Prior to the emergence of the so-called “cryptogate scandal”, Javier Milei’s first year as President of Argentina had been going well. Elected against a dire economic backdrop – with inflation running at 250%, and the country in recession, the firebrand libertarian certainly had his work cut out for him. The challenge was compounded by his outsider party – “La Libertad Avanza” (Liberty Advances) having fewer than 10% of the seats in the Argentinian Senate, requiring Milei to make deals with political opponents he had previously referred to as “parasites” in the run-up to the 2023 presidential election.
Against all odds, Milei’s first year was a qualified success. He enacted his promised “shock therapy” austerity programme, slashing state spending, although it was not without its victims, as unemployment spiked, poverty rose, and the country frequently witnessed major protests over budget cuts.
However, the monthly inflation rate in January 2025 dropped to 2.2%, the lowest since mid-2020, and Argentina ran a fiscal surplus in 2024 for the first time in 15 years. The economy is forecast to grow by 5.5% this year by Spanish bank BBVA, by far the fastest expanding among the major economies in Latin America. And, perhaps most surprisingly of all, he managed to get important pieces of legislation passed, including the Large Investment Incentive Regime (RIGI, by its Spanish initials), designed to attract foreign investment through tax breaks and currency exchange advantages for investments worth more than $200 million.
The cryptogate scandal threatens to take the shine off such progress. It unfurled on 14 February, as Milei posted on X endorsing a new cryptocurrency, ‘$Libra’, which would allegedly provide funding for small Argentine businesses and startups. The president’s endorsement of the coin sent its price skyrocketing, from $0.2 per token to $5.54. However, around an hour after Milei’s tweet, the coin’s price dropped 70% to $1.44, and Milei proceeded to delete his post. While the founders of the coin reportedly made around $100 million in profit, thousands of smaller, mostly Argentine investors, lost around $250 million.
While supporters of Milei have defended his actions as naïve, critics have alleged that Milei’s sister Karina, widely regarded his closest advisor and gatekeeper, was paid by key figures behind $Libra to convince the president to endorse the coin. A criminal investigation into Milei’s actions is underway in Argentina, and press outlets have reported that the FBI and SEC in the US are expected to investigate Milei’s actions too.
That such a scandal occurred is not surprising – after all, Milei, like much of the modern populist right, runs a very active X (formerly Twitter) account, sometimes posting over one hundred times a day, often amplifying messages from unverified sources. However, his response compounded the criticism – rather than apologising to those who had lost money, he refused to take responsibility, instead casting the blame on those who had bought $Libra, stating “if you go to the casino and you lose money, you can’t complain”.
The lack of an apology has added to the initial outrage in Argentina over the president’s actions. Polling data suggests that nine out of every ten Argentinians is aware of the scandal, and that more than three quarters thought Milei had acted inappropriately. The data also showed an increase in those who had an unfavourable opinion of Milei – rising from 40% to 46%, while the percentage of those with a favourable opinion fell from 55% to 50%.
Despite the potential gravity of Milei’s actions, the scandal pales in comparison to those that engulfed his predecessors. The former president of Argentina, Alberto Fernandez (2019-2023), faces trial for allegedly threatening and assaulting his former partner after photos of the latter with a black eye and bruises were leaked. His predecessor, Mauricio Macri (2015-2019), was investigated for fraud in relation to Argentina’s record $44 billion bailout from the IMF, with allegations that some of the money was directly embezzled by senior members of the government.
Prior to them, the late Néstor Kirchner (2003-07) and his spouse Cristina Fernández de Kirchner (2007-15) ruled Argentina. Both were investigated in a case where associates embezzled over $1 billion from the Argentinian state. Cristina was sentenced to six years in prison for this in 2022, however her presidential immunity has protected her from going to prison.
Prior to the Kirchners, Argentina had five presidents in a catastrophic two weeks in 2001-2002, as the government restricted the amount of money people could withdraw from their accounts to avoid a bank run. The peso subsequently lost its 1-1 peg to the dollar, and widespread rioting and looting followed after the fifth President – Eduardo Duhalde – announced that all dollars held in the bank would be automatically converted to pesos, which had lost about 70% of its value. Argentina has not had a conventional financial system since then, and the most common form of saving has been to store dollars under one’s mattress.
The cryptogate scandal is not the first controversy that Milei has been drawn into. Campaigning on a furious anti-establishment, and anti-inflation message, in the run-up to the 2023 elections, Milei called the Pope a representative of the devil, accused Brazilian President Lula of being a corrupt communist, and stated that the Argentinian peso was worth less than “excrement”. That Milei won a convincing victory in those elections, obtaining 56% of the vote as a political outsider, reflects Argentinians’ tolerance to such antics providing they come with the hope of economic growth and lower inflation.
The October 2025 mid-term elections are crucial for Milei, not just to reduce his reliance on opposition parties for support of his measures, but also to consolidate his infant party into a legitimate long-term force in Argentinian politics, rather than a flash in the pan. The investigation into Milei’s actions is ongoing and could continue causing him political problems regardless of the outcome, as it will keep dominating the news cycle.
However, while in many countries, such a scandal could threaten to collapse an entire government, if Milei’s predecessors are anything to judge by, in Argentina it could well have little to no impact. Instead, as Bill Clinton’s 1992 election strategy stated, “it’s the economy, stupid”, and one year into his mandate, Milei has fulfilled on his promise to bring inflation under control.
Now comes the even harder part – translating the macroeconomic gains into tangible results for the Argentinian public. International markets are a fan of Milei – FDI in the country has increased, the country’s risk index has dropped, and its dollar bonds have performed well, mostly due to Argentina’s improved fiscal outlook following deep budget cuts.
Milei needs the promise of increased FDI and economic growth to translate to a real rise in wages relative to prices. The country has gone from being one of the cheapest developed countries in the world to one of the most expensive – it is second only behind Switzerland in the Economist’s ‘Big Mac Index’, and every day goods are becoming more and more inaccessible for the average Argentine.
The country has been on a downward trajectory since a 2018 run on the Argentinian peso, and in 2020 Argentines suffered a double blow of having one of the western world’s longest and strictest lockdowns, coupled with the economic collapse and runaway inflation that followed. If Milei is able to complete his promise of restoring the country to economic growth and, crucially, stability, the cryptogate scandal will be a mere footnote in an otherwise miraculous presidency.