WLFI Token Falls 40%+ in 2025 as Large Treasury, Regulatory Scrutiny and RWA Plans Raise Risk
World Liberty Financial (WLFI), a crypto fund backed by Donald Trump’s family, saw its WLFI governance token fall more than 40% by end‑2025 after public pricing began in September 2025. WLFI raised roughly $550m in two token sales (≈20B tokens at $0.015 in Oct 2024 and ≈5B at $0.05 in early 2025) and launched a stablecoin, USD1. During the 2025 bull market the fund accumulated large positions in wrapped bitcoin (WBTC), ether (ETH), Move (MOVE), assets tied to Aave and Mantle and other holdings; the portfolio was tracked above $17bn in September and fell to just under $8bn by Dec. 11 (~47% decline). The project completed a $1.5bn private-placement/treasury swap with ALT5 Sigma, partnered with PancakeSwap, and plans to roll out real‑world‑asset (RWA) products from January 2026. WLFI faces regulatory and reputational headwinds: U.S. lawmakers asked the SEC to preserve records over potential conflicts of interest, and Accountable.US alleged token sales to sanction‑linked parties — claims denied by World Liberty and the White House, which cite KYC/AML checks. Related Trump-linked crypto activity includes Truth.Fi’s Cronos purchase and American Bitcoin’s mining business holding ~4,784 BTC. For traders: WLFI’s steep decline, concentrated treasury and ongoing regulatory/political scrutiny raise volatility and counterparty risk for the WLFI token and could cause localized flow effects in correlated liquid assets (WBTC, ETH) if the fund rebalances or liquidates positions. Primary trading takeaways: elevated downside risk for WLFI, watch treasury sell pressure, regulatory developments, and the January 2026 RWA launch for potential liquidity or sentiment shifts.
Bearish
The news points to a bearish outlook for the WLFI governance token. Key drivers: a >40% price decline since public trading began, a large concentrated treasury exposed to market moves, and a sharp portfolio drawdown from >$17bn to under $8bn that suggests significant unrealized losses. Added negative factors include regulatory scrutiny, allegations of sanctioned‑linked sales (even if denied), and high political risk tied to the Trump family — all increase perceived counterparty and reputational risk. Short-term impact: heightened volatility and potential sell pressure if the fund liquidates or rebalances holdings (likely to affect liquid assets like WBTC and ETH). Medium‑to‑long term: token recovery depends on demonstrable regulatory clearance, transparent treasury management, and successful execution of the planned RWA products; absent these, sustained discounting and liquidity risk are likely. For traders: favor cautious sizing, monitor on‑chain treasury flows, SEC/legislative developments, and OTC/private‑placement counterparties; anticipate downside bias until clarity on asset dispositions and regulatory exposure is achieved.