According to ShibDaily, a recent study by CoinWire has highlighted the potential dangers associated with meme coin promotions by influencers on X, formerly known as Twitter. The research analyzed over 1,500 meme coins promoted by 377 influencers with at least 10,000 followers over the past three months. The findings reveal a significant disconnect between the hype generated by influencers and the actual performance of these tokens, raising concerns about the risks posed to investors.
The study found that 76% of the influencers promoted tokens that are now considered 'dead,' having lost at least 90% of their value. This means that two out of every three meme coins endorsed by these influencers have become virtually worthless, resulting in substantial financial losses for investors. The rapid decline of these tokens is evident, with 80% losing 70% of their value within a week, 90% declining by 80% after a month, and 86% plummeting by 90% within three months.
Despite the promises of significant returns, the data from CoinWire indicates that achieving a tenfold increase in investment is rare. Only 1% of the influencers studied promoted a meme coin that reached a 10x gain, and merely 3% of the promoted meme coins achieved this milestone. This highlights the gap between the potential returns touted by influencers and the actual outcomes experienced by most investors.
The study also discovered a correlation between the size of an influencer's following and the performance of the promoted meme coins. Influencers with larger followings, over 200,000, tended to promote the worst-performing tokens, which suffered an average of 89% negative returns after three months. In contrast, smaller influencers, with under 50,000 followers, had slightly better results, suggesting more genuine promotional practices, though still risky. This disparity may be attributed to larger influencers being more likely to accept paid promotions without thorough due diligence.
CoinWire's analysis, using TweetHunter’s Twitter earnings calculator, estimates that influencers earn an average of $399 per promotional tweet, with each tweet reaching approximately 15,000 views. This financial incentive creates a conflict of interest, encouraging influencers to promote speculative and risky tokens. The study utilized Dune Analytics to track meme coin price performance, defining a 'dead' meme coin as one losing at least 90% of its initial value. The researchers acknowledge limitations in tracking deleted tweets. Readers are advised to conduct their own research and consult with a financial adviser before making investment decisions.