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The Rise and Fall of LIBRA: Nansen’s Report Reveals the Aftermath
A Rapid Rise and Fall
LIBRA, a cryptocurrency, debuted on Valentine’s Day, gaining instant traction after Argentine President Javier Milei appeared to endorse it in a social media post. The coin was framed as a financial tool to support small businesses in Latin America and to boost the country’s economy.
Its market cap quickly skyrocketed to an eye-popping $4.5 billion less than an hour after its introduction, but the joy was short-lived. Soon after, Hayden Davis, a key figure behind the project, dismissed it as a meme token, contradicting its initial branding. This kicked off a price plunge that erased much of the coin’s value, a situation that worsened when Milei took down his promotional post following increasing backlash.
The head of state has since distanced himself from the token, claiming he had no prior knowledge of its details and suggesting that his social media post had been misinterpreted.
Winners and Losers
A report by Nansen, an on-chain analytics platform, examined the aftermath of the LIBRA token and found that 86% of traders who bought the cryptocurrency collectively lost about $251 million, while a select group of winners walked away with at least $180 million in profits.
According to the report, two wallets bought and sold the asset in 43 minutes, raking in no less than $5.4 million. The biggest beneficiary in the fiasco reportedly walked away with $25 million, although the figure is disputed.
On-chain data suggests that some of the earlier traders, likely experienced snipers or automated bots, managed to exit before prices crashed, leaving retail investors to suffer most of the losses. Nansen’s analysis shows that only 2,101 wallets turned a profit, with more than 15,000 ending up in the red.
Of the losers, the 15 worst-performing addresses allegedly lost a combined $33.7 million, with the biggest realized loss coming from Barstool Sports founder Dave Portnoy.
Interestingly, despite its massive slump, some traders kept buying and selling LIBRA, especially after a February 17 Milei tweet briefly reignited interest in the cryptocurrency and pushed up its price by 125%. However, the coin retraced all the gains in the following 24 hours, ensuring that most of those who participated in that post-hype period suffered losses.
Per the report, there are over 1,000 wallets still holding the meme coin, with unrealized losses of about $11 million. Another 71 addresses are technically profitable, but their combined gains amounted to just $540,000 as of February 18.
Conclusion
The rise and fall of LIBRA serves as a cautionary tale about the risks involved in the cryptocurrency market. While some traders managed to profit from the token’s volatility, many others suffered significant losses. The report by Nansen highlights the importance of due diligence and thorough research before investing in any cryptocurrency.
FAQs
- What is LIBRA? LIBRA is a cryptocurrency that debuted on Valentine’s Day and gained instant traction after Argentine President Javier Milei appeared to endorse it in a social media post.
- What was the initial purpose of LIBRA? LIBRA was framed as a financial tool to support small businesses in Latin America and to boost the country’s economy.
- How did the market perform? The market cap quickly skyrocketed to an eye-popping $4.5 billion, but the price soon plunged, erasing much of the value.
- Who were the winners and losers? According to Nansen’s report, 86% of traders who bought the cryptocurrency collectively lost about $251 million, while a select group of winners walked away with at least $180 million in profits.
- How many wallets are still holding the meme coin? Over 1,000 wallets are still holding the meme coin, with unrealized losses of about $11 million.
- What is the current situation? The coin has retraced all the gains made after a February 17 Milei tweet and is currently trading at a significant loss.
