- Investors lost $251M in a massive $LIBRA pump-and-dump, with 86% of wallets selling at a loss.
- Early snipers profited millions, while most retail traders faced devastating losses.
- Solana suffered a 16% liquidity drop amid the fallout from $LIBRA’s collapse.
The $LIBRA memecoin saw a dramatic trajectory on February 14, 2025, propelled by an endorsement from Argentina’s President Javier Milei. Marketed as a tool to support small businesses and Argentina’s economy, the token quickly surged to a $4.5 billion valuation.
According to the report by Nansen, within an hour of its creation, the price of $LIBRA rose to a record of $4.55 before later plummeting shortly afterwards. Project lead Hayden later downgraded the token to a memecoin later on, nullifying its initial purpose.
Milei’s quiet deletion of the promotional tweet was followed by a public backlash. To add to the controversy, blockchain investigator Coffeezilla revealed that Milei had no vested financial interest in the project. Nevertheless, the harm was irreversible as insiders took advantage of the early access to bank millions while leaving the retail traders at a significant loss.
Insiders Profit While Retail Suffers in $LIBRA Collapse
Data reveals striking disparities between winners and losers. Of the 15,431 wallets with a gain of greater than $1,000 or a loss of greater than $1,000, 86% lost, totaling $251 million. In contrast, 2,101 wallets made a profit of $180 million.
Certain wallets, presumably bots, entered and closed within minutes with profits of millions of dollars. One wallet, HyzGo2, made a gain of $5.1 million by itself. On the other hand, other wallets like XRfKhaCA made significant losses with inside contacts. dysphoria.sol lost a lot of money on $LIBRA while making a million on earlier tokens like $TRUMP and $MELANIA, implying inside information.
8bZsrR was the highest gainer and was reportedly making a profit of $25 million by dividing the holdings of $LIBRA among various wallets at the right time. Despite these staggering losses, the token saw trading activity days after its collapse. A Feb 17 repost by Milei saw the price increase 125%, although the bounce was later reversed, increasing the losses of the retail traders.
Impact on the Broader Crypto Market
The ripple effect of the collapse of $LIBRA was also experienced by its immediate investors. The blockchain that supported $LIBRA took a major hit with its liquidity reducing to $8.29 billion down from $12.1 billion. Although Solana was not directly affected, the fact that it supported the token raised fears about the destiny of memecoins.
The $LIBRA episode is a symptom of a recurring trend among crypto markets: inside profits, speculative mania, and destruction of the retail base. Besides financial loss, it also eroded trust and revealed vulnerabilities within a sector that is striving toward mainstream legitimacy. It is to be seen if this is a healthy correction of the market or a greater fatigue with memecoin rackets.