Hawk Tuah’s crypto launch is the latest celebrity investment disaster
Bitcoin just hit the big time US$100,000.
Buoyed by Donald Trump’s re-election and the promise of a pro-crypto administration, crypto investors are pouring everything into the digital currency. As the price of Bitcoin rises, the cryptocurrency appears to be seeping back into the public consciousness after cryptocurrency. failures from 2022.
And it looks like the memecoin craze is now being revived. On the same day Bitcoin hit a new six-figure record, viral girl “Hawk Tua” Hayley Welch launched its own cryptocurrency token $YASOK.
After the launch, $HAWK’s market capitalization jumped to $500 million. Within a few minutes token crashed. Its current market capitalization is approximately $36 million. Hawk Tuah fans quickly took to social media to share how they lost thousands of dollars.
Everything is starting to feel like 2021 again.
Celebrity Cryptocurrency Is a Scam
During the latest cryptocurrency rush of 2021Some celebrities and online influencers quickly realized there was money to be made from this. Some musicians, reality TV stars, and esports athletes have embraced altcoins or even gone further and created their own memecoins.
Cryptocurrency is a risky investment from the start. Crypto tokens are an extremely volatile speculative asset. Currently, there is very little government oversight or regulation when it comes to the cryptocurrency market. Even Bitcoin, considered the “safest” bet in the cryptocurrency world, has experienced major ebbs and flows. If you have to sell during one of the down periods, you may lose some of your change.
Mashable Speed of Light
Moreover, now anyone can create a crypto token. Over the past few years, platforms have emerged that have helped make this process very simple. Dogecoin, the most popular memecoin, has set a standard of success that no other memecoin has been able to replicate.
However, the allure of easy money and getting rich quick through crypto tokens and memcoins has attracted a lot of money from people.
Back in 2021, memecoins created by celebrities and influencers were all the rage. Like Mashable reported thenmany turned out to be fraud.
Rug pulling is quite common among memecoins, especially those created by influencers and celebrities.
Here’s what often happens: a famous or well-known person launches a memcoin. Their fans are encouraged to shop to support their favorite creator while making money for themselves. However, before the official launch of the memcoin, the creator of the memcoin sets aside a certain number of tokens for himself or his friends. They either give them away for free or hold an unadvertised pre-launch sale at a price significantly lower than what the token will sell for at launch. When the token goes on sale, the public will buy it, which will lead to an increase in the value of memcoin. But once this happens, those who received coins before the launch dump their holdings for profit, which dramatically reduces their value and ultimately leads to the collapse of memcoin. Fans of celebrities or influencers are often left with the bag, their money tied up in a now-worthless token that they can never sell.
It may seem obvious that you shouldn’t take financial advice from celebrities. Back in 2018, the Securities and Exchange Commission issued a stark warning about speculative schemes by public figures. “Investors should be skeptical of investment advice posted on social media and should not make decisions based on celebrity endorsements,” Steven Peikin, co-director of enforcement, wrote in the same document. statement that Floyd Mayweather Jr. and DJ Khaled have been charged with illegal advertising of initial coin offerings. “Social media influencers are often paid promoters rather than investment professionals, and the securities they promote, whether issued using traditional certificates or on the blockchain, may be fraudulent.”
However, in age-related or parasocial relationships, many fans feel they can trust their favorite influencers. There is a feeling that “I will not be deceived.” But again and again Celebrity memecoins have failedand insiders make money from the influencer’s fans.
The tweet may have been deleted
Take the aforementioned and recently launched $HAWK. IN X Spaces broadcastYouTuber Coffeezilla, who investigates cryptocurrency scams, talks to Welch and the developers of her crypto token about how things have evolved since launch. This is a story we’ve heard before. The vast majority of tokens were stored in just a few crypto wallets before the public launch. According to Coffeezilla, after the launch, insiders deleted the token. The value of $HAWK plummeted and all buyers who entered it at launch suffered significant financial losses.
Buyers of memcoins have no recourse. There are no refunds, they have no way to get their money back. Most memcoins have zero utility, so there are no use cases for the tokens either. The only way they’ll get back what they put in is if Welch and her team can somehow convince another group of suckers to put their money into this worthless token.
I hope after reading this you won’t be one of those suckers.