Politically Endorsed Meme Coins See Dramatic Rise and Even Steeper Crash, Fueling Controversy

A cryptocurrency tied to Argentine President Javier Milei saw a dramatic rise before an even steeper crash, fueling controversy around politically endorsed meme coins.

A cryptocurrency touted by Argentine President Javier Milei saw a spectacular rise followed by an even steeper crash, sparking controversy around politically endorsed meme coins. The token, dubbed Libra, launched last Friday, just days after US President Donald Trump and First Lady Melania Trump unveiled their own cryptocurrencies.

Libra's sudden collapse is part of a growing wave of politically linked tokens, where coins gain attention thanks to high-profile endorsements but quickly implode. Central African Republic President Faustin-Archange Touadera also joined the meme coin scene this month with a token of his own.

Meme coins often see massive spikes before plummeting. Some, like Dogecoin, manage to maintain relevance thanks to cult followings and endorsements from figures such as Elon Musk. Others vanish overnight, leaving investors with devastating losses.

$4.5 Billion Valuation to 95% Crash in Hours

The Libra token, promoted by Milei in a now-deleted post on X, briefly surged past $4.50 on Friday. Within hours, its value crashed by more than 95%. Blockchain analytics firm Nansen reported that while most traders incurred losses, 34 "insider" accounts managed to secure $124.6 million before the collapse.

Authorities reacted swiftly. A federal judge in Argentina launched an investigation into the token's release and Milei's possible involvement. Argentina's stock market initially dipped but recovered quickly as investors downplayed the likelihood of impeachment. Crypto firm Nansen summed up the disaster in a report:

“What started with a presidential endorsement and a $4.5B valuation quickly unraveled as “insiders” took profits, retail got burned, and key backers distanced themselves.”

Trump's Token Also Sees a Hit

The chaos wasn't confined to Argentina. Donald Trump's meme coin, which saw a meteoric rise to over $70 within two days, has since dropped to around $17. Much like Libra, Trump's coin initially surged on hype before collapsing, leaving many retail investors facing financial ruin.

Opinions among crypto analysts are divided when it comes to political meme coins. Thomas Puech, CEO of Miami-based crypto fund INDIGO, acknowledged both the risks and opportunities tied to the trend. He noted that while widespread attention fuels market activity, many inexperienced traders faced heavy losses after misjudging the volatility.

Coinbase CEO Brian Armstrong also slammed the frenzy, warning of potential market manipulation:

“Some memecoins have clearly gone too far lately, to the extent people are insider trading. This is illegal, and people should understand that you will go to prison for this.”

Meme Coins or a Rigged Casino?

The wave of political meme coins has led to billions in investor losses, with tokens linked to world leaders such as Trump, Milei, and Touadera seeing massive price crashes. What was once viewed as a fun, speculative investment has started to resemble a rigged casino, eroding trust across the crypto landscape.

“Political Memecoins Killed Trust. Last month, 3 world leaders launched memecoins — every single one rugged. TRUMP & #MELANIA dumped on retail. LIBRA wiped out $4.4B in market cap. CAR drained millions from investors. Memecoins were fun, but now they feel like a rigged casino,” lamented one frustrated crypto trader.

This is not the first time meme coin investors have been burned. A high-profile trader, Dave Portnoy, promoted his meme token, GREED, which saw a dramatic collapse.

After accumulating 35.79% of GREED's total supply, he sold everything in a single move, crashing the price by 99%. Despite the wipeout, Portnoy managed to walk away with a $258,000 profit, while some investors lost over $100,000 in a matter of hours.

With over 3 years of crypto writing experience, Bena strives to make crypto, blockchain, Web3, and fintech accessible to all. Besides cryptocurrencies, Bena also enjoys reading books in her spare time.

Julia Sakovich on X