Argentine President Javier Milei made headlines by promoting a Solana-based memecoin called LIBRA on his X account. The token’s market cap skyrocketed to over $4 billion within minutes, but then dropped by 99% shortly after. Milei quickly deleted his post, claiming he was misled. Meanwhile, a LIBRA developer who was also behind Melania Trump’s memecoin admitted to artificially inflating both tokens using insider funds. According to Analyst, Memecoins Are the Reason Why Altcoin Rally Never Started While this incident mirrors countless other memecoin schemes that have cost retail investors millions, crypto analyst Simeon Koch argues that it points to a deeper problem plaguing the altcoin sector. In a detailed analysis, Koch explains why smaller cryptocurrencies have been underperforming for months. According to Koch, the real problem is not just memecoins, but the culture of manipulation in the altcoin space. Many projects prioritize attracting new retail investors to dump overvalued tokens, rather than focusing on sustainable innovation. The current cycle has reached extreme levels of speculation, with little effort to hide the lack of real development. Memecoins initially emerged as a response to the dominance of venture capital-backed crypto projects. These institutional investors typically purchase large portions of a token in private sales, only to abandon them to individual investors once public trading begins. Memecoins promised a fairer alternative, but they fell into the same cycle of insider manipulation. Related News: Bitcoin is Recovering - What's Driving the Rise? What is the Latest Liquidation Data? The collapse of LIBRA epitomizes this trend. While traditional crypto projects at least publicly disclose their large token holdings, memecoin insiders are secretly accumulating supply, artificially inflating prices, and dumping at their peak, leaving ordinary investors with worthless assets. The impact of these initiatives is clear: retail investors have fled, and even experienced crypto investors are losing faith in the market. The over-reliance on memecoins as a quick profit tool has damaged the credibility of the space while alienating new participants. The developer of LIBRA admitted in an interview that the teams behind memecoins actively manipulate prices to maintain trading volume. Such tactics have become an open admission in Solana circles. Koch warns that focusing on short-term gains instead of real benefits leaves the market directionless. While the current state of altcoins may seem bleak, past market cycles suggest a turnaround is possible. A bottoming out of sentiment often precedes major rallies. Koch suggests the memecoin craze may be necessary to shift the focus back to fundamentally strong altcoin projects. For crypto to regain momentum, the industry needs to rebuild trust by prioritizing real innovation over short-term speculation. Otherwise, the same pattern of new investors coming in, being exploited, and leaving disappointed will repeat itself, making it difficult for the market to sustain long-term growth. *This is not investment advice. Continue Reading: Why Altcoins Can’t Make the Expected Mega Bullish Move? Analyst Reveals the Main Reason
