Crypto markets are bracing themselves for a shock as a new report has revealed that most memecoins that are promoted by influencers have zero value today.
According to a CoinWire research report, 76% of cryptocurrency influencers on X have promoted coins that are currently worth zero.
The data reveals a shocking truth, giving a hint to many that memecoin investment should be a very careful and precise decision that investors should not take based on who is promoting and endorsing a particular memecoin.
The data also comes on the sidelines of a rise in market investment for memecoins. The past five years have seen investors jump on the memecoin bandwagon to invest their money in crypto other than the big two.
Influencers Loose Credibility Over Low Value Memecoin Promotion
The report highlights that overall dead memecoins are promoted by 76% of Twitter influencers.
Many X (formerly Twitter) influencers have pushed memecoins as quick investment opportunities due to the excitement surrounding them. The report’s analysis, however, shows a dismal reality i.e. the majority of investors suffer large losses, and the bulk of these memecoins are indeed dead.
Accordingly, a significant percentage of influencer-driven marketing campaigns are simply preparing investors for failure. These advertisements frequently deceive new investors, who invest in these businesses without fully comprehending the risks involved.
In just three months, over 86% of influencer-endorsed memecoins saw a 90% decline in value. On the other hand, memecoins that garnered 10x were only promoted by 1% of influencers.
Why Are Investors Looking More At Memecoins?
Most investors now find risky businesses more alluring due to the expansion of the global money supply. As a result of the trend change, a lot of money has been invested in cryptocurrencies like Bitcoin and Ethereum.
Memecoins, which are high-risk, high-reward investments for surplus monies, represent the opposite extreme of this money flow. Simultaneously, many private investors are searching for new avenues for profit, indicating a change in mindset inside traditional finance.
Additionally, memecoins are aiming to provide egalitarian access for investors worldwide and reduce insider advantages.
Investors With More Fan Following Garner More Trouble
It’s interesting to note that the performance of the memecoins promoted by influencers decreases with the size of their following.
Influencers with more than 200K followers typically do the worst. After a week, their memecoin advertisements result in roughly 39% negative returns, and after three months, 89% negative returns.
Conversely, influencers with fewer than 50,000 followers have demonstrated superior outcomes, with a one-week positive return of 25% and a three-month positive return of 141% from their promotions.
According to this data, smaller influencers might engage in slightly more sincere promotion strategies, whereas larger influencers might put money before the caliber of the projects they support.