The recent focus of the crypto market has almost entirely been on WLFI—a decentralized finance project backed by the Trump family. From its inception, it has been controversial due to its 'political IP + high topicality,' and the first token unlock coming on September 1 is viewed as a key variable in the short-term market.
Today we will systematically break down the potential logic of this event from the core information of the unlocking, bull-bear expectations, industry spillover impacts to participation suggestions for everyone's reference and discussion.
One, core information on WLFI's unlocking: first clarify the key background.
The unlocking of WLFI is not a full release but focuses on the holdings of early investors; the tokens of the team and advisors have not yet been unlocked, and the core information can be summarized as follows:
1. Unlock time and synchronization: On September 1, the DeFi protocol will launch on the Ethereum chain, simultaneously initiating the first token unlock and trading, which represents a model of 'protocol launch + token circulation' advancing in sync.
2. Unlocking ratio and targets: Only the tokens held by early investors during the presale phase will be unlocked, with a unlocking ratio of 20%; the tokens held by the team, advisors, and partners remain locked. This move by the project aims to alleviate short-term selling pressure.
3. The cost and market price gap: The holding costs of early investors are divided into two levels, $0.015 and $0.05; the WLFI price in perpetual futures pre-market trading on exchanges like Binance, Bybit, and OKX has fluctuated significantly—once oscillating in the $0.40-$0.42 range, even peaking at $0.55, then falling back to around $0.22; even based on the current low price, early investors still hold extremely high paper returns.
4. Size of the Trump family's holdings: The Trump family holds a total of 22.5 billion WLFI tokens through DT Marks DEFI LLC, of which former President Donald Trump personally holds 15.75 billion; based on the current market price, Trump's personal holdings are valued at approximately $6 billion, which nearly doubles his reported personal net worth.
5. Valuation level: Based on the current pre-market price, WLFI's fully diluted valuation (FDV) is approximately $22 billion; the initial circulating tokens are about 5 billion, corresponding to an initial circulating market value of about $1.1 billion, presenting characteristics of 'high FDV, low initial circulating market value.'
Two, two expectations for WLFI's own trend: The core logic of the bull-bear game
Regarding the price direction after WLFI's unlocking, there are significant market divergences, with two mainstream expectations having their supporting logic, which we will examine:
1. Bearish expectations: Profit-taking pressure is prominent, with the risk of 'good news already priced in.'
- Early profit-taking pressure is the core pressure: Even based on the current low pre-market price of $0.22, the early investors with a cost of $0.015 have already made over 14 times profit, and those with a cost of $0.05 have more than quadrupled their investment—this significant paper profit will inevitably create a willingness to 'cash out,' especially since spot trading can occur directly after the unlock, and the selling pressure may concentrate in the initial stages after launch.
- Hedging behavior weakens the reluctance to sell: Many early investors have likely hedged their risks in advance through perpetual contracts or other derivatives on exchanges, effectively locking in profits. This means that even if they choose to sell their spot later, their derivatives positions can hedge against spot losses, and they may even profit from price declines, so there will naturally be no 'reluctance to sell' mentality; instead, they may actively sell.
- The market inertia of 'buying expectations, selling facts': The period from WLFI's conception to its heating up has been long, and the concept of 'Trump endorsement' has been repeatedly hyped in the market. While the attention is at its peak, it has also led to 'expectations being digested in advance'; once the token is officially unlocked and listed, some investors might believe that 'the positive phase has been realized,' triggering a sell-off wave of 'good news already priced in equals bad news.'
2. Bullish expectations: Controllable circulation + narrative support, with potential funds driving in the short term.
- The initial circulating supply is small, making it easier for funds to dominate short-term trends: Although WLFI's fully diluted valuation reaches $22 billion, its initial circulating market value is only about $1.1 billion, with a relatively small circulating supply; in the absence of dissipating market heat, a smaller circulating supply means that as long as short-term funds flow in, it can easily push prices up, presenting a short-term possibility of 'funds controlling the market.'
- The potential catalyst of Trump's 'call': Previously, Trump and his family publicly endorsed the TRUMP token through social media, successfully driving its price up; as WLFI is a project where Trump has a deeper personal holding (valued at $6 billion), it cannot be ruled out that he or family members may publicly promote it on social media platforms—this combination of 'political IP + personal endorsement' has a significant potential impact on short-term price, forming a core support for bullish logic.
- Ecological value needs price support: WLFI is not purely a meme coin, its ecology includes stablecoin USD1, DeFi protocols, and other real businesses; for the project team, maintaining a strong price for WLFI tokens can attract more traffic and funds into the ecosystem, which in turn promotes stablecoin adoption and growth in DeFi locked value (TVL), forming a positive cycle of 'price-ecosystem,' thus creating an incentive for the project team to maintain short-term prices.
Three, not just WLFI: The spillover impact on the entire crypto market.
