Trump’s World Liberty Financial Hit by Shocking $125M Loss – What Went Wrong?

World Liberty Financial (WLFI), a decentralized finance (DeFi) platform backed by President Donald Trump and his family, has recently liquidated some of its cryptocurrency holdings, incurring a significant financial loss. Blockchain analytics company Arkham Intel confirmed that WLFI had sold 5,471 Ethereum (ETH) for roughly $8.01 million on April 9. That sale translated into a remarkable $125 million loss based on WLFI’s prior investment.

Significant Loss from Ethereum Sale

The Ethereum transaction had a selling price of $1,465 per token, which is a significant drop from the average purchase price of $3,259 per token. WLFI purchased 67,498 ETH for an initial investment of $210 million, thus the losses incurred by WLFI are directly attributable to the decline in Ethereum’s price. This unfortunate transaction exemplifies the volatility of the cryptocurrency market, particularly for those with larger positions like WLFI’s.

Withdrawal from Aave and Exchange Swaps

In addition to the ETH sale, the WLFI wallet had withdrawn Ethereum from Aave, a popular decentralized finance platform, where it had been earning yield or used as collateral. The funds were subsequently transferred to CoW Protocol, a decentralized exchange aggregator. The transaction involved swapping the ETH for USDC, which suggests that WLFI may be reducing its market exposure or preparing for future investments.

WLFI’s Portfolio Growth in Q1 2025

Despite the recent loss, WLFI’s portfolio showed some positive movement earlier in the year. According to the Q1 2025 Cryptocurrency Market Report by Finbold, the platform saw a 13.41% increase in its portfolio, growing from $72.82 million to $82.51 million. This growth was driven by a mix of cryptocurrency assets, but the Ethereum holdings remain a significant part of its portfolio.

Ethereum’s Market Struggles

The timing of WLFI’s ETH sale coincided with Ethereum’s recent struggles in the broader cryptocurrency market. Ethereum, the second-largest cryptocurrency by market capitalization, has faced a significant drop in value, losing the $2,000 support level amidst a larger market sell-off. As of the latest data, ETH was trading at around $1,484, down approximately 20% over the past week. This price decline has contributed to WLFI’s massive losses.

WLFI’s Continued Interest in Ethereum

WLFI has nonetheless continued to navigate towards Ethereum despite the recent downturn. In February, WLFI provides public support for ETH by stating that the first son, Eric Trump, recommended accumulating ETH, which strengthens the family decisions regarding ETH. Earlier in the year, WLFI had purchased another $10 million of ETH units in addition to its original position. Although WLFI has experienced a steep discount recently, it has continued to have a significant commitment to Ethereum.

WLFI’s Portfolio Status and Market Outlook

At this time, WLFI has lost 2.5% of its total portfolio valued at $97.15 million. Ethereum continues to be one of the largest assets in the portfolio at roughly 5.3% of total portfolio value. The overall decline of the portfolio is an indication of the overall decline in cryptocurrency values and, more directly, the volatility of Ethereum is impacting WLFI. Therefore, WLFI’s recent loss is indicative of the risks associated with taking large positions in volatile assets such as Ethereum. Although in the past the platform has shown resiliency, its current situation highlights the volatility of the crypto market and the challenges of positioning itself given an instability market.