share as a core metric to show investors the rate at which Bitcoin accumulates behind each share of common stock.

This narrative has a real logical basis.

The problem is that the same structure can work in the other direction as well.

When BTC falls: Dark trading exposed

In the first quarter of 2026, the price of Bitcoin experienced a significant decline.

American Bitcoin reported quarterly revenue of approximately $62.1 million and a net loss of approximately $81.8 million, with confirmed digital asset losses reaching approximately $117.2 million.

This quarter, the company achieved its highest quarterly mining output ever—817 BTC. Mining machines are operating at high efficiency, with mining costs reduced to approximately $36,200 per BTC, and gross margin maintained above 52%.

However, the loss in fair value on the asset side wiped out all the operational improvements.

This is the part of the structure that deserves our serious attention.

The mining machines are roaring, but the financial reports show losses.

The deeper problem is that the 3,090 pledged BTC are currently under dual pressure: on the one hand, the decline in Bitcoin prices has reduced the economic significance of redemption; on the other hand, if the price of BTC does not reach a level sufficient to support the company's redemption during the redemption period, these pledged BTC may not return to the company's freely held Bitcoin reserves, but may ultimately be used for mining equipment purchases.

Some market analyses have extrapolated, based on a fixed price, redemption costs, and the market price of BTC, that for a company to return the pledged BTC to its free reserves, the price of BTC would need to rise to a certain extent during the redemption period. The specific threshold for such extrapolations depends on the prices and assumptions used in different reports.

Therefore, what really matters here is not a single percentage, but the direction of the structure itself: American Bitcoin claims to be a "Bitcoin accumulation platform," but a significant proportion of the core assets within the accumulation platform are conditional at this moment—conditional on the price movement of BTC, redemption costs, and contract terms.

This is not an exaggeration.

This is the structure that can be seen in publicly available documents.

(Image caption) American Bitcoin's simplified balance sheet visualization: Of the total holdings of 7,021 BTC, approximately 3,090 BTC are highlighted in red as pledged, with derivative liabilities and digital asset losses displayed next to them, revealing the "dark holding" situation.

Bitmain, the unusual trading partner

In this structure, one role is often overlooked: Bitmain.

In a typical equipment procurement relationship, the supplier receives payment, delivers the goods, and the transaction is complete. However, when the purchase price is secured by BTC, the supplier effectively becomes a special financial counterparty.

Bitmain did not receive cash. Instead, it received a batch of volatile digital assets with a redemption period and a fixed price arrangement.

This structure is so unusual that a former SEC enforcement lawyer told the media that greater transparency may be needed in disclosing the details of the relevant provisions.

What did Bitmain do?

It has expanded the sale of mining machines from equipment transactions into a financial arrangement with exposure to BTC volatility. As the world's largest ASIC mining machine manufacturer, it has the capacity to withstand the uncertainty inherent in such an arrangement; however, it also means that in the event of extreme price movements in the BTC market, it will be difficult for any party in this structure to remain unaffected.

Bitmain sells mining machines.

However, within this structure, it assumes the time risk of BTC.

The cable of Hut 8

American Bitcoin's balance sheet also has another connection to its parent company and operating partner, Hut 8.

According to the exclusive agreement signed with Hut 8 on March 31, 2025, Hut 8 and its affiliates are a key provider of American Bitcoin mining hosting and co-building services throughout the duration of the mining services and hosting agreement.

This means that American Bitcoin does not independently own all of its mining infrastructure; its mining machine deployment, hosting, and operation are closely linked to Hut 8's site, power, and infrastructure capabilities.

This is a detail that is often obscured by the narrative of "Bitcoin's strategic reserve".

The company's computing power is real. The mining machines are real. The BTC reserves are real.

But the land, electricity, and infrastructure beneath the mining machines are connected to another company.

Each layer of assets has its own entity to which it depends. This is why GFM has always emphasized that when reading a mining company's financial report, you can't just look at the hashrate and BTC holdings, but also at who these assets are actually registered under and how they are attached to whom.

(Image caption) BTC price fluctuation scenario: When the price rises, all three profit lines light up simultaneously (unstaking BTC, redeemed options, and mining output); when the price falls, the losses from staking BTC and derivatives suppress the financial report, with the contrast of mining machines roaring but the company losing money in the background.

The balance sheet has been reprogrammed.

Let me try to explain this balance sheet to the average reader.

If you only look at the numbers in the title, American Bitcoin's story is very compelling: as of March 31, 2026, it held approximately 7,021 Bitcoins, a significant increase from the end of 2025; its mining hashrate reached approximately 28.1 EH/s; and it mined 817 Bitcoins in a single quarter, the highest quarterly output in the company's history.