The unlocking and listing of WLFI will not only affect its own price but may also have a chain reaction on the entire crypto market, which can be viewed from four dimensions:
1. Short-term 'capital absorption effect' triggering sector rotation: WLFI's high topicality will likely attract a large amount of market capital and attention, potentially causing other sectors to experience 'blood loss' in the short term—especially Trump-related concept coins (such as TRUMP), political tokens, and even some DeFi projects may see short-term volatility due to capital outflows, and investors should be cautious of the phase risk brought by 'hotspot transfers.'
2. Defining the valuation logic of the 'political token' track: As the most representative 'political token' at present, WLFI's market performance will become a 'barometer' for the entire track: If it can maintain a high position after the unlock, the market may increase its confidence and valuation expectations for similar projects; if there is a crash, it may cool down the 'political narrative' track and even provoke doubts about such projects being 'pure speculation, without value,' directly impacting subsequent financing and valuations of similar projects.
3. Potential trigger for regulatory risks: The Trump family is deeply involved in WLFI and has profited significantly (with personal holdings of $6 billion), which has sparked discussions about 'conflict of political identity and commercial interests'; coupled with the fact that it is currently the U.S. election cycle, cryptocurrency regulation is already in a sensitive stage—if WLFI subsequently triggers regulatory scrutiny (such as whether it involves non-compliant fundraising, whether it uses political influence for speculation, etc.), it will not only directly impact itself but could also put the entire crypto industry under stricter regulatory scrutiny, even becoming a 'pretext' for tightening regulations.
4. A 'touchstone' for the integration of traditional finance and DeFi: WLFI has signed a $1.5 billion private placement agreement with Nasdaq-listed company ALT5 Sigma, and its stablecoin USD1 has also been adopted by some institutions—this is equivalent to a 'trial run' of traditional financial institutions for 'politicized DeFi projects': if the cooperation goes smoothly and USD1 adoption increases, it may pave the way for more traditional capital to enter such projects; if cooperation encounters obstacles and the stablecoin's implementation falls short of expectations, it could weaken traditional capital's confidence in the crypto industry and affect subsequent cross-industry cooperation.
Four, suggestions for different market participants: adjust strategies as needed.
For short-term traders, long-term investors, and industry observers, we provide corresponding advice for each role:
1. Short-term traders: High volatility game, risk control is the premise: First, it is important to clarify that short-term trading of WLFI will inevitably be a high-volatility, high-risk game, and do not hold a mindset of 'guaranteed profit'; operationally, it is necessary to closely monitor three signals—the changes in trading volume around September 1 (whether there is concentrated selling pressure or accumulation), the depth of the exchange order book (whether it can accommodate large trades to avoid excessive slippage), and the social media dynamics of Trump and his family (whether there is public endorsement); at the same time, strictly control positions (suggested within 30%), set clear take profit and stop-loss points to avoid significant losses from chasing up or down or holding positions.
2. Long-term investors: Penetrate the narrative, focus on fundamentals: Do not be swayed by 'Trump endorsement' or short-term price fluctuations; core attention should be on the project's actual value—such as the adoption rate of the USD1 stablecoin (whether there are real application scenarios, whether the number of cooperative institutions continues to increase), the TVL of the DeFi protocol (whether the locked amount can steadily grow, reflecting ecological activity), and the team's execution ability (the functionality iteration and issue response speed after the protocol goes live); at the same time, be wary of valuation bubbles, questioning whether the current $22 billion FDV matches its ecological scale and whether it overdraws 'political narrative' expectations—all of these need rational assessment to avoid being stuck in high positions due to blind long-term holding.
3. Industry observers: Grasp case value, focus on new logic: WLFI is a typical case of 'political narrative combined with cryptocurrency,' and it is worth closely observing two directions—one is the market's weight choice between 'IP endorsement' and 'practical value,' to see whether meme attributes or ecological value dominate price trends; the second is the impact of the regulatory and political environment on the project, such as whether the WLFI will be used to hype crypto issues during the U.S. election period and whether Washington will introduce targeted regulatory measures; summarizing the market rules of 'political tokens' from this case is more valuable in the long term than simply focusing on price fluctuations.
Five, summary: An event with both high risk and high observation value.
The unlocking of WLFI tokens is essentially an interweaving of 'political narrative, short-term game, long-term ecology, and regulatory risk': in the short term, it is almost inevitable that market volatility will intensify, and the huge profit-taking of early investors and the potential call expectations of the Trump family will become the core contradiction of the bull-bear game; in the medium to long term, the value of WLFI ultimately depends on two points—whether the ecology can be implemented (especially the actual adoption of the USD1 stablecoin) and whether it can withstand potential regulatory scrutiny.
For ordinary participants, rather than blindly betting on price fluctuations, it is better to view it more rationally: if you want to participate, be sure to prioritize risk control and not invest more than what you can afford; if you choose to wait and see, you can also take it as a case study of 'the new narrative in the crypto market,' understanding the logic of the combination of political IP, capital games, and technological ecology. After all, in the crypto market, understanding trends and summarizing rules is more meaningful in the long term than betting on a single short-term price movement.
Finally, I would like to ask everyone, regarding the unlocking of WLFI, do you tend to be bearish or bullish? Do you think the risks are too great and choose to wait and see, or do you believe there are opportunities worth participating in cautiously? Feel free to discuss.
