Argentine President Javier Milei recently found himself embroiled in controversy after promoting a Solana-based memecoin called LIBRA on his X (formerly Twitter) account. The endorsement, which occurred on February 14, 2025, triggered a dramatic surge in the token’s value, followed by a catastrophic collapse, raising concerns about insider manipulation and the risks of political figures endorsing volatile cryptocurrencies.
Table of Contents
The Rise and Fall of LIBRA
Initial Surge
Following Milei’s now-deleted tweet, which described LIBRA as a “private project” aimed at fostering Argentina’s economic growth, the token’s value skyrocketed. Within hours, its market capitalization peaked at $4.4 billion, with prices surging by over 2,000% to $4.50 per token. Trading volume exceeded $1.1 billion during this period.
Collapse
Shortly after the initial hype, LIBRA’s value plummeted by over 95%, falling to $0.19 and erasing more than $4 billion in market capitalization within hours. On-chain analysis revealed that insiders had withdrawn approximately $107 million through liquidity manipulation, exacerbating the crash.
Insider Activity and Red Flags
Blockchain analysis firms like Bubblemaps identified that 82% of LIBRA tokens were concentrated in a single cluster of wallets controlled by insiders. These wallets strategically manipulated liquidity pools on platforms like Meteora to extract profits while retail investors bore significant losses.
The project’s lack of transparency was another red flag. The website for LIBRA was hastily created just hours before its launch and lacked detailed tokenomics or clear ownership information.
Milei’s Response
After the token’s collapse, Milei deleted his promotional post and issued a statement distancing himself from the project. He claimed he was unaware of the details surrounding LIBRA and had shared the tweet as part of his routine support for private initiatives. He later criticized political opponents for exploiting the situation to harm his reputation.
Wider Implications
- Impact on Investors: Retail investors suffered severe losses as insiders cashed out early. Many were left holding devalued tokens, underscoring the risks associated with speculative memecoins.
- Market Ripple Effects: The collapse of LIBRA also affected other memecoins like TRUMP, which lost $500 million in market capitalization within minutes of LIBRA’s decline.
- Regulatory Concerns: The incident has intensified scrutiny over political endorsements of cryptocurrencies and raised questions about potential conflicts of interest and market manipulation.
Conclusion
The LIBRA debacle highlights the dangers of speculative investments in memecoins, particularly when tied to high-profile endorsements. While President Milei has denied any direct involvement with the project, the incident underscores the need for greater transparency and accountability in cryptocurrency markets to protect retail investors from similar schemes in the future.