If you look down one more layer, the view changes:

Of the 7,021 BTC, approximately 3,090 have been pledged to Bitmain as part of a mining equipment procurement arrangement.

The net loss for Q1 2026 was approximately US$81.8 million.

The loss of digital assets amounted to approximately $117.2 million.

Mining machine purchase liabilities, Hut 8 exclusive operating expenses, potential dilution from ATM stock issuance, and derivative valuation fluctuations—each line represents real figures, and each line releases pressure in different ways under different market conditions.

This is not to say that the company is fraudulent.

It is not.

This means that a company can construct a structure that, while fully compliant and fully disclosed, makes it extremely difficult for ordinary investors to understand what they have actually bought after reading the annual report in one afternoon.

This is precisely why institutionalized media exist.

Six dimensions of option characteristics

Readers who do investment analysis may have already realized that American Bitcoin's mining machine procurement arrangements essentially possess several core characteristics of options.

Let me list them:

The underlying asset is Bitcoin. BTC is pledged, redemption rights revolve around the price of BTC, and derivative valuations also use the market price of BTC as a key input.

The term is 24 months, with some options available for extension. The longer the term, the greater the potential for volatility, and the more valuable the option becomes.

The exercise logic is a proactive choice for the company. The company can choose to redeem or not, depending on a comparison between the BTC market price, the fixed staking price, and the company's funding arrangements.

There is a fixed price agreed upon. The difference between this fixed price and the current market price is the intrinsic value of the redemption option.

The profit structure is non-linear. When BTC rises, the redemption right appreciates; when BTC falls, the company's behavioral logic and risk-taking methods will be adjusted accordingly.

Finally, this instrument has formal accounting recognition. SEC filings treat it as a Bitcoin redemption option or related derivative, and record it at fair value, with profit or loss recognized in the income statement.

It's not a standard option whose quotes can be seen on the Chicago Board Options Exchange. However, its financial logic is highly consistent with the core spirit of options: using today's asset allocation to retain the right to choose under different price paths in the future.

(Image caption) Eric Trump speaks on an investor conference call with ABTC stock price chart and Bitcoin symbol in the background, symbolizing the financial engineering of the mining company under the Trump family brand and the Satoshis per share narrative.

This is closer to RWA than regular mining.

In the GFM Web4 × RWA series, we have been tracking a question: how are real-world assets financialized, and how are digital assets embedded in real-world institutional frameworks?

The case of American Bitcoin provides us with a reverse perspective.

Typical RWA maps real-world assets onto the blockchain. American Bitcoin, however, does the opposite, embedding the native on-chain asset BTC into real-world mining equipment purchases, supplier credit, equipment liabilities, and publicly traded company financial statements.

This is not about putting assets on the blockchain.

This is the on-chain asset entry into the balance sheet.

This can also be described as a reverse RWA.

It doesn't put mining machines on the blockchain, but rather uses on-chain assets to purchase real-world mining machines.

It does not use tokens to represent computing power, but rather uses BTC as collateral to finance equipment.

It's not about bringing RWA into the blockchain ecosystem, but about bringing Bitcoin into the procurement contracts, supplier credit, and financial statements of listed companies.

Mining rigs are real-world assets. Bitcoin (BTC) is a digitally native asset. The purchase contract is the legal document. The redemption period is the time window. Black-Scholes pricing is the institutional language. The Nasdaq listed company shell guarantees market acceptance.

When these six things are sewn together, a mining company is no longer just a mining company.

It has become a financial machine that operates simultaneously between Bitcoin prices, mining equipment, supplier credit, and public market valuations.

Trump's position in the family empire

In this article, I'll try to put the political analysis last because what truly deserves serious attention about American Bitcoin is not its family background, but its institutional structure.

However, this background cannot be completely ignored.

In the first eight articles of GFM's "Institutional Deconstruction of Trump Family Currency" series, we explored the tokenized political identity of $TRUMP memecoin, the governance structure of WLFI, the logic of USD1 as a private stablecoin serving as a US dollar gateway, and the tension between on-chain assets and legal jurisdiction revealed by the Justin Sun lawsuit.

If $TRUMP is the sentiment gateway, WLFI is the governance gateway, and USD1 is the dollar gateway, then American Bitcoin provides the balance sheet gateway between mining machines, energy, BTC reserves, and the public market.

American Bitcoin's position on this map is that of the node with the most real-world feel.

It has real mining rigs, real electricity, real hashrate, real SEC annual reports, real purchase contracts, and real collateral terms.

This makes it more valuable for institutional research than memecoins—not because it is more secure, but because its complexity is more deeply hidden.

The risks of meme coins are quite straightforward: look at the price, the holdings, the liquidity, and the sentiment.

