As a seasoned researcher with years of experience in the volatile world of cryptocurrencies and finance, I must admit that the upcoming launch of World Liberty Financial (WLF) by Donald Trump has piqued my curiosity, if not raised some red flags. The combination of politics and business, especially in the rapidly evolving crypto sphere, is a fascinating study, to say the least.
Donald Trump and his family are hinting at the imminent debut of a novel cryptocurrency initiative, which claims to surpass traditional, sluggish, and out-of-date banking systems.
Trump to launch World Liberty Financial
On Monday, September 16th, the upcoming project is anticipated to mark another success for the participants of Polymarket, as they foresaw Trump releasing a coin prior to the November elections.
.@WorldLibertyFi — Donald J. Trump (@realDonaldTrump) September 12, 2024
Trump expressed in a recent update on X that he’s looking forward to the future with cryptocurrencies, and has planned to discuss this topic further during a “Twitter Spaces” gathering at 8 p.m. Eastern Standard Time, marking the formal debut of World LibertyFi.
Some crypto analysts are hyped. At least one observer expects the World LibertyFi token to jump “10x” over the next two weeks (see below). A Bloomberg report, however, warns that World LibertyFi has some major red flags.
It’s For Trump, Insiders
Initially, a seasoned entrepreneur named Chase Herro, known for his work with previous cryptocurrency endeavors, leads this venture.
Hello’s latest venture was Dough Financial, which resembled platforms like AAVE, JustLend, and Spark. As per DeFi Llama, Dough accumulated a maximum of $3.2 million in assets before an exploit drained more than $2 million. Currently, it has only $10,863 in total value locked and seems to be dormant.
One potential rephrasing could be: The concern here is that nearly three-quarters (70%) of World Liberty Financial’s tokens are set aside for insiders, including Trump. It’s typical for crypto projects to reserve some tokens for insiders, but 70% is unusually high.
Investing in crypto projects where the majority of ownership lies with insiders can be risky, as the value of these projects may significantly drop if these insiders decide to liquidate their holdings.
Moreover, potential regulatory obstacles might arise from the Securities and Exchange Commission, who classify these tokens as securities. This means that investors need to be provided with comprehensive details about the project and its creators for transparency purposes.
There is also the risk about competition in the lending industry, which has become highly saturated in the past few years. In addition to AAVE and JustLend, some of the most notable names in the industry are Morpho, LayerBank, and Fluid. Most of these ones have struggled to gain market share.
Currently, the majority of recently introduced cryptocurrency projects aren’t thriving. Tokens such as Notcoin (NOT), Pixelverse, and Wormhole (W) have witnessed a significant decline, dropping more than 60% from their peak values.
Trump mixes politics and business
Critics are doubting the sense behind Trump using valuable campaign time to support a profit-driven project, as there are only 50 days remaining before Election Day.
Cryptocurrency is the most recent offering from the ex-president, who has already marketed similar products on two separate occasions following his impeachment. His previous merchandise includes:
- Signed sneakers, with one pair reportedly selling for $9,000.
- Trump-branded bibles, essentially a reproduction of the King James Bible, retails for $59.99 plus tax and shipping. It’s believed to have generated $300,000 in total.
- He also reported making more than $12 million off of his series non-fungible tokens, or NFTs, featuring photoshopped images of the former president standing in front of various backdrops and garbed in costumes (i.e., sheriff’s hat and superhero cape).
- A photo book titled “Our Journey Together” sells for $100 on his website.
Data by Arkham shows that his crypto portfolio is worth over $5.7 million.
It’s unclear if Donald Trump is organizing this event to support his political campaign or to cover growing financial obligations from lawsuits. Contrastingly, in the month of August alone, Vice President Kamala Harris managed to gather a substantial amount of $361 million for her campaign, while Trump raised only $130 million.
It’s worth noting that Trump received a fine of $464 million earlier this year in a civil case.
Speaking about Trump Media & Technology Group, it’s current stock has plummeted nearly 80% from its peak this year and is at its lowest point since the merger with a Special Purpose Acquisition Company (SPAC). Forbes recently revised his estimated net worth down to $3.9 billion, which is significantly lower than the over $7 billion they had previously assessed earlier in the year.
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2024-09-14 20:24