“Hawk Tuah” Girl’s Cryptocurrency Crashes Shortly After Launch: What Are Meme Coins?

What happened to Haliey Welch launching the $HAWK cryptocurrency?

LOS ANGELES – Haliey Welch, known for her viral TikTok video “Hawk Tuah,” has launched her own cryptocurrency, $HAWK, on ​​the Solana blockchain. However, the memecoin’s value collapsed by 95% shortly after its release.

After initially reaching a market cap of $500 million, $HAWK quickly fell to $25 million, resulting in significant financial losses for investors. The controversy escalated when some investors accused Welch and her team of insider trading and filed complaints with the Securities and Exchange Commission (SEC).

In response, Welch denied any wrongdoing, stating on social media that her team “tried to stop snipers as best they could” and did not sell any tokens.

What are memecoins and why are they so risky?

Memecoins are cryptocurrencies inspired by internet memes or trends. Unlike traditional cryptocurrencies like Bitcoin or Ethereum, memecoins often lack intrinsic utility as they rely on community enthusiasm and viral appeal.

According to CoinbaseMemecoins like Dogecoin and Shiba Inu are purely speculative trading instruments that often involve high volatility and risk. Their value often fluctuates based on hype or recommendations rather than specific use cases.

Why did $HAWK face backlash?

The disastrous launch of the $HAWK coin has drawn criticism from the crypto community, with allegations of poor planning and potential misconduct. According to a Rolling Stone report, some investors have already filed complaints with the Securities and Exchange Commission (SEC), claiming that the project may have been a “rug pull.”

Haliey Welch performs at SiriusXM Studios on July 31, 2024 in Los Angeles, California.

A rug pull occurs when developers increase the hype around a cryptocurrency project to attract investors and increase its value. Once the project gains traction, developers sell their shares at a profit, causing the coin’s value to plummet and other investors to suffer significant losses.

Welch and her team have denied these allegations, claiming on social media that they have not sold tokens and have worked to minimize the impact of sniper bots manipulating the coin supply. However, the precipitous drop in value and lack of safeguards have led many to question the project’s implementation and transparency.

What’s next for $HAWK and Welch?

Welch’s team is committed to addressing concerns and stabilizing the coin’s value. However, the SEC’s complaints and allegations of a “rug pull” could lead to legal scrutiny. As memecoins continue to lure traders with the promise of high returns, experts urge caution and emphasize the importance of research and understanding the risks before investing.