Understanding the risks of American Bitcoin requires you to simultaneously grasp the Bitcoin market, ASIC mining machine cycles, derivatives accounting, option valuation, equipment leasing structures, and listed company equity dilution mechanisms—without any one of these dimensions, you'll only see a partial truth.

(Image caption) Panoramic view of the mining rig dark warehouse: The computing power of the real mining farm is connected to the Hut 8 hosting infrastructure, superimposed with BTC staking contracts, Black-Scholes derivatives models and reverse RWA structures, symbolizing the complex financial machine of on-chain assets embedded in the balance sheet of listed companies.

Questions for ordinary investors

If you hold ABTC, or are considering holding it, it's worth finding the answers to the following questions before making a decision:

Of the 7,021 BTC you hold, how many are currently freely held and how many are pledged?

How will the debt incurred from the purchase of mining equipment be repaid, and what is the timetable?

How large is the gap between the redemption cost of staked BTC and the current market price?

At what price level does Bitcoin need to rise before redeeming it becomes a worthwhile option?

If they are not redeemed, where will those BTC ultimately go?

What is the schedule for ATM's stock issuance plan, and how is the dilution effect on each satoshis calculated?

After Hut 8's exclusive operating agreement expires, does American Bitcoin have the capability to operate an independent mining farm?

Are derivatives returns sustainable, or do they only occur within specific BTC price ranges?

If you have the answers to these questions, what you'll see is the complete American Bitcoin.

If not, what you're seeing is the version Eric Trump gave at the press conference.

That version isn't fake, but it's incomplete.

The duty of financial engineering

I spent a lot of time in this article dissecting a structure.

I don't want readers to mistakenly believe that GFM's stance is anti-mining, or anti-Trump family, or that using Bitcoin as collateral to buy mining machines is inherently a bad thing.

In fact, using assets as collateral for financing is one of the oldest financial practices in the business world. Borrowing money by mortgaging real estate, financing by mortgaging stocks, and obtaining liquidity by mortgaging gold—these are all normal business practices.

American Bitcoin's use of Bitcoin as collateral to purchase mining equipment makes sense from a capital efficiency perspective: the company doesn't have to sell its BTC immediately, can retain the potential gains from BTC appreciation, and can acquire the equipment needed to expand its computing power.

The problem is never the complexity itself.

The questions are: Is the complexity adequately explained? Are the risks accurately presented? And are ordinary investors capable of clearly understanding what they are actually buying?

A former SEC enforcement lawyer believes that more transparency is needed in disclosing details of such transaction arrangements.

GFM agrees with this assessment.

The real institutional risks often come not from a lack of disclosure, but from disclosure that is not pieced together and shown to you.

Our job is to put those fragments scattered in annual reports, 10-K, 8-K, quarterly reports, investor materials, and contract terms back into the same diagram.

(Image caption) The essence of financial engineering—a bright and modern Bitcoin mining farm and a high-tech financial control center, with mining machines running in an orderly fashion and emitting a soft glow. The transparent background overlays balance sheets, mortgage financing contracts, Black-Scholes models, and fragments of SEC documents.

The question amidst the roar of mining rigs

This spring, I reread Eric Trump's statement during the Q1 2026 investor call.

“A little over a year ago, American Bitcoin did not exist. Today, we hold more than 7,300 bitcoins and are one of the world’s largest publicly traded bitcoin companies.”

This statement has its truth.

The company was indeed built from scratch in just over a year. Mining volume reached an all-time high. Hashrate ranked among the top in North America. The satoshis per share metric continued to grow.

But alongside these real numbers, there are other equally real numbers:

3,090 BTC are currently staked.

Liabilities related to the purchase of mining equipment.

Hut 8 related hosting and operation arrangements.

Loss of digital assets.

Valuation fluctuations in derivatives.

The real pressure faced by ordinary investors after a sharp drop in stock prices.

The mining machines are roaring. The numbers are growing. The hidden funds are awaiting Bitcoin's verdict.

This is why GFM must be disassembled.

It's not because we want to condemn anyone.

Rather, it's because there's a complete financial engineering involved between the noise of the mining machines and the growth curve of each satoshis, something that everyone who invests real money should understand.

The future of crypto finance will not always take the form of tokens.

Sometimes, it disguises itself as a mining machine, lying quietly within a 24-month redemption contract, waiting for the price of Bitcoin to provide the answer.

Disclaimer

This article is based on publicly available SEC filings, US stock financial reports, and third-party investigative reports. It is an institutional analysis and does not constitute any investment advice. Any information regarding company valuation, stock price, BTC price, mining equipment procurement, staking, redemption arrangements, and derivatives accounting should be based on the company's official filings and professional investment advice. As of the time of writing, the author and GFM do not hold any ABTC stock or related derivatives. Readers should conduct their own due diligence.