Ethereum Crash: WLFI's Investment Tanks by $88M

US resident's wealth management firm, World Liberty Financial, is not experiencing a good week. This firm has heavily invested in cryptocurrencies

U.S. resident firm, World Liberty Financial, is not having a good week. The firm had made some serious investments in cryptocurrencies, one of which was Ethereum. And with the current downturn in the crypto market, the firm’s performance is also disastrous. According to the Arkham Intelligence platform, the firm, also known as WLFI, could be down $88 million.

The Trump-owned firm had purchased each ETH in its holding at an average price of $3,240 per token. World Liberty Fi now holds 67,880 ETH, which, at the average purchase price, comes to almost $220 million. However, with the market’s fall, the ETH in the firm’s holding is now worth $132 million. This puts the firm’s losses just from its Ethereum investment at $88 million.

Most of the company’s investment was done during the peak of crypto hype and the market’s capitalization. As such, the firm had heavily invested in ETH for its essential role in the future of decentralized finance (DeFi). However, this investment did not pan out as ETH has been performing poorly compared to BTC. An underwhelming performance is shown even when comparing it to some other altcoins, such as XRP.

The firm’s biggest investment, ETH, has seen a significant decrease in value since the firm’s purchase. ETH failed to break the $2,000 resistance in the last few hours of trading on Friday, December 1, 2023. Instead, the coin is struggling at the $1,920 resistance. The value is now also below the 100-hourly Simple Moving Average and is trading at $1,911.09. To avoid further bearish movement, ETH needs to break the $1,920 and $1,950 resistance.

Moreover, there are other signs of ETH’s price going lower in the future, as analysts see bearish signals. Renowned crypto analyst Ali Martinez has reported that Ethereum is going out of a parallel channel. This technical pattern has historically been seen in other bearish markets. Meanwhile, data from Glassnode shows that ETH’s Market Value to Realized Value (MVRV) pricing bands indicate strong support at $1,440. This also bodes poorly for future price movement, as Ethereum’s current price is at $1,900.

Another development that could bode poorly for the future of ETH is the large amounts of the coin being moved to exchanges. Recently, popular crypto platform Amber Group deposited 20K ETH in three exchanges: Binance, OKX, and Gate.io. This amount of ETH is almost equal to $37.34 million, which could be a sign of future selling. As such, the selling pressure could increase for ETH, pushing the value lower and adding to WLFI’s losses.

World Liberty Financial is struggling with Ethereum’s performance and the broader crypto market trends. To mitigate risks, WLFI could diversify its portfolio by exploring investments in other asset classes, such as bonds, equities, or real estate, to balance out its crypto holdings. Additionally, exploring options for hedging against broader market declines could help minimize potential losses.

Furthermore, considering possibilities for staking or yield-generating strategies with its crypto assets could help offset any investment losses and generate new revenue streams for the firm. Finally, the firm could explore avenues for engaging with regulatory bodies to ensure compliance and maintain a stable operating environment, especially amid the rapidly evolving crypto landscape.

Ethere’s future remains uncertain; despite its crucial role in DeFi and smart contracts, ETH lags behind Bitcoin and other altcoins in terms of price performance. However, positive developments like network upgrades or increased institutional adoption could shift the tide and begin a bullish trend.output: U.S. resident firm, World Liberty Financial, is not having a good week. The firm had made some serious investments in cryptocurrencies, one of which was Ethereum. And with the current downturn in the crypto market, the firm’s performance is also disastrous. According to the Arkham Intelligence platform, the firm, also known as WLFI, could be down $88 million.

The Trump-owned firm had purchased each ETH in its holding at an average price of $3,240 per token. World Liberty Fi now holds 67,880 ETH, which, at the average purchase price, comes to almost $220 million. However, with the market’s fall, the ETH in the firm’s holding is now worth $132 million. This puts the firm’s losses just from its Ethereum investment at $88 million.

Most of the company’s investment was done during the peak of crypto hype and the market’s capitalization. As such, the firm had heavily invested in ETH for its essential role in the future of decentralized finance (