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World Liberty Financial Dumps Ethereum (ETH) Despite $125M in Losses
In a shocking move, World Liberty Financial (WLFI) has reportedly sold 5,471 Ethereum (ETH) tokens at a realized loss of over $125 million. The decision comes amidst the recent crypto market crash that has seen ETH prices plummet below the $1,500 mark for the first time in over two years.
According to blockchain data from Lookonchain, a wallet linked to WLFI sold the aforementioned quantity of ETH for approximately $8 million, averaging $1,465 per token. This drastic measure is believed to be an attempt to mitigate losses and restore financial stability within the company.
The sell-off comes after WLFI had previously purchased 67,498 ETH at an average price of $3,259. This means that the platform has now taken a staggering loss on this portion of their portfolio, which stands at an estimated $125 million.
The sale could be attributed to liquidity needs, as WLFI is expanding and working on new partnerships while preparing to launch a stablecoin called USD1. By selling ETH, even at a loss, the company may have helped cover costs or raise funds for its new projects.
Another possible reason for this drastic decision is risk management. Ethereum’s price has plummeted by 56% since the beginning of the year. Reducing their ETH holdings could be an attempt to limit losses and protect their portfolio from further downside pressure.
Lastly, regulatory pressure might have also contributed to WLFI’s move. The U.S. SEC is reportedly investigating the company’s finances, and WLFI is facing criticism for allegedly funneling $400 million in insider fees from its $550 million raised. Selling ETH could be a strategy to appear more stable or responsive under scrutiny.
Despite the significant loss, it’s worth noting that WLFI still holds 7,933 ETH worth approximately $11 million in their wallet, indicating that they are not entirely exiting the market.
The company’s recent decision raises questions about its commitment to supporting the cryptocurrency market. The move has sparked concerns among investors and experts alike, who are now left wondering what this means for the future of the crypto space.
In related news, WLFI co-founder Eric Trump had previously publicly encouraged his followers to buy ETH, claiming it was “great” and that they could “thank him later.” However, his post quickly led to a surge in buying pressure followed by a swift decline in prices, with critics accusing him of attempting to manipulate the market.
Source: https://coinchapter.com/world-liberty-financial-dumps-ethereum-eth-despite-125m-in-losses/?utm_source=rss&utm_medium=rss&utm_campaign=world-liberty-financial-dumps-ethereum-eth-despite-125m-in-losses
