A recent scandal involving a meme coin has affected the popularity of Argentina’s libertarian President Javier Milei and complicated his attempts to form political connections as the country approaches its congressional midterm elections. Milei, who was elected in a surprising victory in 2023, had vowed to dramatically cut public spending. He even gave a real chainsaw as a gift to billionaire Elon Musk. However, he stirred controversy when he made a post on X (formerly Twitter) supporting a new cryptocurrency called Libra.
Following Milei’s endorsement, the value of Libra shot up to $5, only to plummet back to around $1 just hours later. This rapid change led to accusations of a “rug-pull” scam, where a prominent figure promotes a financial asset for selfish reasons, inflating its price only to sell it for a profit. In response to the backlash, Milei deleted his post and suggested that he had been misled, denying any personal connections to the cryptocurrency. A federal judge is now looking into the launch of Libra and whether Milei played any role in it.
Milei’s early efforts to improve Argentina’s struggling economy included tough austerity measures, but many voters appreciated his direct language and his goal of dismantling the corrupt political system he calls the “caste.” Unfortunately, the recent cryptocurrency incident is beginning to damage that support. According to Shila Vilker, head of the Buenos Aires polling company Trespuntozero, the incident has harmed Milei’s credibility, with 53.1% of Argentines expressing distrust in him related to the scandal.
Despite this, some polls show that Milei’s overall approval only dropped slightly. However, an increasing number of people—46.6%, up from 36.2%—now view him negatively. This has raised alarms as Milei seeks to strengthen his position in Congress and form alliances with more mainstream conservative politicians to expand his libertarian party. Vilker pointed out that the Libra situation has begun to alienate his voter base, giving ammunition to the left-leaning opposition.
Meme coins, like Libra, are new cryptocurrencies that often thrive on internet fads and personalities. They can skyrocket in value before crashing dramatically, leaving early investors with huge profits while most other investors face losses. Notable examples include Dogecoin, a dog-themed coin that surged in popularity after Elon Musk tweeted about it in 2020.
Milei’s post about Libra reached his 3.8 million followers, urging them to buy into the coin before its eventual decline. The government insists he was tricked and did not profit from the situation. A source close to Milei stated, “If anyone has been scammed, it is Milei.”
Marina Acosta, a communications director at a local consultancy, mentioned that the real issue lies with moderate voters who previously supported the government but now feel only a weak connection to Milei and his libertarian views. According to a teacher, many people no longer see Milei as different from other politicians and now view him as part of the same political system he has criticized.
Despite these challenges, sources indicate that Milei’s party, La Libertad Avanza, has emerged as the leading right-wing faction, taking over the position of being the main conservative party in Congress. The Peronist opposition, traditionally the dominant force in Argentine politics, is experiencing its own divisions. The governor of Buenos Aires province recently launched a new political group, indicating internal conflicts.
In conclusion, the upcoming elections are crucial for Milei, as his party seeks to maintain influence in a politically volatile environment. With internal division within the opposition, Milei might still have a chance if he can regain the trust of voters and solidify political alliances.