Trump-backed World Liberty Financial faces heavy losses
WLFI has suffered over $51 million
World Liberty Financial (WLFI), an investment firm backed by Donald Trump, has been hit with significant losses as the crypto market experiences another sharp downturn. The company, which had invested heavily in digital assets, has reportedly seen its portfolio shrink by over $51 million in unrealized losses.
Market decline wipes out millions
According to blockchain analytics firm SpotOnChain, WLFI invested approximately $242.77 million in cryptocurrencies between January 19 and January 31, 2024. However, due to recent market volatility, the firm's holdings have plummeted by more than 21%, translating into a massive unrealized loss of $51.77 million.
Major assets take a hit
Some of WLFI's most significant investments—including Ethereum (ETH), Wrapped Bitcoin (WBTC), and Ethena (ENA)—have suffered considerable losses.
- Ethereum (ETH), the firm's largest holding, has dropped by 24.45%, from an average buy price of $3,303 to $2,495, contributing to a $36.67 million loss.
- Wrapped Bitcoin (WBTC) has declined by 12.07%, leading to an $8.07 million loss.
- Ethena (ENA) has experienced the biggest drop, falling 43.72% from $0.933 to $0.525. The firm’s $4.7 million investment in ENA has lost over $2 million in value, raising concerns about its exposure to volatile assets.
Other assets like TRON (TRX) and AAVE have also recorded double-digit losses, further worsening the firm's financial position.
The risk of volatility
Despite the Trump-backed firm's broad portfolio, the crypto market's unpredictable nature has led to steep declines. The current downturn underscores the risks of investing in highly volatile digital assets, even for institutions with substantial backing.
Although WLFI has faced substantial short-term losses, market analysts suggest that the firm could still recover if the cryptocurrency market rebounds. The losses highlight the broader challenges in the crypto space, where even well-funded entities are not immune to sharp market fluctuations.
Reminder that Bitcoin price drops 12% in three days, triggering $1.8 billion in crypto liquidations.
