A scandal involving a meme coin and subsequent investigation have tarnished the popularity of Argentina's libertarian President Javier Milei and complicated his efforts to strengthen political ties ahead of the upcoming congressional midterm elections.
Upon winning a surprise election in 2023 with promises of drastic budget cuts, Milei faced criticism for endorsing the new token, Libra. Following his social media post on X, the value of Libra briefly soared to $5 before plummeting to $1, leading to accusations of a "rug-pull" scheme.
Milei's administration stated that the President was misled and denied any financial interests in the cryptocurrency. An official investigation has been launched to examine the token's launch and Milei's possible involvement.
While Milei initially gained support for his blunt style and vows to root out corruption, the crypto incident has damaged his credibility. Polls conducted by Trespuntozero and Giacobbe & Asociados revealed a decrease in trust towards Milei, with a notable increase in negative perceptions of the President.
The decline in Milei's approval ratings raises concerns as he aims to solidify his position in Congress by forming alliances with conservative partners and expanding his libertarian party. The "Libra case" has provided an opportunity for opposition parties to capitalize on the situation.
Meme coins, like Libra, capitalize on internet trends and have a history of volatile price fluctuations. Milei's involvement in promoting Libra to his large following on X contributed to its sudden rise and fall. Government sources assert that Milei was a victim of deception and did not profit personally from the incident.
Marina Acosta from Analogías emphasized the challenge Milei faces in retaining support from middle-ground voters who may question his party's ideology. Some citizens now perceive Milei as part of the political establishment he once criticized.
The government views Milei's La Libertad Avanza as the leading right-wing faction, overshadowing the center-right PRO, which remains a key but somewhat strained ally. The fragmented Peronist opposition, including Buenos Aires province Governor Axel Kicillof, is attempting to unify to counter Milei's momentum.
In the political landscape of Buenos Aires, a united front from opposition parties may pose a threat to Milei's camp, especially if divisions between La Libertad Avanza and PRO persist.