Hawk Tuah memecoin dumps 90% over controversial launch – Should investors continue to trust celeb memecoins?

Memecoins continue to be the most volatile in the crypto industry. On December 4, Hailey Welch, a social media influencer, introduced her own memecoin, Hawk Tuah. In a mere 20 minutes following its introduction, the crypto coin fell from $500 million to $60 million.

Hailey Welch, who is popularly referred to as the Hawk Tuah Girl on the internet, introduced $HAWK on Solana. Within minutes of its introduction, the coin experienced a rapid spike, reaching a market cap of approximately $500 million. 

Soon after, it crashed to nearly $60 million. Solana (SOL) provided additional confirmation of the information on X. However, Welch has denied any insider sales or activity on behalf of her team or any associated entities. However, Welch has denied any insider sales or activity on behalf of her team or any associated entities. 

Hawk Tuah memecoin declines into failure 

Hailey Welch disclosed the launch of the $HAWK memecoin in a post on X and during an episode of her Talk Tuah podcast, which featured billionaire entrepreneur Mark Cuban.

She stated that she is aware that a significant number of her followers are unfamiliar with crypto, so she is committed to simplifying the onboarding process.

Welch established partnerships with the OverHere platform and Web3 Launchpad to support the launch of $HAWK. She later partnered with Shiba Inu to distribute 20 million HAWK tokens to its community. 

Shiba wrote, “Hyped to announce our friendshib with Hailey Welch and Overhere! We have secured 20M HAWK tokens for the SHIB community (and Yes Leash!) and our frends at DeLoreanLabs!”

The Hawk token’s supply was reportedly “sniped” shortly after its introduction. This means that early investors acquired substantial quantities of the token, thereby limiting token availability for the rest of the community.  

Typically, it is an indicator of a project’s viability, as it helps potential investors know that the token is owned by a limited number of individuals. 

As per aggregated data from Bubblemaps and Dexscreener, a combination of insider wallets and snipers controlled between 80% and 90% of HAWK’s supply at launch.

According to DexScreener data, the token’s price experienced a 91% decline in less than three hours and was trading, with a total valuation of $43.1 million at the time of publication. 

However, it has been verified that not all HAWK holders have sold their units. The current market cap is $732,165, with a price of $0.0008037. 

Despite the ongoing debate, Hawk token continues to be closely monitored by the community, which is requesting further disclosures to verify these claims and maintain a vigilant watch on the project. 

The aftermath of Hawk Tuah’s fall

Welch’s official account explained in a post published on X that the team had not sold any tokens and that no key opinion leaders had received free coins. It was also mentioned that the token had been introduced on the Meteora decentralized liquidity protocol to mitigate the risk of sniping. 

However, a wallet was able to acquire 17.5% of the memecoin’s supply for 4,195 Wrapped Solana (WSOL) — a sum equivalent to $993,000 at the time — mere seconds after its debut, as indicated by data from the Solana block explorer Solscanner.

The wallet generated a profit of $1.3 million by selling 135.8 million HAWK tokens within the next one-and-a-half hours. 

On the other hand, one investor exchanged approximately $1.4 million of MOODENG, another memecoin, for the HAWK token. They incurred a loss of slightly more than $1.3 million, as indicated by on-chain data.

Law firms have begun advertising their services to individuals who lost money on the memecoin, and numerous users on X have declared that they have submitted complaints to the SEC regarding the token.

High memecoin failure in the crypto industry 

Reports have revealed a staggering 97% failure rate for memecoin projects since 2024. The data suggests that memecoins have an average lifespan of only one year, in contrast to the typical three-year lifespan of other crypto entities.

According to AlphaQuest, a crypto research platform, 2,020 memecoin initiatives fail on average each month. The report, which examined 30,000 projects, emphasizes the considerable risk associated with meme currencies, describing them as a rollercoaster of fortunes or a financial minefield. 

The report showed that Base has the highest mortality rate at 66.91%, followed by Solana at 54.03% and Ethereum at 36.59%. Furthermore, malicious activities are associated with more than half (55.24%) of memecoins. 

Still, memecoins continue to appeal to investors who want to achieve rapid returns despite the risks associated with them. 

Approximately 60% of investors in this asset class regard them as short-term investments. The research also demonstrates that memecoins have become a substantial component of numerous crypto portfolios, with two-thirds of crypto investors having invested in them at some point. 

Investors’ perceptions of memecoins are significantly influenced by their personal experiences. 

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