A recent research report by CoinWire reveals the risks associated with investing in meme coins, particularly those promoted by influencers on social media platform X (formerly Twitter). The study found that most of these tokens ultimately result in significant losses for investors. The report analyzed 1,567 meme coins endorsed by 377 influencers over the past three months and discovered that 76% of influencers were promoting "dead" meme coins that had lost over 90% of their value. Additionally, around 67% of the meme coins promoted by influencers were deemed worthless, and after three months, 86% experienced a 10X drop in value. Only 1% of influencers successfully promoted a meme coin that achieved a tenfold gain. The study also highlighted that within one week, 80% of promoted meme coins lost 70% of their value, and after one month, losses increased to 80%. The report points out that influencer promotions prioritize their earnings over the quality of the projects they endorse. Influencers with over 200,000 followers performed the worst, experiencing an average negative return of 89% after three months. On the other hand, smaller influencers with fewer than 50,000 followers had slightly better outcomes. Despite the risks, some traders find opportunities in the volatile meme coin market and suggest evaluating these tokens based on community size, narrative strength, and utility. However, caution and due diligence are emphasized, as influencer endorsements are not reliable indicators of a token's potential. Investors should meticulously scrutinize projects, considering factors such as utility, community engagement, and long-term viability.



Other News from Today