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Why Worldcoin became a bit too volatile recently

2min Read

The drop in Worldcoin’s market depth could be the primary driver behind the token’s recent rise in volatility.

Why Worldcoin became a bit too volatile recently

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  • 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.

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.


Aniket is a full-time journalist at AMB Crypto. With experience in news publishing and content management, he is now increasingly tangled up in the web of cryptocurrencies and blockchains. His focus lies on the intersection between cryptos and traditional finance. He prefers DC over Marvel, cats over dogs and Hyderabadi Biryani over Kolkata Biryani.
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