# MileiMemeCoinControversy

Is it a scam? How does memecoin, the cryptocurrency promoted by Milei, work

Memecoin, the controversial cryptocurrency promoted by Argentine President Javier Milei, is a digital asset with viral behavior and high volatility. Therefore, anyone who chooses to acquire it must be aware of the risks involved. "It cannot be considered an investment," says José Cassiolato, partner at RGW Investimentos.

The problem is when those who hold the majority of the currency put it up for sale all at once. That's what happened with $Libra, the cryptocurrency promoted by Milei. The value of the memecoin reached US$$ 4,978 (R$$ 28,375, at the current exchange rate) after the Argentine president's propaganda. With the surge, the developers of the virtual currency began to sell their assets and encouraged the downfall of $Libra.

A similar case occurred with the memecoin of an American influencer. Influencer Haliey Welch launched a cryptocurrency after a meme of hers went viral. The cryptocurrency quickly reached a value of US$$ 500 million, only to lose more than 90% of its value shortly thereafter.

In these cases, the creators of the cryptocurrency are the main beneficiaries. They only make a small percentage of the virtual coins available at the beginning. As demand increases, they put the remaining assets into circulation. This happens when a few people hold a large portion of the asset in circulation. For Cassiolato, these are cases of fraud that should be analyzed by the government. "It's like insider trading and needs to be regulated," he says.

Even so, memecoins are not necessarily pyramid schemes. Even though acquiring this type of cryptocurrency involves extremely high risks, they are not necessarily financial pyramids, in the view of analysts interviewed by UOL. "Simply raising or lowering the price of an asset is not in itself a pyramid scheme," says Gotke.