Milei's Libra Endorsement Sparks Wild Price Ride, Leaves Investors in the Red

Libra, a cryptocurrency, experienced a significant price drop four days after Argentina's President Javier Milei promoted it on his social media platforms. The token's value surged to $4.55 following Milei's endorsement, but it subsequently plummeted, leading to substantial losses for many investors.

The sudden price volatility resulted in a collective loss of $251 million for some investors, while others managed to secure profits totaling $180 million. A report by Nansen Research highlighted the financial consequences of these fluctuations. The price movement wiped out most of the profits made during the time frame, leaving investors frustrated and accusing the project of being a scam.

Milei's tweet endorsing Libra as a means to help the Argentine economy and fund small businesses sparked a speculative frenzy. However, the token's creator, Hayden Davis, later dismissed the coin as a mere meme coin, causing investors to become wary and leading to a bear market. This shift resulted in massive losses for many investors, with around 70% of wallets holding Libra experiencing losses by February 18th.

Despite the widespread losses, some traders managed to record substantial profits. Two wallets that participated in the Libra action sold their holdings within a short period, recording profits of $5.4 million and $5.1 million, respectively. However, the majority of investors were left with significant losses, leading to accusations of scamming against Milei and the Libra project.

In response to the backlash, Milei deleted his post promoting Libra, claiming that he was unaware of the project's details. The incident serves as a reminder of the risks associated with investing in cryptocurrencies, particularly those with high price volatility and uncertain long-term prospects.