Influencers promote memes, but 76% fail in a few months. This leaves investors with a large loss and damages the credibility of crypto.
CoinWire has recently conducted a study that reveals how meme coins endorsed on X by influential people can be risky. Most of the tokens will lose value in a matter of months.
The industry has suffered from the negative effects of these promotions. They are often driven by financial motivations.
This report analyzed over 1,500 memes promoted by influencers who have at least 10,000 followers.
The report stated that the tokens’ value had dropped 90% within 3 months.
Most of the tokens promoted fail
Researchers found that nearly two thirds of meme coins promoted by influencers were useless.
Researchers used data from Dune Analytics to examine the price of the tokens during the promotion as well as the value of the tokens after a week, a month and three months.
In the first seven days, 80% of all meme coins had lost their value.
In a single month, 90% of the stocks had fallen by over 80% and in three months 86% lost more than ten times what they had originally cost.
The reality of meme coins is quite different.
Only 3% of the meme tokens promoted by influencers made any significant gains. And only 1% were successful in promoting profitable tokens. Most investors also suffer heavy losses just weeks after investing.
Influencers who have a larger audience performed worse.
Those with more than 200,000 followers have seen their meme coins lose value by 39% within one week, and then 89% in three months. Smaller figures, however, had better results.
Always win for the Influencer
The report also stated that influencers don’t suffer the most in the majority of cases.
Influencers earn an average of $399 for each promotional tweet. This is based on posts with 15,000 or more views.
Influencers often have financial incentives to promote even the dubious meme coin.
This report was noted
The financial benefits are obvious to them even though the audience may not see the same.
The report also highlighted the fact that many influencers remove promotional tweets if they don’t yield positive results. It warned that “the actual situation is expected be much worse.”
Meme coins are harming the industry
Market pundits are unanimous in their agreement that the meme coin, which is often seen as a fun, quirky aspect of cryptocurrency, has brought accessibility to the crypto industry.
Others caution, however, that the accessibility of these apps can mask deeper problems.
The majority of the memecoins have no intrinsic value and are speculative. Data shows that the vast majority of investors lose money.
Verbitskii argues that the influencer-promotional nature of meme coin hype is a distraction from blockchain’s real potential. It puts short-term gain ahead of meaningful innovations.
Verbitskii said that “Memecoins undercut trust in the broader cryptocurrency ecosystem” and urged “use-case driven innovations” in order to promote sustainable growth. Binance’s founder Changpeng Zhao echoed this sentiment in a post on X.
The post Is meme currency and the influence of social media sabotaging crypto’s future? The ICD first published this post: Are meme coins and influencers sabotaging the future of crypto?
