The surge in popularity of meme coins, driven by endorsements from influential X personalities, has enticed countless investors with the promise of high returns.
New research by CoinWire reveals the bleak truth: the majority of meme coins promoted by influencers are now worthless, leaving most investors facing significant losses.
The study examined over 1,500 tokens endorsed by 377 influencers with at least 10,000 followers.
Using data from Dune Analytics, analysts tracked the performance of these tokens over time, uncovering the instability and volatility plaguing this market.
Meme coins collapse
The CoinWire study categorizes a meme coin as “dead” if its value drops by 90% or more compared to its initial promotion.
Shockingly, 76% of influencers have promoted tokens that meet this criteria, and two-thirds of all meme coins they endorse lose their value entirely.
- Statistics highlight the rapid devaluation of these tokens:
- One week after promotion: 80% lose 70% of their value.
- One month later: 90% drop by 80%.
- Three months in: 86% have fallen in price by tenfold.
The analysis underscores the volatility and short lifespan of meme coins, particularly those promoted by high-profile influencers.
Source: CoinWire
Poor returns, but high influencer earnings
While investors rarely see profits, influencers promoting meme coins consistently benefit financially. U
sing TweetHunter’s earnings calculator, CoinWire estimates that influencers earn an average of $399 per promotional tweet, which typically generates around 15,000 views.
Despite promoting dubious projects, influencers capitalize on the social media hype surrounding meme coins.
Surprisingly, the study finds that the larger an influencer’s following, the worse the performance of their promoted tokens.
Influencers with over 200,000 followers see meme coins losing 39% of their value within a week and 89% within three months.
Source: CoinWire
In contrast, smaller influencers—those with under 50,000 followers—show relatively better outcomes, with 25% of their promoted tokens yielding positive returns after a week and a 141% increase within three months.
This disparity suggests that smaller influencers may take a more genuine approach to promotion, while larger influencers prioritise financial gains over the legitimacy of projects.
Investors’ slim chances of high returns
One of the main attractions of meme coins is their perceived potential to deliver substantial returns.
Yet, the study finds that only 1% of influencers successfully promote tokens that achieve these returns.
Moreover, just 3% of meme coins endorsed by influencers deliver the promised exponential growth.
The data reveals that the meme coin hype, often fuelled by social media endorsements, rarely translates to meaningful gains for investors.
Instead, the speculative nature of these investments leads to substantial financial losses for most.
Why influencer-driven promotions are risky
The CoinWire study highlights a fundamental issue with meme coin promotions: they are predominantly geared towards influencer profits rather than investor benefits.
The study warns that investors should scrutinize the true value of promoted tokens and avoid making decisions based on social media hype alone.
As the trend of influencer-driven promotions continues, it becomes clear that the majority of these tokens offer little to no intrinsic value.
For ordinary investors, meme coins remain a high-risk, low-reward venture, with the odds heavily stacked against achieving significant profits.
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