Worldcoin Plummets by 9% in 24 Hours
Worldcoin (WLD) has experienced a significant drop in value, decreasing by almost 9% in just one day, with the price now hovering around $5.20. This decline follows a critical analysis conducted by DeFi^2 (@DefiSquared), a prominent trader on the crypto exchange Bybit, who has raised concerns about inflationary pressures and misleading marketing associated with Worldcoin.
The Causes Behind Worldcoin’s Decline
DeFi^2’s analysis delves into the reasons for the rapid devaluation of Worldcoin, highlighting factors such as emissions and strategic sales tactics by the Worldcoin Foundation.
- The token is losing value at a rate of 0.6% daily due to emissions related to grant and operator claims.
- Most of these tokens are immediately sold after issuance, contributing to the downward pressure on Worldcoin’s price.
- The Worldcoin Foundation intends to sell $200 million worth of Worldcoin to trading firms, increasing the circulating supply by an additional 18%.
Future Challenges for Worldcoin
DeFi^2 warns of future challenges for Worldcoin as unlocks for venture capital and team-related tokens are set to begin in 70 days. This could lead to a daily inflation rate of 4%, resulting in significant sell pressure and impacting the token’s price and stability.
Misconceptions and Criticisms
DeFi^2 clarifies misconceptions regarding Worldcoin’s association with tech personalities and addresses concerns about the token’s economic model, which he describes as “predatory.” He highlights potential wealth transfer to insiders at the expense of retail investors.
Investor Reaction and Market Activity
Following DeFi^2’s analysis, trading activity on Worldcoin has surged to $666 million, indicating a reassessment of positions by investors and speculators. At the moment, WLD is trading at $5.24.
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