Celebrity-Backed Memecoins Under Fire as Market Fatigue Grows

The dramatic collapse of Libra, a Solana-based memecoin linked to Argentine President Javier Milei, has once again exposed the dangers of celebrity-endorsed crypto projects.

Similar high-profile failures, including memecoins associated with Donald Trump, Melania Trump, and Binance founder Changpeng Zhao, have raised concerns about the speculative frenzy dominating the market.

Marcin Kazmierczak, COO of Redstone, criticized the growing trend of memecoin speculation, arguing that it undermines serious blockchain innovation. He lamented that while countless teams are working on projects with real-world applications, their efforts are overshadowed by what he described as “short-term, scam-driven schemes.” Kazmierczak pointed to research suggesting that every dollar funneled into gambling-like crypto speculation diverts funds away from sustainable investments.

Libra’s rise and fall were particularly extreme. After receiving Milei’s backing, the token’s market capitalization skyrocketed to $4.5 billion. However, the excitement quickly evaporated when eight wallets tied to the Libra team offloaded $107 million worth of tokens, causing a catastrophic 95% crash. The fallout extended beyond crypto, triggering a 5.7% decline in Argentina’s S&P Merval stock index.

The sudden collapse has reignited debates over insider trading and market manipulation, with industry experts renewing calls for stricter regulations. Some analysts suggest that repeated memecoin failures could drive investors toward more stable sectors like DeFi, Crypto x AI, and SocialFi.

Kazmierczak believes that continued market fatigue over such incidents may ultimately push the industry toward more sustainable developments. Meanwhile, Ilya Paveliev, co-founder of Arete Capital, dismissed the notion of an incoming altcoin season, arguing that liquidity remains locked in spot Bitcoin ETFs while speculative trading benefits bad actors.