Worldcoin’s FDV Versus Market Cap Raises Doubts: Is a Massive Price Dump Incoming?
An analyst has expressed concerns about the long-term sustainability of Worldcoin (WLD), a project that aims to build a universal digital identity system. While acknowledging the project’s innovative approach and recent price increase, the analyst believes that Worldcoin may end up facing significant challenges in the future.
A Discrepancy in Valuation
The analyst points out a significant discrepancy between Worldcoin’s fully diluted valuation (FDV) of $82.1 billion and its current market capitalization of around $1.1 billion. In comparison, Ethereum (ETH), the most valuable altcoin, has an FDV of $369 billion, which is slightly less than its current market cap of around $362.1 billion.
The FDV represents the hypothetical market cap if all coins or tokens were in circulation, while the market cap reflects the total valuation of coins in circulation.
Potential Price Dumps
The large difference between Worldcoin’s FDV and its current market cap suggests that there may be potential price dumps if a significant amount of WLD tokens are released into circulation. This is especially true if demand does not increase proportionally to absorb the new supply. The release of locked assets could lead to a sell-off and put downward pressure on the coin’s price.
According to token unlock data, more WLD tokens will be unlocked in less than five months. This impending release could further contribute to downward price pressure and potentially lower the coin’s valuation.
Will Worldcoin Succeed Amid Expansion?
Worldcoin is expanding its operations and plans to establish a universal digital identity system that runs on blockchain technology and utilizes artificial intelligence (AI) to some extent. Despite facing regulatory challenges in various countries, including Kenya, the project recently expanded into Singapore.
However, the analyst raises concerns about the lack of demand-side drivers, specifically adoption, which could hinder the coin’s upward momentum. Although WLD has been experiencing a sharp uptrend based on its daily chart development, sustained growth may depend on increasing adoption and demand for the coin.
If Worldcoin manages to stay above $6, there is a possibility that WLD could continue to rise in the upcoming trading sessions.
Hot Take: Analyst Raises Concerns About Worldcoin’s Future
One analyst is concerned about the long-term sustainability of Worldcoin (WLD), despite its recent price surge. The analyst points out a significant discrepancy between Worldcoin’s FDV and its current market cap, suggesting the possibility of price dumps if a substantial number of WLD tokens are released. The impending release of locked assets could further contribute to downward price pressure.
While Worldcoin is expanding and aims to establish a universal digital identity system, concerns remain about the lack of demand-side drivers and adoption. The coin’s upward momentum may be dependent on increasing adoption and sustained demand.
It remains to be seen whether Worldcoin can overcome these challenges and achieve long-term success in the crypto market.
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