Crypto Market Plunges by $6.9 Billion, Trump’s 'WLFI' Emerges as Leading Indicator

▲ WLFI/ChatGPT-generated image

An analysis has emerged suggesting that the World Liberty Financial (WLFI) token, a cryptocurrency project associated with U.S. President Donald Trump, served as a decisive leading indicator of the chain liquidation event that wiped out $6.93 billion from the digital asset market.

Guy Turner, host of the cryptocurrency-focused YouTube channel Coin Bureau, said in a video released on February 21 (local time), citing a report from data analytics platform Amber Data, that the World Liberty Financial token had already been signaling danger ahead of the record-breaking market crash. Turner highlighted the token’s unique structure as a hybrid of political influence and decentralized finance, with a significant portion of its supply held by insiders including members of the Trump family and close associates. These insiders are in a position to detect regulatory changes or political developments earlier than ordinary investors, suggesting that abrupt movements in the WLFI token acted as a leading indicator of major market shifts.

Eight hours before the massive liquidation event on October 10 last year, the funding rate for the WLFI token reached 2.8%, 2.8 times higher than Bitcoin’s 1%. Annualized, this implied a borrowing cost of 131%, indicating a precarious situation in which long-position investors were paying substantial premiums just to maintain their exposure. While Bitcoin’s realized volatility stood at 84%, WLFI recorded an eightfold higher volatility of 671%, reacting abnormally sensitively to systemic stress spreading across the broader market.

An analysis of the timeline during the actual crash reveals insider movements even more clearly. At 2:57 p.m. UTC, Trump announced on Truth Social his intention to impose a 100% tariff on China. Just three minutes later, at 3:00 p.m., WLFI token trading volume surged 21.7 times above normal levels to $474 million. Turner emphasized that “more volume was traded in a single hour than in the previous 20 hours combined,” suggesting that whales with prior knowledge offloaded holdings immediately after the public announcement. At the time, Bitcoin was trading steadily around $121,000, but beneath the surface, WLFI had already begun to signal an impending collapse.

The sharp decline in WLFI spread into a broader liquidity crisis through leveraged investors using cross-margin systems. As the asset’s price plunged 55%, the total value of investors’ portfolios dropped rapidly, triggering collateral shortages and resulting in margin calls that forced the liquidation of major assets such as Bitcoin and Ethereum (ETH). Order book liquidity for WLFI evaporated by 99%, shrinking from $1.8 million to just $10,000, while Bitcoin liquidity fell 96% from $311 million to $11 million, sending the market into an uncontrollable free fall.

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