- A wallet reportedly affiliated with the Trump-backed World Liberty Financial recently dumped over $8 million worth of Ethereum.
- WLFI bought 67,498 ETH at $3,259 each for $210M earlier this year, per reports.
- WLFI now sits on more than $100 million in unrealized losses, and the sell-off has not come at a good time.
There has been a major Ethereum sell-off in the crypto industry. This time around, the said sell-off comes with a political twist. A wallet reportedly affiliated with the Trump-backed World Liberty Financial recently dumped over $8 million worth of Ethereum.
This comes amid Ethereum’s struggles with a prolonged downtrend and the growing doubts around Ethereum as an investment choice. What could be going on with Ethereum and WLFI? Is this a sign of further downturns to come?
A $210M Bet Gone Wrong
It all started with a massive gamble that WLFI made on Ethereum. The firm bought a total of 67,498 ETH at an average price of $3,259 per token. That investment was worth $210 million at the time of purchase and was a major risk-on move, even at the time.
However, with Ethereum now hovering near the $1,470 zone, the tokens are worth less than half the amount that WLFI initially paid. Earlier today, according to LookOnChain (via Arkham), WLFI sold a staggering 5,471 ETH in one go at an average price of around $1,465 per token.
This sale brought in around $8.01 million, a meager amount compared to the initial purchase value. If this sell-off is any indication, WLFI could be looking at an unrealized loss of around $125 million on its remaining holdings. This is a major financial setback for any project, let alone such a high-profile one.
Eric Trump’s ETH Endorsement Backfires
The timing of this firm’s sale is especially concerning when put side-by-side with recent public endorsements from Trump family members. Only in early February, Eric Trump publicly praised Ethereum and even called it a great time to invest. At this point, Ethereum was trading somewhere around $3,000
Eric Trump’s statements briefly sparked optimism across parts of the crypto community, and many speculators believed that other institutional or high-net-worth investors might follow suit. However, Ethereum has more than halved in price two months from this endorsement. WLFI’s most recent move just months after a public endorsement shows that even insiders might have lost confidence in Ethereum so far.
What Prompted the Sell-Off?
So what caused such a massive sell-off at such a low price? So far, there has been no official reason for this dump. However, said move might have been driven by a mix of financial stress as well as the market outlook as of late. Crypto prices are now down across the board, and sentiment is cooling rapidly.
WLFI might have opted to cut its losses because its decision-makers believe that the situation might worsen. An addition to the mystery is the speed of the transaction. According to LookOnChain, the 5,471 ETH were sold just an hour before the news became public.
This move has raised concerns about insider knowledge and strategic positioning.
Was this some calculated move to get ahead of further market drops? So far, WLFI’s $125 million paper loss stands as a huge blow, one that might threaten the project’s outlook over the long term. Can WLFI continue operating with such a major capital loss?
