The cryptocurrency market is abuzz with news that Worldcoin (WLD) prices have plummeted over 20% this week, largely due to the FTX estate’s decision to auction off a staggering 22.3 million locked WLD tokens. These tokens, valued at approximately $37.7 million, are expected to be sold at a significant discount—between 40% to 75% off the current price of around $1.69. As a result, WLD’s price has dipped to approximately $1.70, reflecting broader market concerns about the implications of this auction.
The Auction Impact
The auction, which is scheduled for Wednesday with bids due by midnight UTC, is part of the FTX estate’s ongoing recovery efforts for its creditors. This move follows the earlier liquidation of the estate’s holdings in Solana tokens, which generated substantial liquidity. Mike Cagney, the co-founder and CEO of Figure Markets, has announced that his firm is considering establishing a fund to bid on the WLD tokens, similar to its previous endeavors with the FTX estate’s Solana auction.
With these tokens locked until 2028, buyers are understandably wary. The first batch of 20,539 WLD tokens is set to unlock daily from December 1, 2024, to July 24, 2026, while the second batch of 13,689 tokens will unlock from July 25, 2026, to July 24, 2028. Sources close to the auction have expressed unease about the lengthy lock-up period, raising questions about the appeal of these assets for potential buyers.
Historical Context
This auction marks a significant chapter in the tumultuous history of the FTX estate, which has been navigating the fallout from its infamous collapse. Earlier this year, the estate successfully sold a $7.5 billion portfolio of Solana tokens at a discount to investors, including prominent firms like Pantera Capital. Such moves have raised eyebrows in the crypto community, as they signal the estate’s strategy to maximize recovery for its creditors while also affecting market dynamics.
The FTX estate currently holds approximately $594 million in residual assets, primarily composed of illiquid tokens, notably $541 million in FTX’s FTT token, which has been marked to zero. This situation paints a bleak picture for the estate’s ability to leverage these assets effectively.
Future Prospects for WLD
Despite the current downturn, technical analysts remain optimistic about Worldcoin’s future price trajectory. Projections suggest that WLD could experience a recovery in 2025, with predictions ranging from a low of $3.56 to a high of $4.29. The average forecast for the token stands at approximately $4.00, indicating a potential rebound fueled by broader market recovery and the increasing adoption of World ID verification—a system recently extended to Poland, enhancing its global reach.
Worldcoin, co-founded by OpenAI’s Sam Altman, has generated interest not just for its innovative verification methods but also due to the ongoing success of OpenAI, which recently closed a substantial $6.6 billion funding round. As competition in the AI sector intensifies, the prospects for Worldcoin could align favorably with the growing interest in decentralized identity solutions.
As the FTX estate prepares to auction its WLD tokens, market participants are left to ponder the implications for Worldcoin’s price and long-term viability. While the immediate outlook appears challenging, historical patterns and market dynamics suggest a potential for recovery. Investors and analysts alike will be watching closely as the auction unfolds and its effects on the WLD price play out in the coming weeks.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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