The Meme Coin Hype
Meme coins are not exactly new. Dogecoin, which is widely considered the world's first meme coin, has been around since 2013.
Even though they have existed for nearly 12 years now, meme coins have never seen the level of hype that exists today. TRUMP coin, for example, skyrocketed only a few days after its launch.
Another meme coin that made the news was HAWK, a token launched by Hailey Welch, aka Hawk Tuah girl. Of course, not long after that, it collapsed, losing over 93% of its value and raising significant suspicion of a rug pull.
I don't believe Ms. Tuah rugged her investors, at least not intentionally, but that's irrelevant. The point is that a meme coin with absolutely no value was launched, and a lot of money was put into it, but most people lost it.
Not to blame the "victims," but what did they expect? It's not the first time it has happened and will not be the last.
Most meme coins are dead
A study by CoinWire from November 2024 revealed some interesting insights regarding the meme coin market.
They analyzed the performance of over 1,500 tokens promoted by 377 Twitter influencers, and we now take a look at their key findings.
You can also access the full report here
Most influencers are promoting dead coins
According to the study, 76% of the influencers they tracked have promoted meme coins that are now dead. Whether they are paid to do it, or they themselves are unaware of the risks of the projects is unknown and was not part of the scope of the study, but one can speculate what takes so many influencers to mislead their audience into investing in these tokens.
Meme coin performance is generally bad
Although a few meme coins may live up to the hype and don't crash and burn, as a rule, they tend to perform very poorly, as shown by the data analyzed by CoinWire.
After one week, 80% of meme coins promoted by influencers lost 70% of their value.
After one month, 90% of them decreased by 80%
After three months, 86% of the tokens lost 10x in value.
Achieving 10x with influencer promoted meme coins is nearly impossible
One thing that attracts investors to meme coins is the potential for massive gains. Even wise and seasoned investors who know there is no real value behind them are easily attracted by the prospects of quickly multiplying their net worth.
However, doing so by buying tokens promoted by influencers is next to impossible.
Data shows that only 1% of influencers have ever promoted a meme coin that did a 10x, and only 3% of all tokens promoted by influencers ever did that.
More followers means worst performance
This is maybe the most irrelevant finding, but it is still a very interesting one.
The study found that influencers with over 200k followers tend to have the worst performance, while those with less than 50k followers have shown better results.
Keep in mind that correlation does not mean causality, but this data suggests that smaller influencers may have slightly more genuine promotion practices, while larger influencers may prioritize financial incentives over the quality of the projects.
Final thoughts
It's undeniable that meme coins came to stay, and it is, in fact, possible to make a lot of money on them, but, as a rule, they are, as the name implies, nothing but memes and rarely have a long life meaning when you hear about them is often already too late to get in.
Influencers seem to be a very unreliable reference when it comes to picking crypto projects, especially meme coins, as the vast majority of them promote dead tokens.
All in all, the old crypto adage stands: Do your own research.