The WLFI price remains in a deep sell-off this week as it plunged from a high of $0.3200 on Monday to a low of $0.1623. It was trading at $0.1845, giving it a market capitalization of over $4.5 billion, down from Monday’s high of $7.9 billion.
Why WLFI Price Has Plunged
WLFI price has plunged despite a series of measures to boost its performance, including a token burn, governance proposals, and Justin Sun purchases.
The primary reason for the crash is the crypto market’s underperformance this week, with most tokens trading in the red. When this happens, it tends to affect recently launched tokens more.
World Liberty Finance’s price has also crashed as it came under intense selling pressure from snipers and insiders. It is common for many of the early investors in a token to sell it once it starts trading.
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The crypto market differs from stocks in that it has no lockup period. This means that insiders can sell their coin immediately after being listed on exchanges.
The WLFI coin has also crashed as memories of other Trump assets remain. All Trump assets have plunged, costing investors billions of dollars. For example, the Trump Media stock is down by over 50% this year, while the Official Trump (TRUMP) meme coin has fallen by over 90% from its peak. ABTC stock has also plunged this week.
Another major concern is that the supply of WLFI coins will continue growing over time. There are now 24.6 billion WLFI tokens in circulation compared to the maximum supply of 100 billion. This means that over 75 billion tokens will hit the market soon.
Additionally, investors are uncertain about the benefits they will receive from the millions generated by the USD1 stablecoin. Most of these profits will go to the Trump family and not the tokenholders.
Also, most of the $2.7 billion in USD1 assets are held by Binance and its entities. As such, there is a risk that these entities will sell their holdings once Trump leaves office.
Will the World Liberty Finance Token Recover?
The ongoing WLFI coin price crash is in line with what we predicted here and here. The most likely scenario is that the token will continue to fall in the near term. However, we expect some dead cat bounces, where the token bounces back temporarily and then resumes the downtrend.
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