A recent report from Nansen Research highlights the massive financial consequences of the LIBRA token’s rapid price fluctuations. Between Feb. 14 and Feb. 18, 86% of traders incurred losses totaling $251 million, while a select few secured $180 million in profits.
The hype surrounding $LIBRA initially began when Argentina President Javier Milei endorsed the token on Feb. 14. The endorsement, made via a tweet at 22:01 UTC, triggered an immediate surge in price, peaking at $4.55 before swiftly plummeting. By Feb. 18, 70% of wallets trading LIBRA had realized losses, likely due to extreme price volatility.
Wallets making profits amid the chaos
Despite the widespread losses, some traders managed to make substantial profits. Two wallets that bought LIBRA at 22:01 UTC on Feb. 14 sold within 43 minutes, generating a combined $5.4 million in profit. One wallet, identified as HyzGo2, made $5.1 million in those brief 43 minutes.
Notably, media personality Dave Portnoy was among the high-profile traders who lost millions on the token. However, Portnoy later received a $5 million refund from the exchange, raising questions about the fairness of exchange responses to prominent traders.
According to Nansen, the rapid price fluctuations were largely attributed to Milei’s endorsement, which ignited a speculative trading frenzy. However, the situation worsened when the token was “rugged” by its creator, Hayden Davis, who dismissed it as a meme coin, leaving many investors with significant losses. Crypto.news reported that Milei also deleted his tweet following the backlash, stating that he wasn’t familiar with the project’s details.
On-chain data indicates that many of the profitable traders acted quickly. Of the 15,431 wallets that showed gains or losses exceeding $1,000, 2,101 wallets secured a total of $180 million in realized profits. Notably, 57 wallets executed profitable trades, with 37 making more than $1,000 in profit.
Additionally, 1,001 wallets are still holding the token with unrealized losses totaling around $11 million, while 71 wallets remain in profit, though significantly reduced to $0.54 million as of Feb. 18 at 8:00 AM UTC.
The impact on Solana and broader market sentiment
While the token initially surged, the 70% loss rate among wallets trading LIBRA between Feb. 16 and Feb. 18 further underscored its volatility. A significant contributing factor was Milei’s retweet on Feb. 17, which briefly caused another price spike before fully retracing within 24 hours.
Amid the turmoil, the Solana network, which underpinned LIBRA, saw a 16% decline in its price, reflecting the broader market impact. The volume of liquidity on Solana dropped from $12.1 billion to $8.29 billion, showcasing the ripple effect of the LIBRA fiasco.
