Influencers get rich, meme coins die: Most bloggers’ advertising is ineffective

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As a seasoned crypto investor with battle scars from countless market ups and downs, I can’t help but feel a sense of deja vu reading this report from CoinWire. The meme coin landscape, fueled by influencers, has become a modern-day gold rush—one that leaves more investors panning for fool’s gold than striking it rich.

A significant number of meme coins, often hyped by influencers in X, tend to lose over 90% of their value within just three months, effectively making them obsolete.

The surge of interest in meme cryptocurrencies has drawn numerous well-known figures into endorsing these digital tokens as a simple path to financial gain. However, an analysis by CoinWire reveals the unattractive truth: most meme coins lack intrinsic worth, and many investors suffer substantial losses.

It appears that a distressing reality has emerged from our study: many popular meme coins turn out to be defunct, leading most investors to suffer substantial financial losses.

CoinWire report

To get a handle on the current state of meme coins, experts have looked into data from approximately 1,500 tokens that were supported by around 377 key users with influence in this area. These users have at least 10,000 followers and are known for frequently promoting meme coins. They’ve identified a total of 1,567 unique meme coins that were advertised during the last three months.

With Dune Analytics, our team gathered details on the initial price at launch, the present price, and the subsequent prices after a week, a month, and three months have passed. A meme coin is considered defunct if its current value has dropped by 90% or more compared to when it was initially promoted.

Approximately 3 out of every 4 Twitter influencers have endorsed defunct meme coins, with two-thirds of the ones they back being valueless. In essence, a large proportion of influencer-led promotions might lead unsuspecting investors towards potential financial losses.

CoinWire report

The real effectiveness of meme coin promotion

The actual situation with meme coins differs significantly from influencers’ positive picture.

It appears that the data indicates that most of these projects typically fall short of their projected results: within a week, around 80% of the meme coins endorsed by influencers usually shed approximately 70% of their worth.

Reflecting on my crypto investments over the past couple of months, I’ve noticed an alarming pattern: Around 90% of the meme tokens I invested in have depreciated by approximately 80% in value. This trend continued for another month, with as much as 86% of these tokens plummeting in price by a factor of 10.

Achieving high returns is almost impossible

A major appeal of meme coins lies in the possibility they offer for substantial profits.

In the real world, it’s quite uncommon for influencers to effectively promote meme coins. Statistics show that only about 1% of influencers have managed to do so successfully. Moreover, out of those meme coins that were promoted by influencers, only around 3% have experienced such a substantial increase.

It’s quite intriguing that as an influencer gains more followers, the meme coins they endorse often see a decline in performance. Influencers with over 200,000 followers typically experience the most significant drops – losing about 39% of their investment within a week and nearly 90% within three months.

Contrary to popular belief, lesser-known influencers with under 50,000 followers tend to see better results. For instance, a quarter of their earnings can be positive within just a week, and this figure jumps by 141% within three months. This could imply that smaller influencers might be more authentic in their promotional tactics, as opposed to larger ones who may sometimes prioritize financial success over the quality of the ventures they endorse.

Analysts calculated the possible income an influencer might earn from promoting meme coins by using TweetHunter’s earnings estimator for sponsored tweets.

Investors frequently suffer losses when it comes to meme coins, but influencers can reap rewards by endorsing them. On average, they receive around $399 for each promotional tweet that garners approximately 15,000 views. Consequently, these influencers are willing to back even questionable tokens in the pursuit of substantial profits.

Influencer promotion is mostly harmful

As a researcher delving into the realm of digital currencies, I’ve uncovered a troubling truth: the promotion of meme coins by influencers often does significantly more harm than good for average investors. Shockingly, an overwhelming 76% of these influencers endorse tokens without any discernible activity, and the odds of achieving a 10x return are distressingly slim.

It’s important for investors to exercise caution, carefully evaluating the genuine worth behind these promotions instead of relying solely on hype generated by social media.

CoinWire report

According to a recent analysis by CoinWire, the hype surrounding X meme coins tends to benefit social media influencers more than actual investors. In most cases, these cryptocurrencies rapidly depreciate in value, making substantial earnings for investors who follow the hype unlikely.

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2024-11-26 06:02