The price of Worldcoin (WLD) saw a decline of over 2% following reports that the FTX estate is preparing to auction 22.3 million locked Worldcoin tokens, valued at approximately $37.7 million. The auction, expected to take place at a steep discount, has triggered a wave of speculation and anxiety within the Worldcoin community, impacting the token’s price and market sentiment.
FTX’s Recovery Efforts: Why the Auction Matters
The FTX estate’s decision to auction its Worldcoin holdings comes as part of its ongoing efforts to recover funds for its creditors. Following the high-profile collapse of the FTX exchange, the estate has been liquidating various crypto assets to generate liquidity. Previously, FTX sold its holdings of Solana (SOL) and Metaplex (MPLX) tokens, raising millions of dollars in discounted sales. The upcoming WLD auction is expected to follow a similar pattern.
The FTX estate has a total of 22.3 million WLD tokens, which will unlock daily until 2028. The tokens are split into two distinct lots:
- Lot 1: 20,539 WLD tokens that will unlock daily from December 1, 2024, to July 24, 2026.
- Lot 2: 13,689 WLD tokens that will unlock daily from July 25, 2026, to July 24, 2028.
The structure of this lock-up has made some potential buyers uneasy, particularly given the long-term nature of the unlock schedule, raising questions about the liquidity and future value of the tokens. As a result, there is speculation that the auction price could be discounted by as much as 40% to 75% off the current WLD market price of around $1.69.
Market Reaction: WLD Slides Amid Uncertainty
The announcement of the auction has put pressure on WLD’s price, which dropped by more than 2% following the news. At the time of writing, WLD is trading near $1.70, with a weekly decline of over 20%. The prospect of a major sell-off at a substantial discount has raised concerns among existing investors, who fear the auction could further depress WLD’s value in the short term.
According to reports, bids from interested buyers are due by midnight UTC on Wednesday, and notifications about successful bids are expected on Thursday. Market participants are closely watching to see the final outcome, as the discount range offered will set the tone for future valuations of locked tokens.
Figure Markets and the FTX Connection
Mike Cagney, the co-founder and CEO of Figure Markets, confirmed that the FTX estate is auctioning its entire position in Worldcoin tokens. Cagney, whose firm participated in a similar auction of FTX’s Solana holdings earlier this year, noted that Figure Markets is contemplating setting up a fund specifically to bid on the WLD token auction.
Earlier this year, Figure Markets played a key role in securing a large chunk of FTX’s $7.5 billion Solana portfolio at a discounted price. The successful sale attracted a range of high-profile investors, including Pantera Capital. If Figure Markets proceeds with its WLD bid, it could bring institutional attention to the token but may also add further volatility to the market as the auction progresses.
What This Means for Worldcoin’s Price Outlook
The auction of 22.3 million WLD tokens at a deep discount could have lasting implications for the token’s price and overall market sentiment. If the tokens are sold at the rumored discount range of 40% to 75%, it could set a precedent for future sales of locked tokens, thereby influencing how investors perceive WLD’s long-term value.
Moreover, the auction underscores the challenges faced by the FTX estate in monetizing its remaining assets. While the estate is said to hold $594 million in residual assets, a significant portion—roughly $541 million—is tied up in FTX’s native FTT token, which has been marked to zero due to its illiquidity.
Expanding Worldcoin’s Reach: A Bright Spot Amid Market Volatility
Despite the recent price dip, Worldcoin has continued to expand its presence globally. The project, known for its controversial “orb” verification process, recently announced the extension of its World ID verification to Poland. This development has garnered attention and highlighted the growing reach and adoption of the World ID system, which aims to create a verified digital identity for users around the world.
While these advancements are promising for the project’s long-term goals, the immediate outlook for WLD remains clouded by the upcoming auction and its potential impact on market prices.
Conclusion
The planned sale of 22.3 million locked Worldcoin tokens by the FTX estate represents a critical moment for the project and its investors. With the auction expected to offer WLD tokens at a steep discount, short-term volatility is likely. Market participants will be closely watching the auction results on Thursday to gauge the extent of the discount and what it could mean for WLD’s future price.
For now, Worldcoin’s price rally seems to have hit a roadblock, leaving the project to navigate through a period of uncertainty. Stay tuned as we continue to monitor developments and provide updates on the Worldcoin auction and its impact on the broader market.
QUEEN WHALE
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