Emily Walker
A recent study has unveiled a concerning trend regarding the link between memecoins and social media influencers on X (formerly Twitter), highlighting a significant rate of failure.
According to research by Coinwire, around two-thirds of cryptocurrency influencers on X have endorsed memecoins that have lost all value.
Minimal Success Rate
Research indicates that merely a tiny fraction of memecoin promotions saw substantial growth, with just 1% of them achieving a tenfold increase in token value. This figure is particularly discouraging given the considerable hype generated by influencers.
Coinwire reports that over 76% of X influencers promoted now-defunct memecoins. An analyst pointed out that these findings highlight the grim reality about memecoins.
The cryptocurrency platform examined upwards of 1,500 memecoin promotions by 377 influencers on X and assessed their performance.
Paid KOLs: How Twitter Influencers Promote Dead Tokens and Profit While You Lose
1/ The hype around memecoins hides a harsh reality: 76% of influencers promote dead tokens, and 86% of memecoins lose 90% of their value in just 3 months.
Let’s dive into the data.
2/ It… pic.twitter.com/CCy6Tnc7pt
— Keto (@keto_studio) November 25, 2024
More Effective with Smaller Audiences
Coinwire’s study found that smaller influencers tended to perform better than their larger counterparts, attributing this success to more authentic promotional strategies that yielded greater financial returns.
According to their findings, influencers with fewer than 50,000 followers saw better performance, reporting a 25% positive return after just a week. This figure surged to over 141% after three months.
In contrast, the research highlighted that influencers boasting larger followings struggled significantly with promotional success.
Coinwire noted that influencers with over 200,000 followers experienced the poorest outcomes, with their promotional efforts leading to a 39% negative return after one week, which worsened to an 89% negative return after three months.
According to a Coinwire research report, 76% of cryptocurrency influencers on the X have promoted Memecoins that have now returned to zero, only 1% of the promoted Memecoins have achieved a tenfold increase, and 80% of the promoted Memecoins have plummeted by 70% in a week.… pic.twitter.com/EWmmymAS2N
— Wu Blockchain (@WuBlockchain) November 25, 2024
Researchers suggest that one reason for the poor performance of larger influencers stems from their tendency to prioritize financial incentives over the quality of the projects they promote.
Coinwire states that larger influencers average earnings of $399 for each promotional tweet, provided it meets a minimum of 15,000 views, benefiting financially while resulting in losses for memecoin investors.
This data raises important questions about the role of influencers in the promotion of digital currencies, as many of them appear to have misled investors.
Failure of Influencer-Endorsed Memecoins
Coinwire’s findings reveal that approximately 86% of memecoins that influencers promoted lost 90% of their value after three months.
Furthermore, 80% of the tokens promoted by influencers dropped 70% in value after just one week, and within a month, 90% saw an 80% decrease. A staggering 86% of these promoted memecoins faced nearly a tenfold loss after three months.
The report concludes that achieving a tenfold increase through influencer-backed memecoins is virtually impossible, with only 1% of these promotions attaining such success.
Featured image from DALL-E, chart from TradingView