American Bitcoin (ABTC) stock plunged 39% on Tuesday. Here’s why.

BTC-USD +4.22% ABTC +6.84%

American Bitcoin’s (NASDAQ: ABTC) stock price fell 39% on Tuesday, driven by selling pressure from early investor share unlocks.

“Today our pre-merger private placement shares unlocked — these early investors are freely available to cash in on their profits for the first time which is why we will see volatility,” American Bitcoin CSO Eric Trump posted on X.

American Bitcoin closed a $220.1 million unregistered private equity placement on June 27, 2025, but U.S. Securities and Exchange Commission (SEC) filings for the offering do not disclose any lock up periods for investors.

American Bitcoin President Matt Prusak posted on X that December 2 marked the “first major unlock of pre-merger shares” from “early investors who backed [American Bitcoin] months ago.”

Based on the SEC’s Rule 144, the June 27 private placement shares wouldn’t normally be freely tradable for non-affiliate investors until late December unless a registered resale statement or another valid resale exemption applied, so without further disclosures, it’s not totally clear which specific pre-merger investor shares were unlocked on December 2.

Blockspace asked American Bitcoin whether the unlocked shares were related to the June 27 private placement or another pre-merge fundraise, but we did not hear back by publication time.

American Bitcoin debuted on the Nasdaq on September 3, 2025 after completing its reverse merger with Gryphon Digital. Prior to the merger, Hut 8 (NASDAQ: HUT) brought American Bitcoin under its brand as a majority-owned subsidiary, exchanging its bitcoin mining hardware portfolio for an 80% stake in the company.

American Bitcoin’s selloff also comes amid a broader decline in bitcoin-related equities, with many major bitcoin mining stocks down 20-40% month-over-month.

Edwin Ziheng Wang contributed reporting.