- Market depth has trended downwards since mid-September.
- Sam Altman’s rehiring could result in another bout of volatility for WLD.
Worldcoin [WLD] has exhibited considerable volatility of late, largely tied to the sacking and rehiring episodes of founder Sam Altman.
When the news of the tech entrepreneur’s dismissal went public last week, WLD tumbled more than 15%, AMBCrypto observed from CoinMarketCap’s data. However, as the drama extended with speculations of his comeback, the biometric crypto started to recover.
And boy, oh boy! The saga just got more interesting as OpenAI announced an agreement that could pave the way for Altman’s return to the AI research company.
We have reached an agreement in principle for Sam Altman to return to OpenAI as CEO with a new initial board of Bret Taylor (Chair), Larry Summers, and Adam D'Angelo.
We are collaborating to figure out the details. Thank you so much for your patience through this.
— OpenAI (@OpenAI) November 22, 2023
While WLD traded at $2.4 at press time, a sharp pump to the north may be likely, considering how strongly the coin reacted to such developments lately.
But what could possibly explain the surge in the token’s volatility?
This could be the reason
According to crypto market data provider Kaiko, the decline in WLD’s market depth might have contributed significantly to the token’s fluctuations. The market depth has trended downwards since mid-September, data showed.
Source: Kaiko
Market depth is an exchange’s ability to absorb relatively large market orders without materially affecting the asset’s price. Simply put, it is a measure of liquidity in the market.
It’s the market makers who provide the major chunk of liquidity on exchanges. During its launch, Worldcoin’s creators loaned about 100 million to five market makers.
However, as part of the changed agreements, the loan amount was reduced to 75 million, with Worldcoin giving market makers the option to either return 25 million WLD or purchase them at a specified market price.
Read Worldcoin’s [WLD] Price Prediction 2023-2024
AMBCrypto spotted that WLD’s price on the 24th of October was $1.67, much less than the purchase price set by the agreement. Owing to this, market makers started returning the loaned amount.
The drop in WLD’s circulating supply, from more than 134 million during launch to a little over 116 million at press time, added more strength to the aforementioned findings.
