LIBRA Memecoin Fiasco Wipes Out $251M, Report Shows

The recent turmoil surrounding the LIBRA memecoin in Argentina underscores significant financial risks, with Nansen reporting a substantial loss of investor wealth over the weekend. According to Nansen's on-chain data, 86% of traders faced total losses amounting to $251 million. Meanwhile, only a few managed to accrue $180 million in profits, making this episode a "net-negative wealth-generating" event that potentially withdrew liquidity from the market.

This incident serves as a stark reminder of the dangers associated with tokens linked to political figures. Such instruments can be just as volatile as random memecoins and celebrity-driven cryptocurrencies, often resulting in drastic financial outcomes within a short span.

LIBRA was launched on Meteora, a decentralized exchange based on Solana, and saw an initial surge. The market cap quickly exceeded $4.5 billion after Argentina's President Javier Milei announced via X that the coin's project would focus on stimulating the Argentine economy by funding small businesses and ventures.

The token attracted over 40,000 crypto addresses, driving prices upward. However, the surge was short-lived, as insiders swiftly sold off large quantities, causing the market cap to plummet by 90%. President Milei later removed his post, stating he lacked detailed knowledge of the project, and decided against further promotion. By then, the financial damage was irreversible.

Critics labeled the episode an international embarrassment. Opposition parties have even threatened to pursue impeachment against Milei.

Nansen's report indicated that 70% of wallets trading LIBRA from February 16th to 18th incurred realized losses, likely driven by the initial excitement from Milei's endorsement.

The number of unique token holders dropped from over 50,000 on February 14th to 35,770 by February 18th. Notably, two wallets that transacted the token within a brief span on February 14th profited over $5.4 million, illustrating the rapid and volatile nature of such investments.

Disclaimer: The information provided in this article is for educational purposes only and should not be considered financial or legal advice. Always conduct your own research or consult a professional when dealing with cryptocurrency assets.