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OVERVIEW
As the Memecoin frenzy continues to attract attention, many Twitter influencers have packaged these tokens as “get-rich-quick” opportunities. However, a closer analysis reveals a sobering reality: most Memecoins are effectively “dead,” with the majority of investors incurring substantial losses. This article explores the findings from a study analyzing the performance of over 1,500 Memecoins promoted by 377 Twitter influencers.
Table of Contents
Key Findings&Research Methodology
Key Findings
- 76% of influencers promoted “dead” Memecoins
Two-thirds of the promoted tokens eventually lost all value. - 86% of Memecoins lost 90% of their value within three months
Most investments plummeted shortly after promotion. - Only 1% of Memecoins achieved 10x growth
The odds of high returns are negligible.
Research Methodology
- Sample: The study examined 377 Twitter influencers with at least 10,000 followers and tracked 1,567 Memecoins they promoted over three months.
- Data Collection: Using Dune Analytics, the study analyzed the price performance of tokens from their initial promotion to one week, one month, and three months later.
- Definition: A “dead” Memecoin is defined as one that has lost at least 90% of its value compared to its initial promotion price.
Key Analysis
Poor Performance of Promoted Memecoins
- One week after promotion: 80% of tokens lost 70% of their value.
- One month after promotion: 90% dropped an additional 80%.
- Three months after promotion: 86% of tokens were worth less than 10% of their original value
Low Growth Potential
Only 1% of influencers promoted a token that achieved 10x growth.
Overall, just 3% of Memecoins saw returns of 10x or higher.Inverse Relationship Between Follower Count and Token Performance
Influencers with over 200,000 followers saw the tokens they promoted lose an average of 89% in value within three months.
Smaller influencers (with fewer than 50,000 followers) showed better results, with an average three-month gain of 141%.
This suggests that smaller influencers may prioritize authentic promotion, while larger ones focus on financial incentives at the expense of quality.
Influencers Profit Despite Investor Losses
- On average, each promotional tweet generated $399 in revenue and received 15,000 views.
- While investors suffered losses, influencers earned significant income from promotions.
Advice for Investors
Approach influencer-promoted Memecoins with caution. Evaluate the underlying risks and resist the allure of “get-rich-quick” narratives.
Moreover, since many influencers delete promotional tweets linked to failed projects, the actual situation could be even worse than reported. Investors should remain vigilant and avoid making decisions based solely on social media hype.
Summarizing
The data paints a concerning picture: KOL-driven Memecoin promotions do more harm than good for average investors. With 76% of influencers promoting “dead” tokens and a mere 1% achieving 10x growth, it is evident that these campaigns are primarily motivated by financial gain rather than a genuine interest in their followers’ success.
FAQs on this
Why do most Memecoins promoted by influencers fail?
Most influencers prioritize personal financial gain over the quality of the projects they promote. They often advertise high-risk tokens that lack fundamental value or sustainability, leading to their eventual crash. Additionally, these tokens are frequently overhyped, attracting inexperienced investors who face significant losses once the initial buzz fades.
Can investors still profit from influencer-promoted Memecoins?
While it’s not impossible to profit, the chances are extremely low. The study found that only 1% of Memecoins achieved 10x growth, and the majority lost 90% of their value within three months. Investors need to conduct thorough research and avoid making decisions based on hype alone.
Are smaller influencers more reliable for Memecoin recommendations?
The data suggests that smaller influencers (fewer than 50,000 followers) promote better-performing Memecoins, with an average three-month gain of 141%. This could be because smaller influencers are more selective or prioritize authentic engagement with their audience. However, investing in Memecoins remains highly risky, regardless of the source.
