Will Worldcoin End In “Tears”? This Analyst Thinks So
February 26 2024 - 5:00PM
NEWSBTC
One analyst on X is concerned about the long-term
sustainability of Worldcoin (WLD), a project aiming to build a
universal digital identity system. While acknowledging the
project’s innovative approach and recent upswing that has seen WLD
more than 4X, the analyst thinks “Worldcoin will end in tears.” FDV
Versus Market Cap Soars Doubt: A Massive Price Dump Incoming? In a
post, the analyst points to a significant discrepancy between
Worldcoin’s fully diluted valuation (FDV) of $82.1 billion and its
current market capitalization of around $1.1 billion,
as seen from CoinMarketCap. To compare, Ethereum (ETH),
the most valuable altcoin, has an FDV of $369 billion, slightly
less than the current market cap of around $362.1 billion. The FDV
shows the hypothetical market cap if all coins or tokens were in
circulation. On the other hand, the market cap shows the total
valuation of coins in circulation. Typically, the higher the FDV,
the higher the chance of the coins in circulation being diluted
when locked assets are released. Prices will likely take a hit with
the deluge of coins hitting the secondary markets. The sell-off
would especially be intense if demand doesn’t increase
proportionally. Related Reading: Solana Poised For Major Comeback –
Analysts Spot Breach Of $103 In Worldcoin’s case, the massive
difference between FDV and the current market cap portends possible
price dumps should a considerable chunk of WLD be released. And
this will likely be the case, especially in light of what’s
expected in the coming weeks. A breakdown of its
tokenomics shows that besides coins airdropped to users, a big
chunk was allocated to venture capital firms and individuals like
Alameda Research and Three Arrows Capital (3AC). Token Unlocks data
show that more WLD will be unlocked in less than five months. The
release, observers note, could heap pressure on the coin, possibly
pushing it lower from the current valuation. Worldcoin Is
Expanding, Will WLD Bulls Succeed? Worldcoin plans to release a
universal digital identity system. This solution will run on the
blockchain and, to a small degree, rely on artificial intelligence
(AI). Although the project faced regulatory challenges in multiple
countries, including Kenya, Worldcoin recently expanded into
Singapore. Related Reading: XRP Price Soars: Analyst Predicts
Surge Beyond $200 Even so, the analyst is concerned that the lack
of demand-side drivers, specifically adoption, could slow down the
uptrend. WLD is in a sharp uptrend, looking at the development in
the daily chart. If the coin stays above $6, WLD could soar in the
coming sessions. Feature image from Shutterstock, chart from
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