The Trump family’s ambitious attempt to dominate the crypto world is facing significant wall of losses, both in Bitcoin and in the DeFi project they launched to reshape American finance. Eric Trump and Donald Trump Jr. are now sitting on more than $1 billion in unrealised losses on their Bitcoin holdings, according to a Forbes report. Meanwhile, World Liberty Financial (WLFI), the family’s own crypto venture, is also in an open war with one of its biggest early backers, Tron founder Justin Sun.
A $2.4 billion bet that went the wrong way
When President Donald Trump signed an executive order in March 2025 establishing a national Bitcoin Reserve, the crypto market responded with euphoria. Bitcoin hit $108,000 by May 2025, and Eric and Donald Trump Jr. were convinced it would soar another 50% within the year with their father in the White House.
Seizing what they believed was a historic window, the brothers cashed out $1.4 billion in Trump Media & Technology Group stock and $1 billion in convertible bonds to buy Bitcoin at its peak. By midsummer, Bitcoin climbed to $119,000, briefly validating the trade. The president’s stake in Trump Media fell from a majority 52% to 41% as a result.
Then the market turned. By late November 2025, signals of a risk-off shift began hitting the Trumps’ portfolio hard. Their $2.4 billion in crypto assets fell to $1.8 billion. In January 2026, holdings slid to $1.7 billion as Fed Chair Jerome Powell held interest rates steady, with Bitcoin taking a 5% hit in a single day. Their holdings now stand at approximately $1.4 billion, $1 billion less than what they originally paid, with Bitcoin trading around $73,000.
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A spokesperson for the family offered no signs of retreat. “Our bitcoin holdings reflect a long-term investment in this revolutionary digital currency, which we do not judge based on temporary, cyclical downturns,” spokesperson Shannon Devine said in a statement, per Forbes.
That resolve may face a real test. Bitcoin briefly recovered to a four-week high near $75,000 on April 14, powered by optimism around a potential US-Iran deal and a $530 million short squeeze that liquidated over 177,000 traders in 24 hours (CoinMedium, April 14). But analysts caution that $75,000 remains a critical resistance level, with macro uncertainty, including Iran conflict risk and April tax-season selling pressure, keeping Bitcoin’s next move uncertain.
WLFI and the Justin Sun fallout
While Bitcoin losses mount, a separate and noisier crisis is unfolding inside World Liberty Financial. Justin Sun, who built his WLFI stake to over $75 million and separately pledged $100 million to the TRUMP memecoin, has publicly broken with the project in a sweeping indictment posted on X.
The immediate trigger was a borrowing manoeuvre that alarmed the market. WLFI deposited 5 billion of its own tokens as collateral on DeFi lending platform Dolomite and borrowed approximately $75 million in stablecoins, a move that pushed the USD1 lending pool to 100% utilisation and temporarily prevented ordinary depositors from withdrawing their funds. Adding to the unease, the team quietly shelved a proposal to unlock $427 million worth of tokens, a move that early investors had anticipated, triggering a sharp selloff.
CoinMedium reported that Sun called the project “a trap masquerading as a door” on X, accusing WLFI of secretly embedding a backdoor blacklist function directly into its smart contract, a mechanism he says grants the project’s leadership unilateral power to freeze any token holder’s assets without notice or recourse. He also challenged the legitimacy of governance votes used to justify recent decisions, saying key information was withheld from voters and that outcomes appeared predetermined.
Sun’s grievances date back to September 2025, when WLFI froze his wallet and locked 595 million unlocked tokens, worth approximately $107 million at the time. The project said the action was part of a broader move targeting wallets linked to phishing attacks. Blockchain analytics platform Arkham now estimates his frozen position, roughly 544 million tokens, is worth around $44.65 million, down more than $80 million from earlier valuations.
Conflicts of interest and a credibility question
The backdrop makes the feud harder to separate from politics. The Trump family receives 75% of net proceeds when WLFI sells tokens, and by December 2025, those proceeds had already delivered the family $1 billion in gains while they retained $3 billion in unsold tokens. Sun’s initial $30 million investment in early 2025 coincided with the SEC backing away from a three-year market manipulation investigation into his companies, a timing that generated widespread conflict-of-interest scrutiny at the time.
Crypto ratings firm CORE3 assigned WLFI a D grade, citing insider-heavy token ownership and limited security monitoring. Analysts warn that if Sun’s allegations of undisclosed backdoor controls are verified, the damage to the credibility of the broader Trump crypto ecosystem, currently valued at around $380 billion, could be severe and lasting.
Industry implications
The Trump family’s dual exposure, to Bitcoin’s macro-driven volatility and to the reputational hazards of a politically connected DeFi project, reflects a wider tension playing out across crypto in 2026. Bitcoin’s partial recovery toward $75,000 offers some near-term relief, but the family’s average cost basis and the escalating WLFI governance controversy mean the overall picture remains deeply complicated. For the broader market, the saga raises pointed questions about what “decentralized finance” actually means when it is co-owned by a sitting president’s family.
