The collapse of Libra, a Solana-based memecoin backed by Argentine President Javier Milei, has once again highlighted the volatility and risks associated with celebrity-backed crypto projects.
The incident follows a series of similar crashes, including the Official Trump memecoin, Melania Trump’s token, and Broccoli, a memecoin inspired by Binance founder Changpeng “CZ” Zhao’s dog.
Redstone COO Marcin Kazmierczak criticized the growing speculative memecoin trend, calling it “incredibly damaging to crypto as a whole.”
“There are hundreds of teams dedicating their resources to building unique projects with real-world applications, but their work is overshadowed by these short-term, scam-driven games,” Kazmierczak said. “Research shows that for every dollar spent on gambling, a dollar is stolen from long-term investments.”
Libra’s meteoric rise and devastating fall were dramatic. Following Milei’s backing, the token’s market cap rose to $4.5 billion. However, excitement quickly turned to disaster when eight wallets affiliated with the Libra team liquidated $107 million, triggering a 95% price drop. The crash extended beyond cryptocurrency markets, with Argentina’s S&P Merval stock index down 5.7% in early trading today.
The crash has renewed concerns about insider trading and market manipulation, reinforcing calls for tighter crypto regulation. Some industry figures believe fatigue from repeated memecoin crashes could push the market toward more fundamentally sound sectors like DeFi, Crypto x AI and SocialFi.
“Markets are getting increasingly tired of these events, which ironically could be a good thing,” Kazmierczak said. “We could see a shift in focus to sustainable developments as people get tired of the constant rugpull scams.”
Meanwhile, Arete Capital co-founder Ilya Paveliev dismissed hopes for a traditional altcoin season, arguing that liquidity remains trapped in spot Bitcoin ETFs while speculative on-chain activity benefits scammers.
*This is not investment advice.
