A recent incident involving Argentina’s LIBRA altcoin has resulted in substantial financial damages for its participants. Blockchain analysis company Nansen reported that a staggering 86% of investors experienced losses totaling $251 million, while the fortunate few managed to gain only $180 million. This situation serves as a stark reminder of the inherent risks tied to altcoins that are associated with political figures.
What Sparked the Initial Surge?
The LIBRA coin drew notable attention when it launched on the decentralized platform Meteora, based on the Solana blockchain. A promotional message from Argentine President Javier Milei triggered an explosive increase in the coin’s value, as he claimed the initiative would boost the country’s economy and aid small enterprises.
How Did the Price Drop Affect Investors?
Despite the initial surge, the market quickly turned when insiders began unloading their holdings. Within hours, LIBRA’s market capitalization plummeted by 90%, leaving many investors in shock. Following this drastic fall, President Milei retracted his earlier claims and denied any prior knowledge of the project’s details, leading to a political uproar and calls for his resignation.
– 70% of wallets trading LIBRA between February 16-18 sustained losses.
– Over 50,000 investors on February 14 dwindled to 35,770 by February 18.
– A handful of investors capitalized on the surge, with one pair netting $5.4 million by trading within less than an hour.
The developments surrounding the LIBRA altcoin highlight the speculative nature of meme coins, emphasizing the necessity for caution among those considering investments linked to political endorsements or celebrity figures.
