$30,000 Investment Yields Only One User? The Decline of Influencer Marketing in Crypto

The era of short videos has arrived.

Written by: Boaz Sobrado
Compiled by: Chopper, Foresight News

"In 2025, we spent $30,000 hiring an influencer to promote an exchange, and in the end, we only got one registered user," Rhys McKay said in an interview. "The influencer was a globally recognized blogger, but the conversion was just one person."

A few years ago, this investment could have yielded considerable returns. Before founding the short video editing agency Lumina Clippers, McKay ran a crypto marketing company for five years. He revealed that the company had invested a total of $30 million in influencer marketing. Brands used to be willing to spend $40,000 for an influencer to post a tweet. Between 2021 and 2022, as long as influencers promoted tokens or exchanges, brands could generally achieve positive conversions and realize returns on investment. However, by 2025, this model had completely failed.

The difficulties faced by McKay are now common across the entire industry. Crypto and fintech brands are cutting their budgets for paid influencer promotions and shifting funds to two cost-effective channels. The first is clip distribution: hiring a large number of freelance creators to edit and publish short videos; the second is fan-generated content, where enthusiasts voluntarily create brand-related videos for free. The cost of traditional paid advertising is about $20 to $80 per thousand views, while the clip distribution model only costs $1 to $5.

At the 2023 New York Toy Fair, Toikido showcased its Pudgy Penguins exhibit

"The audience is already saturated"

"Some influencers have collaborated with over 100 brands, and if your brand is number 101, the audience is already fatigued," McKay said. "Influencers can no longer guide the audience to invest or use products; continuous commercial promotions have exhausted fans' trust."

More than one marketing professional has chosen to withdraw from the influencer space. James Sixsmith, CEO of the futures trading platform Take Profit Trader, stated that influencer marketing is difficult to control, and the company has decided to retract related business, reduce external influencer collaborations, and shift marketing work that was originally outsourced to influencers back in-house.

The Rise of Short Video Armies

"We have 62,000 vetted editing creators and 5,000 UGC content producers," McKay introduced Lumina Clippers' operational model. The team edits long video materials into numerous short videos and distributes them widely on TikTok, Instagram Reels, and YouTube Shorts. Editing creators are compensated based on views, with a maximum payout cap of 100,000 views per video, avoiding the depletion of marketing budgets by a single video.

Daniel Bitton, head of a similar editing platform, bluntly stated the cost advantages of this model: "Our platform's average cost per thousand views is about $1, compared to $40 to $80 for traditional paid ads, making it easy for businesses to choose. Essentially, we are creating a market for viral content distribution."

Short video content also has a significant advantage: a longer traffic lifecycle. "When traditional ads are run, once the budget stops, the video will not receive any new views," McKay explained. "But edited videos can retain their presence long-term. If someone watches this month, new users may still come across the same video two years later."

This model has already transcended the crypto industry. Institutional clients include OKX, Adobe, Algorand, and Netflix, while prediction markets Polymarket and Kalshi have also run short video marketing campaigns.

The influx of massive content can also lead to poor-quality content, and McKay emphasized that strict review is crucial. "Many open platforms allow anyone to register, even having someone else register an account. As long as identity verification is completed, they can upload short videos. We have application thresholds, review account qualifications, and analyze video performance data."

Fan-Generated Dissemination

Paid promotions are one path, while another is zero-cost. Zaid Attari, who was responsible for marketing the NFT brand Pudgy Penguins, believes that the highest-value content is the fan-generated secondary creation videos, which he refers to as "Edits."

"The motivation for users to create paid short videos comes from revenue; fan-generated secondary creations are completely different," Attari mentioned in a voice memo. "This is passionate creative marketing. A high-quality secondary creation can drive more enthusiasts to continue producing, forming a spontaneous brand halo effect without the brand needing to actively guide."

The Pudgy Penguins IP character Pengu is the best example. In 2025, this character became part of the viral TikTok meme "Tim Cheese x John Pork." Attari stated that the brand initially invested in seed secondary creation materials, and this cross-industry promotion garnered about 250 million exposures within two weeks. He believes this intuitively proves that fan secondary creations can bring immense value to IP and tech brands. Pudgy Penguins has not abandoned paid marketing either; during the holiday season of 2025, the brand spent nearly $500,000 on advertising on the Las Vegas Sphere.

Matt, founder of the social app Lockit, analyzed the underlying logic of organic content winning in the podcast "On The Margin": "What the audience truly cares about is the video itself, not the awkwardly inserted products. This is also why native content performs better than hard ads."

Summary

"Editing and distribution are very suitable for building brand awareness, but it is difficult to track direct conversion effects, which is a major pain point in the industry," McKay admitted. Brands can clearly see the continuous increase in views and shares, but it is challenging to quantify how many real users and transaction orders they ultimately bring.

Another significant risk is compliance issues with advertising information disclosure. Short videos and fan-generated content that do not indicate paid attributes are reminiscent of the violations that led to Kim Kardashian being fined $1.26 million by the SEC. Prediction market platforms like Polymarket and Kalshi have already faced regulatory scrutiny due to marketing activities that blur the lines between "paid promotion / native content."

However, McKay remains optimistic about this track: "I believe that in 2026, if you want to stably acquire traffic, short videos are the way to go. To achieve continuous and stable exposure, you cannot do without short video promotions."