Trump-Backed World Liberty Token Could Decimate Retail Investors, Compass Point Warns

Analysts at investment bank Compass Point expect potential pitfalls for investors in the World Liberty Financial token when it hits the market in a few days. 

WLFI will become tradable on Memorial Day, setting the Ethereum-based token up for a series of exchange listings at a high valuation, following its debut as a non-transferable governance token roughly a year ago, Compass analysts wrote in a Tuesday note.

Only a portion of WLFI’s total supply will become tradable on Memorial Day, while other tokens remain locked. That could make the token’s value look humungous on paper because over 20% of its supply is held by U.S. President Donald Trump’s family, according to Compass Point analysts. While those tokens can’t be traded, the price at which WLFI changes hands will be assumed for those holdings as well, they wrote.

“If exchanges like Coinbase list WLFI at an excessive FDV, this could be another catalyst that decimates retail traders,” the analysts wrote, noting that most retail traders who tried to capitalize on the debut Trump’s meme coin in January faced losses.

When TRUMP was introduced, around 80% of its supply was held by insiders, and the Solana-based token reached an FDV of $44 billion before it was listed on exchanges like Coinbase, the analysts wrote. TRUMP’s FDV was $8.3 billion on Tuesday, according to crypto data provider CoinGecko, with the token falling 89% from its peak price in January.

Trump’s meme coin was listed on major platforms like Binance, Coinbase, and Robinhood within days of its release, and its popularity among crypto novices led industry spectators to portray the token’s rapid as an “onaboarding event.”

Currently, some of crypto’s more advanced traders are speculating on WLFI’s price. The decentralized exchange Hyperliquid, for example, introduced so-called hyperps to traders on Monday, citing community interest on X. They mirror the functionality of perpetual futures contracts, without the need for an underlying spot price, according to Hyperliquid’s website.

The token was priced around $0.25 on Hyperliquid on Tuesday, giving WLFI a FDV of around $25 billion. That represented a notable drop from WLFI’s initial price of $0.43 on Hyperliquid.

Although WLFI is becoming tradable, the token has been harder for investors to attain than the president’s meme coin, which could be traded the moment markets became aware of it.

WLFI, so far, has been open only to accredited investors. What’s more, current holders need to complete a four-step process on the project’s website to unlock and trade their tokens. Around 34% of WLFI’s 100 billion supply was earmarked for such sales, according to the project’s so-called Gold Paper (or whitepaper).

Still, it’s unclear how much of WLFI’s total supply could hit the market on Memorial Day. A proposal to make WLFI tradable, which was approved in early July, states “a portion” of WLFI tokens sold to early supporters will become unlocked when WLFI becomes tradable. More tokens can be unlocked through a subsequent vote, it notes

“Founders, team, and advisor tokens will not be unlocked initially and will be subject to a longer unlock schedule than early supporters to demonstrate long-term commitment and alignment with the success of the protocol,” the proposal adds.