February 18, 2025 - 6:15pm
Javier Milei is engulfed in a memecoin crisis. Last week, the Argentinian President recommended an obscure cryptocurrency called LIBRA. It shot up in value but quickly tanked, going from $5 valuation per coin to about $0.38. Milei has been accused of a “rug pull”, where the coin’s backers attract investors before pulling out and leaving the investors with worthless tokens. Argentina’s libertarian President has denied any wrongdoing and independently and immediately referred himself to the country’s parliamentary corruption watchdog.
Being caught up in this circus, however, does not look good. The whole scenario is tawdry. Barstool Sports mogul Dave Portnoy invested $5 million into LIBRA at its launch, lost it all when the coin tanked, only to be refunded personally by the coin’s founder, Hayden Davis. There have been even stranger revelations, with reports that someone who bought $5 million of LIBRA also bought $1 million of TRUMP when it launched and sold it for a huge profit before it fell in price. It is yet to be established who this player is, but a link between the coins has been made.
Crypto has always been a Wild West. But the advent of the memecoin — and its explosion in popularity over the last few months — has brought us into a whole new era of crude theatrics and rigged deals. It is a world where liquidity is constantly being recycled, where the self-licking ice cream cone has been perfected, and where certain favoured investors simply cannot lose even if they try.
So far, Milei’s contribution to the carnival seems to be limited to a single tweet — now deleted — in which he suggested the coin could be good for small businesses. The coin’s founder Hayden Davis had some well-placed Argentine collaborators, who in turn had a direct line into the President. Cleverly, it had been woven around one of his campaign slogans: “Viva la libertad”. It shows elegantly why the economic libertarians were daft to ever climb into bed with the crypto crowd.
In an interview with Coffeezilla, YouTube’s favourite scam baiter, Hayden Davis ties himself in knots with his sheer honesty. “It is an insider’s game,” he declares. “This is an unregulated casino […] It’s who loses last. It’s a game. Every single one of these is a game. My game was that some of these would turn into utility […] and I don’t think that at the current moment.”
There we have it: these are the people who mint these coins, their official spokesmen in the world, telling you to your face that there is fundamentally no way to price these assets.
Milei is probably the world’s most famous living economic libertarian. And in outline, the economic libertarian case for crypto is simple enough: a distributed ledger system nixes the need for a central bank — or any bank — to have a monopoly on the information of who-has-paid-who. By writing it on the blockchain, anyone anywhere can look up who owns a slice of a finite resource. (The “coin” in question is automatically self-limited by the sheer exponential cost of the electricity required to produce the next “block” on the “chain”.)
This has long been a sort of Philosopher’s Stone for anyone who believes that the divergence between the money supply and the underlying value of goods and services in the economy is the root of all evil — as Austrian School economists do.
Milei certainly believes this. The stories of how he began to read the works of Robert Nozick, Hans-Hermann Hoppe, Ludwig von Mises and Murray Rothbard have the full religious air of St Paul being banged off his horse. Almost all the medicine he is bringing to Argentina flows from the teachings of these economists.
No doubt the LIBRA coin was pitched to him on these libertarian terms. Yet in accepting that pitch, Milei shows a worryingly superficial understanding of his own favourite subject. Students of the Austrian School should be rigorously focused on the question of underlying value. What is backing this “currency”? Nothing. What are the incentives in this market? What is the utility of this as a product? Apart from secret untraceable transactions, not much. Beyond this, no further analysis is required.
LIBRA is a memecoin — essentially worthless “tokens”. But even Bitcoin, something designed more clearly around a use case, has always stumbled in the final analysis. In El Salvador, tough-on-crime President Nayib Bukele is experimenting with his own version of what you might call authoritarian-libertarianism. He has made Bitcoin legal tender, but its uptake is limited by three factors: the extreme volatility of the daily Bitcoin price, the slowness of transactions, and the artificial nature of the whole enterprise, in that Bitcoin often needs to be re-exchanged before it becomes useful.
Now, the memecoin flea circus has bitten Milei, as surely as if his enemies had planned it all along to discredit his project. Rather than following the path of untrammelled economic libertarianism, Milei and his allies should break free from the crypto-bro theatre.
Bitcoin has “stumbled” from 40k to 95k this last year. God forbid it should get up and run
Bitcoin is silly enough but if you’re stupid enough to buy into every random Crypto that launches I have some magic beans you can buy. Fools.
I like Millei alot and hope he suceeds. But anybody following get-rich quick tips from a radical individualist has to know it comes with a caveat. You bare the risk. There is no socialization of casino gambling risk. The entire premise behind being an economic libertarian is the freedom to participate in risk/reward transactions. You would think a true Libertarian would understand that “trusting the experts” is a fools game. Anybody that loses has only themselves to blame.
Libertarians can have their moments but I think they fall for ‘private’ scammers an awful lot thinking they’re sticking it to the state.
You see meme coins being created by pornstars. Maybe I just haven’t got the head for it but I can’t see how any of this is productive investment.
I hate to say, “I told you so,” but I knew this guy (carrying his economic books around to show people how smart he was) was being propped up. There were so many articles written about him without actually saying anything. It was clear he was being promoted as proof that economic libertarianism is the way forward—but it doesn’t work. He was amusing at first, but now he’s facing criminal charges. Of course, that’s not mentioned in the article. It is over. He was being used as a pawn to prove an economic style for US to follow but he failed and now his discarding started!
Libertarianism is just another word for small government, which is just another way of saying an oligarchy or an authoritarian leader or group. Same illusion, different label for each faction!
Essentially, all these systems operate on a spectrum of centralized vs. decentralized control, but in practice, they often converge—with power simply shifting from governments to private entities rather than truly dispersing.
Ugh. Inflation is down and there has actually been growth. We should all be cheering for JM because Argentina was an economic blackhole.
I’m all for Milei. What he’s done so far is positively remarkable. Everyone who lost money is responsible for their own actions.
Agreed but none the less it will be used to destroy him – he has many enemies.
Another crook, just like Trump and President Musk.
When will you simpletons ever learn?
Everywhere in the West the state has become parasitic, and nowhere more so than in Britain, where a welfare system that was supposed to provide a safety net for the poor has become a gravy train for a feckless middle class. Painful reform is now the only alternative to collapse. No society can go on indefinitely consuming more than it produces.
I agree with you, and as I’ve said many times, this feels like a divorce—like sinking into a dark hole. But as we know, life after disaster can sometimes be even better than what we started with. I believe Europe will rise from the ashes. It may not regain the power we once read about in textbooks, but it will still be a force to reckon with.
Right now, we are in pain, and the last thing we need is flashy, hollow figures like Milei, whose ideas are the equivalent of riding a horse when the world is looking for high-speed trains. We may no longer be the financial hub or the ideological powerhouse, but I’m confident we will lead in certain industries. For now, we just need to let the tides settle.
“It shows elegantly why the economic libertarians were daft to ever climb into bed with the crypto crowd.” Wrong. It shows that you should avoid meme coins and stick to the standard, primarily Bitcoin.
The author also makes a fatuous comment about Austrian economists about the root of all evil. Anyone who has actually read them know that this is false and that Austrian’s locate economic “evil” — to use the author’s term — in other places, such as interference with relative prices through various forms of fix fixing, as well as regulation, and so on.
Another error by the author. There is no “underlying value.” All value is subjective and determined by supply and demand. Every economist knows that — with the except of old school Marxists.