In the recent episode of “The Market Report,” Marcel Pechman, an analyst and writer, delved into the controversial Worldcoin token launch and highlighted the discrepancies between it and other altcoins. Pechman emphasized the need for investors to thoroughly understand the project before considering any investment.
One peculiar aspect of the Worldcoin token, which was launched on July 24th, is its tokenomics. The volume of trading for this token was exceptionally high, surpassing its market capitalization. In fact, the token reportedly traded 1.6 times its entire capitalization within the first 24 hours. This raise questions about how such a high volume was even possible.
Pechman unraveled the mystery by explaining that the project had lent 100 million tokens to market makers. However, only 8 million coins were distributed to users through airdrops. It is uncertain whether these users held onto their tokens or sold them, but this does not justify the reported $400 million trading volume.
Another concerning aspect of the Worldcoin token is the unlocking of tokens in the future. Around 40% of the tokens will be unlocked between July 2024 and July 2025, which amounts to 500 times the number currently distributed to users through airdrops (8 million). This poses a significant risk for traders as the token price would have to be below $1 in July 2025 to maintain a market capitalization lower than that of Chainlink, which is currently valued at $4 billion. This would signify a 58% decrease from the current level and poses a substantial risk for traders seeking short-term gains.
Continuing with the report, Pechman explores the Deribit Bitcoin volatility index, which recently reached its lowest level in two years. Some analysts view this as an indication of the potential absence of price turbulence for Bitcoin (BTC) in the near future. However, Pechman has a different perspective. He believes that lateral movement is not the most likely outcome for Bitcoin.
To understand Pechman’s counterintuitive reading of the volatility indicator and learn how to position oneself in such a situation, viewers can watch the latest episode of “The Market Report” on the Cointelegraph Markets & Research YouTube channel.
Overall, the episode shed light on the Worldcoin token launch, emphasizing the need for investors to exercise caution and fully comprehend the project. Additionally, the report discussed the Deribit Bitcoin volatility index, offering diverse opinions on the potential future price movements of Bitcoin.