World Liberty Financial Token (WLFI), a DeFi governance token affiliated with the Trump family, may have signaled a major market collapse hours before Bitcoin moved, according to a new analysis by data provider Amberdata.
The report examines trading activity on October 10, 2025, when approximately $6.93 billion in leveraged crypto positions were liquidated within an hour. Bitcoin (BTC) fell by about 15%, Ether (ETH) by about 20%, and smaller tokens fell by up to 70%.
Amber Data found that WLFI began its steep decline more than five hours before the broader market downturn. At the time, Bitcoin was still trading around $121,000, showing little sign of immediate stress.
“It’s hard to dismiss the 5-hour lead time as a coincidence,” report author Mike Marshall told Cointelegraph. “That period is what separates a true actionable warning from a statistical artifact,” he added.
Related: Senators ask Bessent to investigate $500 million in UAE shares in Trump-linked WLFI
Abnormalities in WLFI before the decline
The researchers analyzed three anomalous patterns, including a spike in trading activity, a sharp divergence from Bitcoin, and extreme leverage, to determine whether WLFI was signaling stress before the overall market decline.
WLFI’s hourly trading volume soared to about $474 million, about 21.7 times its normal volume, within minutes of the tariff-related political news. Meanwhile, the funding rate on WLFI perpetual futures reaches approximately 2.87% every eight hours, which equates to an annualized borrowing cost of nearly 131%.
The investigation does not allege that insider trading occurred. Rather, they argue that the structure of the crypto market can make certain assets more important than their size would suggest.
Unlike Bitcoin, where ownership is widely dispersed, WLFI’s holder base is concentrated among politically connected participants, according to the report. Marshall said the trading pattern appears to be “instrument-specific,” meaning the activity is concentrated in WLFI rather than across the broader crypto complex.
“If this is a better analysis (sophisticated participants read tariff headlines faster and draw better conclusions), you would expect that to be reflected more broadly,” he said. “What we really saw was, first of all, intensive activity at WLFI.”
The timing is notable. Trading volume accelerated about three minutes after news of the tariff announcement. Marshall said this speed suggests a prepared fill rather than retail traders interpreting headlines in real time.
The relationship between WLFI and broader market declines ultimately comes down to leverage. Many cryptocurrency trading platforms allow traders to use some assets as collateral for borrowed positions. As WLFI plummeted, the value of its collateral fell, forcing traders to sell liquid assets like Bitcoin and Ether to cover their positions. These sales drove down prices and triggered further liquidations across the market.
Related: Trump family’s WLFI plans FX and remittance platform: report
WLFI reacted faster than Bitcoin to stress
According to Amber Data data, WLFI’s realized volatility was nearly eight times that of Bitcoin during the episode, making it particularly sensitive to stress. Researchers argue that structurally weaker and more leveraged assets may be the first to move during market shocks.
Marshall said the findings should not be interpreted as evidence that WLFI can reliably predict recessions. Because the analysis focuses on a single event, more data is required to establish statistical consistency. Still, he believes the action is important.
“Therefore, this signal has a finite lifespan. It has value now because of poor monitoring,” he said. “The moment there is a consensus, the alpha is arbitraged away. That’s how all market signals work. The ones that persist are the ones that no one pays attention to.”
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