The Argentine stock market was negatively affected by the LIBRA meme coin launch, leading to a 5% decline in the S&P Merval index. A lawsuit against President Javier Milei added to the market’s turmoil. Although there were initial gains, LIBRA’s value collapsed by 90% shortly after debuting, raising concerns about fraud and insider trading.
Argentina’s stock market experienced a significant jolt as the S&P Merval index fell 5% on February 17, following the launch of the LIBRA token, a meme coin associated with President Javier Milei. Although the index recovered by 2%, it remained lower than the previous week’s close. Speculative activities around a legal complaint against President Milei were believed to have influenced this decline, further complicating the market landscape.
The LIBRA token was introduced over the weekend through the Solana-based meme platform Pump.fun. President Milei had voiced his support for this initiative in a now-deleted tweet, suggesting it could benefit the economy and small businesses in Argentina. The domestic market had a heightened interest in sovereign-tied meme coins, spurred by the rapid success of U.S. President Donald Trump’s TRUMP token.
Despite initially recording a $4 billion peak, LIBRA’s value plummeted by 90% shortly after its debut. President Milei’s office has initiated an investigation into the meme coin, following allegations that he may have committed fraud amid the tumultuous launch. His spokesperson has denied any insider knowledge regarding LIBRA.
Kelsier Ventures CEO Hayden Davis, an advisor to President Milei, acknowledged that he participated in purchasing a substantial amount of LIBRA at its initiation. This practice, often criticized in the cryptocurrency community, raises suspicions of potential scams or fraudulent schemes. In an interview, Davis confirmed that he withdrew approximately $100 million from LIBRA’s on-chain liquidity, though he has stated he does not intend to profit from these funds and will instead discuss them with the President and his administration.
In a surprising turn, LIBRA experienced a surge of over 60% after President Milei redistributed a tutorial on purchasing the token, highlighting the unpredictable nature of meme-based investments in the current market.
In summary, the launch of the LIBRA meme coin and the subsequent legal challenges facing President Javier Milei have significantly impacted Argentina’s stock market. Despite initial enthusiasm, the volatility of meme coins leads to substantial financial risks, evidenced by LIBRA’s rapid decline in value following its introduction. Careful considerations and regulatory scrutiny are essential to safeguard investor interests and maintain market stability.
Original Source: crypto.news
