Worldcoin Soars Past OpenAI Valuation: Can It Maintain Flight?

The price of the Worldcoin (WLD) token has dramatically risen in recent weeks as it surpassed the valuation of its parent company OpenAI. However, analysts warn that the token’s future trajectory remains uncertain due to concerns about its long-term sustainability.

Amusing to see Worldcoin trading at over $90 billion FDV, a higher valuation than OpenAI itself. I posted back in December saying exactly that I believed this squeeze should happen due to its extreme low float and narrative/meme status. However, the situation is likely to change… pic.twitter.com/dLhEzVMxOM
— DeFi^2 (@DefiSquared) February 26, 2024

WLD’s price reached a new high of $9.11 on February 22 which marked a 115% increase in just one week. This surge coincided with positive developments in the AI sector including the announcement of OpenAI’s new video model, Sora and a strong earnings report by chipmaker Nvidia. Analyst CryptoBusy had highlighted NVIDIA’s remarkable performance indicating a staggering 240% increase and surpassing Bitcoin’s 120% rise.

Despite the recent surge, some market analysts have expressed concerns about the sustainability of the current price increase of WLD tokens. Experts, including DeFi^2 on X, have pointed to several factors that could potentially impact the token’s value in a negative way.

One such concern is the recent increase in “hidden” emissions of WLD tokens which could dilute the value of existing tokens held by users. Additionally, many buyers might be unaware of the upcoming token unlocks in July potentially leading to a price drop when the new tokens enter circulation.

Furthermore, WLD’s market capitalization is significantly higher than its previous levels, raising concerns about a potential bubble. Market experts are keeping a watchful eye on the situation and investors are advised to exercise caution and remain informed about any developments that may arise.

Critics have also highlighted the fact that the Worldcoin Foundation has full control over its unlocked treasury and thus allowing them to potentially sell tokens over-the-counter (OTC) particularly at the current “overinflated” prices. This raises concerns about the foundation manipulating the market by increasing supply and potentially suppressing future price increases.

Worldcoin’s project has also faced criticism for its “dystopian undertones” related to data privacy and its ambitious but yet-to-be-achieved goals. The project aims to establish a universal basic income (UBI) system through digital identity verification using iris scanning. However, concerns remain regarding the feasibility and potential ethical implications of such a system.