Trump’s WLFI Token: Hype or Hazard for Investors?
The beginning of September was not only the start of a new school year, but also the start of trading in a new digital currency. It is a token of the World Liberty Financial (WLFI) project in the field of decentralized finance, which aims to connect traditional financial services and the world of cryptocurrencies. After a week, however, a number of question marks have been raised over the new digital currency, which is backed by the family of U.S. President Donald Trump. The biggest one is whether it is a real investment with the potential to grow, or whether it is just using the president’s name to acquire a large fortune.
How and where WLFI trades
Investors can buy and sell the new digital currency WLFI on exchanges and platforms such as Binance and Coinbase starting on Monday, September 1. The launch of cryptocurrency trading is similar to an initial public offering of shares. This means that a fixed amount of the asset is released for the first trading session at an offer price, which then begins to form based on the conflict of demand and supply.
Price action and early valuation
The cryptocurrency’s price began to rise sharply after the start of trading, and the value of the stake owned by the U.S. president’s family reached almost six billion dollars, according to The Wall Street Journal’s estimates. [1] Initially, the WLFI token strengthened, reaching the level of $0.47 per piece, but later it began to lose significantly and closed the first trading day at around $0.18. It fell by more than 60%. Currently, the WLFI token is trading at approximately $0.22, which is still about five percent below the level at which it entered the market on September 1. [2]
Trading activity remains relatively high, with daily trading volumes ranging between hundreds of millions of dollars and $1.5 billion. However, it does not yet appear that the value of the “Trump” cryptocurrency will move significantly in one direction or the other. Approximately one quarter of the total token supply is currently circulating, and almost one quarter is currently held by members of Donald Trump’s family, who are behind the launch of the entire project.
Conflict-of-interest concerns
And therein lies the first problematic thing that may hinder the greater attractiveness of this new cryptocurrency for investors. Donald Trump is accused, especially by opposition Democrats, of a colossal conflict of interest. On the one hand, the Trump family has put a new cryptocurrency into circulation, but Trump himself influences the regulations that the cryptocurrency market will be subject to. [3]
The Justin Sun wallet freeze
Another big problem is related to some investors who invested in the WLFI project. For example, Justin Sun, who invested $30 million in WLFI last November. On the day the WLFI token was launched, the value of Sun’s investment increased to $75 million. However, just three days after the start of trading, World Liberty Financial blocked Sun’s wallet. He cannot access his tokens, and therefore his money. [4]
Justin Sun is of strategic importance to the entire project. The financial world sees him as an ally of the entire Trump clan. The official reason for blocking his wallet is that Sun was suspected of manipulating the market value of the WLFI token.
“Our address only carried out a few general exchange deposit tests with very small amounts, followed by an address dispersion. No buying or selling was involved, so it could not possibly have any impact on the market,” Justin Sun reacted via platform X. [5]
What analysts say
Analysts are quite divided on the further development of the value of the WLFI token. Well-known altcoin trader Altcoin Sherpa warned against hasty purchases under the influence of FOMO, which can lead to rapid losses. Analyst MacroCRG ironically noted that the U.S. president is “rug-pulling investors again” when he recalled the fall of the meme coin TRUMP by more than 90% from its peak.
Despite significant market interest, it therefore does not yet seem that the target of $1 is realistic in the short term—especially after the events surrounding the blocking of the wallet of such a prominent investor as Justin Sun undoubtedly is.
Sources:
[2] https://www.coindesk.com/price/world-liberty-financial
[3] https://www.ft.com/content/1299fb31-b224-49df-9266-306bbb37b047
[4] https://www.cointribune.com/en/justin-sun-blacklisted-after-a-brutal-drop-of-wlfi-token/
[5] https://x.com/justinsuntron/status/1963695382996894000