A recent report revealed the disturbing truth of the relationship between meme currencies and social media influencers on X (formerly Twitter), revealing High failure rate.
The study by Coinwire found that two-thirds of cryptocurrency influencers on X promoted memecoins that are now worthless.
The small fraction received a 10-fold increase
Recent research discovered that only a small percentage of memecoin promotions achieved exponential growth, saying that 1% of these promotions increased the value of the token tenfold. It’s a dismal rate considering the hype X influencers generate with such promotions.
Coinwire said that the now-defunct memcoins were promoted by more than 76% of influencers on com. memecoins.
The cryptocurrency news platform examined more than 1,500 memecoin promotions by 377 X influencers and analyzed their performance.
Paid KOLs: How Twitter Influencers Promote Dead Codes and Profit While You Lose
1/ The hype around memcoins hides a harsh truth: 76% of influencers promote dead coins, and 86% of memcoins lose 90% of their value in just 3 months.
Let’s dive into the data. 🧵
2/… pic.twitter.com/CCy6Tnc7pt
– Keto (@keto_studio) November 25, 2024
Small follow-up, better results
Coinwire revealed that smaller influencers had better results than larger influencers, saying they had more “authentic promotion” practices that led to higher returns.
According to the study, X influencers with less than 50,000 followers had better results, saying they had 25% positive returns after a week. After three months, positive returns were up more than 141%.
Meanwhile, the same study showed that influencers with larger followers had poorer promotional results.
The news platform explained this Influencers With over 200,000 followers, they are the worst performers, stating that their promotional activities brought in negative returns of 39% after a week, and after three months, it was 89% worse.
According to a research report by Coinwire, 76% of crypto influencers on Its 70%. In a week.… pic.twitter.com/EWmmymAS2N
— Wu Blockchain (@WuBlockchain) November 25, 2024
According to the researchers, one of the reasons for their poor performance is that these influencers focused more on obtaining financial incentives than on the quality of the projects they approved.
Top influencers made an average of $399 per promotional tweet for every post that reached at least 15,000 views, Coinwire said, adding that influencers received financial gains from the promotions while memecoin investors absorbed the losses.
As of today, the market cap of cryptocurrencies reached $3.22 trillion. Chart: TradingView
The findings raised the issue of the responsibility of influencers in promoting digital currency, saying that these influencers often misled investors.
The promotion of influencer-driven Memecoins led to failure
Coinwire revealed that about 86% of meme coins promoted by influencers dropped in value by 90% after three months.
The study added that after a week, the value of 80% of the tokens promoted by influencers had decreased by 70%, while after a month, 90% of these tokens had lost 80% of their value. On the other hand, 86% of promoted memecoins saw a tenfold decline after three months.
According to the report, it is almost impossible to achieve tenfold gains with influencer-backed memecoin promotions since only 1% of them will reach this growth rate.
Featured image from DALL-E, chart from TradingView