Worldcoin is set to release a significant amount of its WLD token, targeting institutional investors and aiming to raise $195 million. This move, however, has sparked concerns about a potential negative impact on the token's price due to the increased supply.
The new tokens represent an 18.6% rise in the total circulation of WLD. Worldcoin claims this release is necessary to meet the "growing demand for orb-verified World IDs" – a system that utilizes smartphone cameras to verify user identities. The company boasts over 5 million users across 160 countries.
Worldcoin is attempting to mitigate the potential price drop through a targeted sale strategy. The tokens will be offered to institutional investors, with the possibility of a 40-day lock-up period to prevent immediate resale on the open market. This lock-up period aims to introduce stability and prevent a sudden influx of tokens from causing a price slump.
The decision to raise capital through a token sale comes amidst a wider market downturn for cryptocurrencies. Bitcoin, the world's leading cryptocurrency, is currently trading well below its all-time highs, and the overall sentiment in the market is cautious. Some analysts believe that Worldcoin's token release strategy could put additional downward pressure on the price of WLD, particularly given the current market climate.
However, Worldcoin maintains that the new tokens are essential to fuel the growth of its global identity verification network. The company argues that the additional funds will allow them to expand their services and onboard more users. They believe that by increasing adoption, the value of the WLD token will ultimately rise.
The success of Worldcoin's strategy hinges on their ability to convince institutional investors of the long-term potential of their identity verification system. The company will need to demonstrate a clear path to profitability and user base expansion to attract significant investment.
With the token sale looming, the coming months will be crucial for Worldcoin. The price of WLD will likely depend on investor confidence in the company's ability to navigate the current market conditions and execute on its ambitious growth plans.