So, World Liberty Financial’s WLFI token is finally becoming tradable on Memorial Day. That’s the news, anyway. But analysts over at Compass Point are sounding a pretty serious alarm for regular investors thinking about jumping in.
They put out a note on Tuesday that basically suggests this could get messy. The token is hitting exchanges at what sounds like a really high valuation. And there’s a catch—a big one. Only a part of the total supply is actually going to be unlocked for trading. The rest? It’s still locked up.
Why The Initial Price Might Be Misleading
Here’s where it gets tricky. Over 20% of all WLFI tokens are apparently held by Donald Trump’s family. Those tokens are part of the locked supply and can’t be sold. But get this—the price that the small, tradable portion sells for will be used to calculate the value of those locked tokens, too. So on paper, the whole thing could look enormous, maybe even humungous, without that value being real or tested by actual market selling.
Compass Point analysts didn’t mince words. They said if big exchanges list WLFI at an excessive fully diluted valuation, it could “decimate” retail traders. They pointed to what happened back in January with the former president’s meme coin, TRUMP. Most retail folks who tried to ride that wave ended up losing money.
A Cautionary Tale From Recent History
That TRUMP coin is a pretty good example, actually. When it debuted, insiders held something like 80% of the supply. Its valuation shot up to a staggering $44 billion before it even hit major exchanges. Now? It’s sitting at around $8.3 billion. That’s a fall of nearly 90% from its peak. A lot of people got burned.
And yet, here we are again. Some advanced traders are already speculating on WLFI’s price on platforms like Hyperliquid, which introduced pre-launch contracts. The price there has already dropped from an initial $0.43 to about $0.25. That still implies a huge valuation, around $25 billion. But it’s all speculation—there’s no real spot market for it yet.
The Hurdles For Regular Investors
Perhaps the biggest thing working against small-time investors is access. Unlike the meme coin, which anyone could trade immediately, WLFI has been restricted. So far, it’s only been available to accredited investors. And even current holders have to complete a multi-step process just to unlock their tokens to trade them. It’s not simple.
It’s still not clear just how many tokens will actually flood the market come Memorial Day. A project proposal says only “a portion” of the tokens sold to early supporters will be unlocked initially. The rest, including those for founders and advisors, are on a longer lock-up schedule. Maybe that shows commitment. Or maybe it just means more selling pressure down the road.
Either way, it feels like a setup where the little guy might be walking into a trap. The excitement is there, but the history isn’t exactly comforting.
