Gushiken Yona
Think twice before trusting that crypto influencer on X (formerly Twitter). A new study exposes the dark side of meme coin mania on X: the vast majority of influencer-promoted tokens are dead, leaving investors with significant losses.
The research, conducted by CoinWire, a blockchain and cryptocurrency research platform, analyzed over 1,500 meme coins promoted by 377 Twitter influencers with at least 10,000 followers over the past three months. The findings raise serious questions about the role of influencers in the crypto space and the risks they pose to unsuspecting investors.
Influencer-Driven Hype Masks Dismal Meme Coin Performance
The study’s findings revealed a stark disconnect between the influencer-driven hype and the dismal reality of memecoin performance. A staggering 76% of analyzed influencers promoted tokens that are now effectively dead, having lost at least 90% of their value.
This means two out of every three meme coins touted by these influencers are now worthless, rendering them financial black holes for investors. These tokens typically decline rapidly.
80% lose 70% of their value within just one week, 90% decline by 80% after a month, and a shocking 86% plummet by 90% within three months, wiping out almost all investor capital.
The Elusive 10x Meme Coin Return: A Statistical Anomaly
Influencers often dangle the promise of 10x returns—a tenfold increase in investment—to lure investors into the meme coin frenzy. However, the CoinWire data revealed that this dream is a statistical anomaly.
Only a minuscule 1% of the influencers studied ever promoted a meme coin that achieved a 10x gain, and only 3% of the promoted meme coins themselves reached this coveted milestone. This stark reality exposes the disconnect between the hyped potential and the actual returns experienced by most investors.
Larger Following Doesn’t Equate to Better Investments
The study also uncovered a surprising correlation: influencers with larger followings (over 200,000) tended to promote the worst-performing meme coins. These tokens suffered an average of 89% negative returns after three months, highlighting the potential pitfalls of blindly trusting mega-influencers.
Smaller influencers (under 50,000 followers) had slightly better results, potentially indicating more genuine promotional practices, although still very risky. This disparity may be due to larger influencers being more likely to accept paid promotions for projects without conducting thorough due diligence.
Influencers Profit While Followers Flounder
While their followers face devastating financial losses, influencers profit handsomely from these meme coin promotions. CoinWire’s analysis, using TweetHunter’s Twitter earnings calculator, estimates that influencers earn an average of $399 per promotional tweet, with each tweet reaching approximately 15,000 views.
This substantial financial incentive creates a conflict of interest, motivating influencers to promote even the most speculative and risky tokens.
CoinWire used Dune Analytics to track meme coin price performance after promotion, defining a “dead” meme coin as one losing at least 90% of its initial value. The researchers acknowledge the study’s limitations, specifically the inability to track deleted tweets.
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Yona has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Daily is an official media and publication of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
