Memecoin: Is There a Future After the LIBRA Scandal?
The LIBRA Scandal and the Impact on Memecoin
The collapse of the memecoin LIBRA has raised concerns about the future of the asset. On February 14, Argentine President Javier Milei promoted LIBRA on social media, causing its value to skyrocket. However, the token collapsed shortly after, losing 95% of its $4.5 billion market cap, causing heavy losses for investors. Allegations of insider trading and fraud arose, although Milei denied any involvement.
The incident highlighted the risks in the memecoin market and prompted investors to rethink the transparency of the sector. Many industry experts have expressed skepticism about the long-term viability of memecoin without proper controls.
Venture Capitalists' Doubts
After LIBRA, Castle Island Ventures founding partner Nic Carter said memecoin is a market rife with manipulation. He said token launches often favor insiders, leaving retail investors at a disadvantage.
Dan Matuszewski, co-founder of CMS Holdings, predicted that legal repercussions are inevitable. He said LIBRA could result in jail time, given the political backlash it has caused. This could increase the risk for the entire, already volatile memecoin space.
Jed Breed, founder of Breed VC, stressed that memecoin is now an “insider’s game,” where those with inside information have the upper hand. He warned that it is becoming increasingly difficult to launch memecoins fairly, as big players quickly withdraw their funds, shortening the lifespan of memecoins.
Still, some experts believe that memecoins won't disappear completely. Steve Lee, co-founder of Neoclassic Capital, said the LIBRA crash was just a "healthy correction" that weeded out poor projects. He hopes that the memecoin market can evolve toward a more sustainable path.
Does Memecoin Still Have a Place?
Despite criticism, memecoins are still attractive to many investors because of their potential for huge returns. Breed believes that memecoins are attractive because they are a game of chance with a high rate of return. He predicts that the speculative demand will persist as long as investors look for big profit opportunities.
Lex Sokolin, co-founder of Generative Ventures, believes that memecoins can survive if the market structure improves. He stressed that community-driven projects, like Dogecoin, are likely to survive, while manipulated tokens will erode investor confidence.
Impact on Solana
Solana, the leading memecoin ecosystem, has also been affected by the LIBRA scandal. While Dan Matuszewski does not believe that Solana’s reputation has been directly damaged, he warns that if memecoin trading declines, the price of SOL could be impacted. Steve Lee also agrees that Solana may be under pressure in the short term, but the blockchain’s ecosystem is strong enough to maintain stability.
However, some experts warn that Solana needs to change its strategy. Sokolin criticized Solana’s “growth at all costs” approach, arguing that the blockchain is encouraging artificial activities such as fake trading volume and fake TVL. If Solana does not adjust, it could face greater challenges in the future.
The Future of Memecoins
The Meme GMCI Index, which tracks the performance of the top memecoins, has fallen more than 40% since the start of 2025. Solana memecoins have fallen even more, with the Solana Meme GMCI Index losing 61% of its value. This reflects the overall decline in the memecoin sector, especially after the LIBRA scandal.
However, some investors believe that if the market finds a new launch model that reduces manipulation and makes it more fair, memecoins can continue to exist. Improved transparency and increased regulation could help the sector grow more sustainably.
Conclusion
The LIBRA scandal has exposed major risks in the memecoin market, raising questions about the fairness and transparency of the asset class. While many experts are concerned about the long-term viability of memecoins, others believe that they can continue to thrive if their operating model is improved. In the future, changes in market structure may be the deciding factor in the fate of memecoins in the cryptocurrency ecosystem.
