WLFI token falls to record low after $75M loan concerns, raising risks about liquidity, investor trust, and crypto market stability.
The WLFI token, linked to Donald Trump, has dropped to its lowest price ever. This was a fall following fresh information on loans that caused concern. Numerous crypto users began to be concerned about risks. Thus, the token was under intense selling pressure within a short period.
WLFI Price Drops Sharply After Loan Details Emerge
WLFI is the main token of World Liberty Financial. It fell to around $0.0767 on Saturday, based on CoinGecko data. This marks a 81% drop from its peak of $0.46 last September. In the meantime, the token is trading at around $0.079, a 4% drop in a single day.
Related Reading: WLFI Defends Lending Position, Reveals $65M Token Buyback | Live Bitcoin News
The primary cause of this collapse is, however, a huge loan taken by the project. The project is reported to have used 5 billion WLFI tokens as collateral. This equals about 5% of the total supply. The project borrowed $75 million in stablecoins at Dolomite using these tokens.
Consequently, this action raised grave investor concerns. The huge borrowing exhausted the majority of the liquidity on the platform. In fact, the USD1 pool on Dolomite reached almost 100% usage. Thus, a lot of ordinary users were not able to withdraw their money easily.
Investors Fear Risk Loop as Market Pressure Builds
However, there is a possible “risk loop” in this situation. The price of WLFI decreases and the value of collateral decreases. Thus, the project might require additional finances. In case of failure, forced selling may occur. This could push prices even lower in a weak market.
At the same time, the issues were raised because of insider connections. Both projects are associated with Corey Caplan. He is a co-founder of Dolomite and also a consultant to World Liberty Financial. Thus, this relationship cast doubt on equity and risk management.
Furthermore, there is the problem of putting pressure on the token. New plan can unlock tokens to early investors in the near future. This implies that additional tokens may be introduced in the market. Consequently, the supply can rise and demand remains low.
Moreover, the project had already spent 65.58 million on buybacks. However, those purchases are now at a loss. The mean price was 0.1507, which is much higher than the present prices. Thus, these buybacks have failed to support the price as anticipated.
Justin Sun has suffered losses in the meantime. His assets are said to have declined by approximately 80 million. This happened as WLFI lost more than 80% from its 2025 peak. Thus, even large investors are experiencing the blow.
The project has justified its actions despite these concerns. It referred to the criticism as FUD, or fear and doubt. The team indicated that it is not on the verge of liquidation. It also said that it could add additional collateral as required.
In conclusion, WLFI is facing strong pressure due to loan risks and market fears. The investors are still on the alert because the uncertainty is increasing. Thus, the future of the token will be significant in the next few days.
