From $500M to $60M: The Hawk Tuah Memecoin ($HAWK) Crash That Shook Crypto

$HAWK, a memecoin created by social media star Hailey Welch, also known as the “Hawk Tuah Girl,” had a huge up and down price this week. It really shocked the cryptocurrency world.

As soon as $HAWK appeared on the Solana blockchain, its market cap hit an amazing $500 million. It then dropped to $60 million, wiping out millions of dollars in investor wealth.

A lot of people are accusing this shocking crash of fraud, which brings up important questions about the risks of cryptocurrency backed by celebrities.

$HAWK’s Meteoric Rise and Crash

After its launch on Wednesday, $HAWK was sold to Welch fans as a way for them to invest in a token linked to her growing online image.

In recent years, memecoins have become very popular, thanks in large part to the success of coins like Dogecoin and the desire to bet on social trends and pop culture.

To be honest, Welch’s team said the launch was “not a cash grab” and wasn’t meant to “tokenize her fan base.”

Even with these promises, the token’s launch was a mess. Within 20 minutes, $HAWK’s value plummeted by over 88%, leaving many fans financially devastated.

Bento Boi, a well-known crypto enthusiast, pointed out that just a few wallets held 96% of the token’s total.

One wallet allegedly made over $1.3 million in profits within hours of the coin’s launch, which raised red flags about possible manipulation.

Rug Pull Accusations Spark Outrage

The phrase “rug pull” has come to mean cryptocurrency scams in which creators give up on a project after raising money for it, leaving investors with tokens that aren’t worth anything.

A lot of people who bought $HAWK, mostly Welch’s friends, think they were scammed.

A lot of people complained about Welch on social media sites, saying that he took advantage of their trust.

One X user was upset that they lost their life savings and their children’s college fund and said that Welch’s team didn’t tell them that insiders held most of the tokens.

There are more calls than ever for Welch to be punished by the law, and at least one law company is said to be looking into possible securities violations.

Celebrity Coins: A Double-Edged Sword

The mess with $HAWK shows how dangerous cryptocurrency backed by famous people can be.

These tokens use the influencer’s fame to get investors, but they don’t always have the long-term value or security of cryptocurrencies that have been around longer.

Experts have warned many times not to invest in coins backed by famous people. Bento Boi told his fans to “stay away from celebrity coins,” pointing out the risks that come with projects that are based on speculation.

The fact that most of the $HAWK stock was held in just a few wallets made things even worse because insiders could sell large amounts of tokens, sending prices plummeting.

Welch Denies Allegations

In response to the backlash, Welch and her team denied any wrongdoing, claiming they had not sold any tokens and had attempted to mitigate issues such as “sniping” through high initial transaction fees.

Welch’s manager, Jonnie Forster, maintained that the team’s intentions were honest, stating, “We don’t want to break securities laws.”

However, these reassurances have done little to appease angry investors, many of whom have demanded refunds or threatened legal action.

The reputational fallout for Welch is significant, with critics labeling her as another example of influencers exploiting their audiences for personal gain.

A Broader Lesson for Crypto Investors

The fall of $HAWK is a stark reminder of how volatile and unpredictable the cryptocurrency market can be, especially when it comes to projects linked to famous people.

Memecoins can give you huge gains, but they are also very easy to manipulate the market, trade inside information, and cause speculative bubbles.

Cryptocurrency scams are getting more and more attention from regulators, and events like this are likely to get even more attention.

Investors should be very careful and do a lot of research before buying tokens, especially if they aren’t very clear or if a lot of people own them.