Initial Launch and Market Performance
To say the launch of the Libra token, backed by Argentine President Javier Milei, was tumultuous would be an understatement. Initially soaring to a market capitalisation of $4.56 billion shortly after its debut, the token saw an astonishing collapse of 94% within just a few hours, leaving many investors shocked and out of pocket.
Insider Trading Investigation
Some insiders were able to exploit the situation, draining liquidity from the token and netting an alarming $107 million in just three hours.
It has come to light that eight wallets linked to the Libra team were responsible for this significant liquidity withdrawal, amassing 57.6 million USDC and 249,671 SOL. This swift action triggered a market panic, leading to the disastrous plummet you may have heard about. Analysts had previously warned traders about structural vulnerabilities, with reports indicating that a staggering 82% of the LIBRA supply was immediately sellable, raising concerns among savvy investors.
President Milei's Involvement
The launch of the Libra token was heavily supported by Argentine President Javier Milei, who initially promoted it through a now-removed post on X. This publicity helped the token reach a peak market cap of $4.56 billion shortly after its debut. However, following the dramatic decline, Milei shifted the narrative by blaming political adversaries for the token's downfall, asserting that they were trying to exploit the situation against him.
Market Analysis and Aftermath
One of the key issues that emerged post-launch is the market dynamics surrounding Libra, particularly the unexpected sell-off by insiders. Just three hours after its release, eight wallets linked to the team began liquidating their holdings, leading to a sharp drop in value.
To illustrate the severity of the situation, it is worth noting that Libra's market cap plummeted by 94%, sinking to just $257 million within 11 hours. This rapid decline raised alarms among investors, especially because 82% of the token supply was reportedly unlocked and immediately sellable, without adequate transparency about its tokenomics. Despite the lack of intrinsic utility, savvy traders might exploit the volatility of memecoins, as evidenced by a substantial profit made on another memecoin shortly after Libra's launch.
