The spectacular rise and crash of Argentina’s LIBRA memecoin was just the latest in a long history of crypto-driven financial frenzies. Within hours, the token rocketed to a $4.5 billion market cap before insiders dumped it, wiping out retail investors and turning the episode into a political and economic scandal. Many are calling this the death knell for the memecoin craze, arguing that retail traders have finally learned their lesson.
But they haven’t. And they won’t.
LIBRA won’t be the last of its kind. It’s just another chapter in a recurring cycle that defines not only memecoins but much of the altcoin market. Every cycle brings in new speculators who don’t understand the mechanics at play, and every cycle ends with the same result—money flowing from naive retail investors into the hands of insiders. This is how the crypto casino has been designed to function.
The Memecoin Cycle: Rinse and Repeat
Memecoins like LIBRA represent the most extreme and blatant form of retail extraction. They offer no utility, no innovation, and no long-term value proposition—just hype. But that’s all they need. Every cycle, a new class of traders enters the space, hoping to catch the next Dogecoin, SHIB, or PEPE before it explodes. They don’t realize that these massive gains are the exception, not the rule.
The LIBRA debacle follows the exact same script that we’ve seen with countless memecoins before:
- A celebrity or politician gets attached to a coin. Sometimes it’s intentional, sometimes it’s opportunistic insiders exploiting a moment.
- Hype drives the price up rapidly. Social media floods with posts about how this is “the next big thing.”
- Insiders dump their holdings. Whether it’s VCs, influencers, or developers, the people who got in early sell off, making millions while new buyers get wrecked.
- The price crashes, and the cycle repeats elsewhere. A few weeks or months later, another memecoin emerges, and the process begins again.
The key reason this keeps happening? There’s always a fresh supply of people who don’t know better.
It’s Not Just Memecoins—Most Altcoins Are Just as Predatory
Memecoins might be the most obvious scams, but many supposedly “legitimate” altcoins operate on the exact same extractive model. The difference? They disguise their schemes behind complex whitepapers, flashy partnerships, and promises of groundbreaking technology that never materializes.
Here’s the typical altcoin playbook:
- Overhyped promises – Teams claim they’re building revolutionary blockchain solutions, luring in retail investors who believe in the vision.
- Massive pre-mines and insider allocations – The majority of the supply is given to founders, VCs, and insiders before public trading even begins.
- Sky-high fully diluted valuations (FDV) – The circulating supply is kept artificially low, creating an illusion of scarcity while insiders hold the vast majority of tokens, waiting for the right moment to sell.
- Token unlocks as controlled exit liquidity – Insiders stagger their token unlocks so they can dump onto retail traders without crashing the price all at once.
- Exchange listings as liquidity events – The moment a big exchange like Binance or Coinbase lists the token, insiders sell into the new influx of buyers.
- Perpetual delays and roadmap pivots – Many projects overpromise and underdeliver, using vague technical obstacles to justify why their tech isn’t live yet.
The result? A slow-motion rug pull. Even projects that aren’t outright scams still end up being wealth extraction vehicles for early investors.
Retail Investors Always Learn Too Late
The reason LIBRA, and many other crypto scams, will happen again is simple: crypto is fueled by new money constantly entering the space. Each cycle, people who got burned leave, but a fresh wave of traders—often younger, less experienced, and eager to get rich quick—steps in. They don’t know about the past scams. They only see the handful of success stories and think, “This time, I’ll get in early.”
The fundamental issue is that the mechanics behind these scams aren’t well-known outside of crypto-native circles. While seasoned traders can spot a pump-and-dump from a mile away, new investors don’t understand:
- Fully diluted valuations vs. circulating supply
- How token unlock schedules work
- The role of VCs and insiders in dumping liquidity
- How centralized exchanges enable exit liquidity for insiders
By the time retail traders realize what’s happening, it’s too late. The money has already been extracted.
Will This Ever Change?
So, what stops this cycle? Realistically, nothing—at least not in the near future. As long as:
- People are looking for easy money
- New traders keep entering the market
- There are no meaningful regulations
Then the crypto casino will keep operating as it always has.
The only real shift would come from either:
- Massive regulation – Governments cracking down on predatory tokenomics (unlikely anytime soon).
- A permanent retail exodus – If enough people finally recognize crypto as a losing game, inflows could dry up (again, unlikely).
- Genuine crypto utility taking over – If blockchain technology actually delivers real-world use cases, speculation could fade (possible, but still far off).
Until then, expect another LIBRA. Expect another cycle of scammy altcoins. Expect more people to lose money. And expect insiders to keep walking away with millions.
Because the game never really ends. It just changes form.
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