Libra memecoin collapse is ‘incredibly damaging to crypto as a whole’ says Redstone COO

The collapse of yet another memecoin endorsed by a high-profile individual has raised questions as to how long the crypto market will put up with such chaos.Last month, it was the rise and fall of Official Trump, a memecoin associated with the US President, as well as one for his wife Melania Trump. Last week it was memecoins inspired by Binance’s founder Changpeng “CZ” Zhou’s dog, "Broccoli." Over the weekend, it was a memecoin endorsed by Argentine President Javier Milei."This is incredibly damaging to crypto as a whole," Redstone COO Marcin Kazmierczak told The Block. "There are hundreds of teams dedicating their resources to building unique projects with real-world applications, yet their work is overshadowed by these short-term, scam-driven games. Studies show that every marginal dollar spent on gambling is a dollar taken away from long-term investment."Libra, a memecoin launched on the Solana blockchain, quickly gained popularity after Milei's endorsement, reaching a market capitalization peak of $4.5 billion. However, the excitement was short-lived. Just hours after the promotion, eight wallets associated with the Libra team liquidated $107 million worth of the token, causing a 95% crash in its value. This dramatic plunge led to allegations of insider trading and renewed fears of market manipulation. Early trading on Monday also saw Argentina's major stock index, the S&P Merval, drop by over 5.7%, reflecting the fallout from the president's involvement in the collapsed memecoin.Kazmierczak expressed concern that the fallout from the Libra collapse could have long-lasting negative effects on the industry’s trajectory, strengthening the belief among both regulators and the public that crypto is little more than a high-stakes gamble. He emphasized that the industry would be better served by quickly eliminating these short-sighted projects and refocusing on solid fundamentals."I think markets are becoming increasingly exhausted by these incidents—which, ironically, could be a good thing," Kazmierczak said. "As people grow tired of the constant rug pulls, we might see more attention shifting toward fundamentally sound developments like DeFi, Crypto x AI, and SocialFi. I actually see memecoins as a stress test for the infrastructure we’re building."Arete Capital founding partner Ilya Paveliev, claimed altseason has become a mirage for traders. “Altseason cycles have turned into sporadic seizures, with liquidity trapped in spot bitcoin ETFs. The barrier to token generation has lowered, and speculative activity has shifted on-chain,” Paveliev explained. “Now, insiders have the edge, and liquidity is being extracted through low key methods like insider airdrops and unlocked token emissions."Or as one crypto trader put it, "In 2025, I was promised altseason, and instead, I got crimeseason."Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.