Key Takeaways
- 76% of promoted memecoins are now worthless, with most collapsing within weeks.
- Only 1% of influencer-backed memecoins achieve a tenfold increase in value.
- Influencers with larger followings often promote tokens with the worst performance.
The allure of quick profits has made memecoins a popular choice among cryptocurrency influencers. Contrasting that reality, a new report from Coinwire shows the opposite in the real-life performance of tokens. It reported that out of 1,500 tokens studied, 76% have become worthless, leaving many investors at a loss.
The report said that two-thirds of the promoted memecoins fail completely, thus showing the risks of following online endorsements. Investors who follow these buzzworthy tokens often face extreme losses- 80% of the memecoins lost 70% of their value in one week. The numbers get worse after a month: 90% drop by 80%, really underlining how unstable this market is.
The Odds of Winning in Memecoins
Memecoins promise exponential gains but are, in reality, impossible to get. Only 1% of influencers have ever shilled a token that went up 10x. Overall, just 3% of memecoins from influencers have such growth, making those wins outliers and not norms.
Surprisingly, smaller influencers with less than 50,000 followers yield marginally better results. Their promotions allow gains of 25% after one week and highs of as much as 141% over three months. On the other hand, mega-influencers, or those with huge followers, create the worst case: some promoted tokens plummet 39% within one week and plummet 89% over three months.
Profits for Influencers, Not Investors
While investors carry a lot of risks, influencers earn financially. According to the report, a typical influencer would get paid about $399 for a promotional tweet while their posts reach 15,000 viewers. This is the reason why unreliable projects get promoted on such a large scale. It has emerged out as a case for caution among investors not just to blindly believe in influencer marketing.
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