๐ฏ Disastrous Launch: How Libra Caused $4.4 Billion Loss From the Memecoin Market?
๐ The cryptocurrency market experienced one of the biggest financial shocks in its history after the launch of the Libra coin, which was promoted by Argentine President Javier Milei. Instead of achieving the expected success, the launch caused a catastrophic loss of more than $ 4.4 billion in market value within a few hours. What happened was not just a traditional price drop, but a sharp collapse that showed clear signs of market manipulation, raising questions about whether this was one of the largest scams (Rug Pull) in the history of meme coins.
๐ฏ The shocking beginning: A sudden announcement raises doubts:
๐ The story began when Argentine President Javier Milei made an unexpected announcement about the launch of the $LIBRA coin, claiming that it would help boost the Argentine economy by financing small businesses. It wasnโt long before investors began to question the credibility of this announcement, especially since it came out of the blue without any prior preparation.
๐ At 5:01 p.m. New York time, excitement began to build, with speculation rising about whether the launch was real or just a hack of the presidentโs account. Minutes later, Argentine political figures confirmed the launch, sending investors rushing to buy the new currency.
๐ฏ Warning signs that no one paid attention to:
๐ Despite the great enthusiasm around the new currency, some worrying signs have emerged that many have ignored:
1.ย ย ย ย ย Suspicious website:
- The official website claimed that the currency was intended to support small businesses, but it was nothing more than a page containing a Google Form to apply for funding, which raised doubts about its seriousness.
- The site was created just a few hours before the announcement, and the domain had only been registered for one year, without any reliable information about the owner or the team behind the project.
2.ย ย ย ย ย Clear market manipulation:
- According to Bubblemaps, $87.4 million was withdrawn by insiders during the first three hours of trading.
- 82% of the total currency was owned by one group, meaning the distribution was completely unbalanced, with no details about the tokens or distribution mechanism.
3. Liquidity pool fraud:
- Instead of selling directly, early investors simply added $LIBRA to liquidity pools on the Meteora platform, allowing them to indirectly withdraw USD ($USD) and Solana ($SOL).
- This plan enabled key stakeholders to make profits without their sales directly affecting the price at first, thus deceiving other investors.
๐ฏ Rapid and devastating collapse:
๐ As the price of $LIBRA rose rapidly, the market cap reached $4.6 billion in less than an hour. But at 5:40 p.m., the coin peaked and began a sharp decline. Within minutes, the coin lost more than 90% of its value, resulting in huge losses for investors who entered the market late.
๐ The impact was severe, with some large investors making over $4 million before the market crashed. Only 27% of the trades were sells, suggesting that big players were selling their holdings to retail investors who were unaware of what was happening.
๐ฏ Milli is falling and the market is bleeding:
๐ Hours after the chaos, Javier Miley deleted his original post and claimed that he was unaware of the details of the project, confirming that he stopped supporting the coin as soon as he learned the truth. But the damage was already done, as the market cap of $LIBRA collapsed from $4.6 billion to just $200 million.
๐ The losses did not stop at this coin only, but extended to the entire memecoin market, as the $TRUMP coin witnessed a decrease of more than $500 million due to the withdrawal of liquidity from the market. By the end of the day, the total losses in the memecoin market had exceeded the $6 billion mark.
๐ฏ Is this the end of meme coin?
๐ What happened with $LIBRA is not just a passing incident, but a serious warning for cryptocurrency investors. This incident showed that cryptocurrencies backed by celebrities and politicians can be a double-edged sword, as they can generate huge gains, but they also carry huge risks.
๐ Weโve seen how the launch of $TRUMP caused similar volatility before, but $LIBRA could be the worst scam yet. As similar projects continue to launch, itโs imperative that investors exercise caution and carefully scrutinize the details of any new project before investing in it.
๐ฏ Lessons learned from the resounding collapse:
1.ย ย ย ย ย Transparency is crucial:
- Investors should look for projects with clear details, including the tech, founding team, and distribution mechanisms.
2.ย ย ย ย ย Avoid suspicious projects:
- Any currency promoted by political or famous figures without sufficient details should be treated with extreme caution.
3. Research before investing:
- It is essential to check different sources of information and verify credibility before making any financial decision.
๐ Ultimately, $LIBRA experienced one of the fastest collapses in cryptocurrency history, with billions of dollars wiped out in just a few hours. While this event may not be the end of the memecoin era, it is certainly a harsh lesson for investors to learn from not falling victim to projects that lack transparency and credibility.
