A new cryptocurrency launched by World Liberty Financial, associated with the Trump family, has reportedly increased the family’s estimated wealth by approximately $5 billion, despite experiencing a significant decline in value shortly after its debut on the market. Known as WLFI, the token reached an initial high of around 40 cents following its launch on Monday, according to CoinMarketCap data. However, by Tuesday morning, the token’s value plummeted to roughly 21 cents—reflecting a 48% drop from its peak—before recovering slightly to about 23 cents in the afternoon. Nevertheless, the family’s investment in WLFI still holds an estimated worth of $5 billion, based on their possession of 22.5 billion WLFI tokens. Currently, the Trump family is unable to liquidate these holdings due to the locking of founders’ tokens, as indicated by World Liberty Financial. The company has not yet responded to inquiries for comments.
### Trump’s Evolving Stance on Cryptocurrency
Once a vocal critic of cryptocurrencies, former President Trump has shifted his perspective during his second term, now advocating for the United States to become the “crypto capital of the world.” The Trump family’s involvement in World Liberty Financial and other private crypto initiatives has raised eyebrows among regulatory watchdogs and Democratic lawmakers, who express concerns about potential conflicts of interest. In response to this scrutiny, White House press secretary Karoline Leavitt criticized the media’s portrayal of these issues, asserting that neither the former president nor his family has engaged in conflicts of interest.
In July, Trump enacted the Genius Act, the first significant federal legislation aimed at regulating cryptocurrencies. This law introduced federal guidelines for “stablecoins,” a category of cryptocurrency considered to be more stable due to its value being tied to fixed assets, such as the U.S. dollar. The rising valuation of World Liberty Financial, co-founded by Trump and his sons Eric, Donald Jr., and Barron, highlights the family’s increasing engagement with the cryptocurrency sector, encompassing both personal investments and policy initiatives throughout his presidency. This includes the launch of meme coins like $TRUMP and $Melania, which capitalized on internet trends and began trading in January.
### Understanding WLFI
WLFI serves as a digital asset that grants its holders voting rights on governance matters concerning World Liberty Financial. The company, however, warns that WLFI should not be viewed as a speculative investment, advising potential token holders that it is not intended for financial gain or resale. The fluctuations in WLFI’s price are not uncommon for newly launched tokens, according to Nic Puckrin, CEO of Coin Bureau, a crypto information provider. He explained that the initial price surge followed by a subsequent drop is a typical pattern for new tokens, driven by early enthusiasm followed by profit-taking by initial investors. Puckrin also noted that, compared to other token launches, WLFI’s decline is relatively minor, and early investors who participated in private sales are still experiencing solid returns.
World Liberty Financial also offers a stablecoin, USD1, which is pegged to the U.S. dollar. Stablecoins are generally perceived as less volatile than other cryptocurrencies. Puckrin pointed out that WLFI distinguishes itself by allowing token holders to exercise real governance rights over the USD1 stablecoin, which is expanding rapidly. This ability to influence the future direction and policies of both USD1 and World Liberty Financial adds a unique dimension to WLFI in a competitive marketplace.
### Assessing Insider Ownership Risks
The Trump family and other insiders possess over 20% of the WLFI tokens, as stated on World Liberty Financial’s website. However, the company’s regulations specify that no individual digital wallet can exert more than 5% of governance authority, a measure designed to mitigate excessive influence from insiders, according to Puckrin.
### Overview of Trump’s Other Cryptocurrency Initiatives
In May, the $TRUMP meme coin came under scrutiny when it offered its top holders a chance to dine with former President Trump. Investors reportedly spent around $140 million to acquire these coins for the opportunity. This raised concerns among government watchdogs and Democratic lawmakers regarding potential implications of linking a Trump-branded asset to access to the president. The value of the meme coin surged nearly twofold to approximately $15 in May; however, it has since declined, trading at around $8.30 on Tuesday.
Additionally, Trump Media & Technology Group, which operates the Truth Social platform, has ventured into the cryptocurrency space in recent months. In July, the company invested about $2 billion in cryptocurrencies as part of a strategy to transition into an investment firm. Shares of Trump Media & Technology Group have decreased by approximately 50% year-to-date, trading at $17.05 on Tuesday.
