The LIBRA memecoin, once promoted by Argentina’s President Javier Milei, faced a steep decline of 96% in value, erasing over $4 billion from its market. Following the incident, Milei distanced himself from the project. Insiders reportedly profited significantly during the crash, while the situation draws parallels to other politically-linked memecoins that suffered similar fates.
Argentina’s President, Javier Milei, faced scrutiny after the LIBRA memecoin, which he once promoted, plummeted in value. Following its launch, the memecoin experienced a dramatic collapse of 96%, resulting in a market cap reduction of over $4 billion. President Milei publicly clarified his disassociation from the developers after realizing the project’s questionable nature, stating that he ceased to promote it once familiar with its details.
An analysis by Bubblemaps revealed that LIBRA insiders amassed $87 million during the token’s volatility, acting as the primary sellers of the asset. This significant cash-out added additional selling pressure, driving the market cap down from over $3 billion to under $200 million. The report concluded that the developers effectively absorbed the buying pressure, contributing to the downturn in value.
The decline in LIBRA mirrors trends seen in other politically-associated memecoins, such as those linked to the Central African Republic and former President Trump. In January, the official Trump memecoin saw a peak of $15 billion, only to dwindle by 80%, costing investors approximately $2 billion. Similarly, the CAR memecoin launched in February witnessed a rapid 98% decline in market value.
The pattern of drastic value losses has led to suspicions regarding potential exploitation within these presidential memecoins, with critics labeling them as state-sponsored scams. Notably, Argentinian crypto analyst Alex Kruger referred to LIBRA’s operations as indicative of ‘state-sponsored crime.’ At the time of reporting, LIBRA was trading at $0.16, down from an all-time high of $4.56.
The LIBRA memecoin’s rapid devaluation, linked to insider cash-outs, raises concerns about the integrity of political endorsements in cryptocurrency. This incident reflects broader issues within memecoins associated with political figures, suggesting a trend of value manipulation and potential exploitation. Overall, the fallout from LIBRA serves as a cautionary tale for investors in politically endorsed cryptocurrencies.
Original Source: ambcrypto.com
