Hawk tuah's crash: Why 76% of influencer memecoins fail
A closer look at the risks of following viral coin endorsements from social media stars
Recently, TikTok star Hailey Welch—famous for her viral "hawk tuah" video—launched a joke-based cryptocurrency, known as a memecoin. The coin’s value shot up to $500 million in a frenzy of hype but then crashed by 95% within hours. For traders who jumped on the hype, the losses were devastating.
This isn’t an isolated incident. New research shows that 76% of memecoins promoted by crypto influencers end up losing almost all their value—often leaving investors with nothing but regrets.
Memecoins—cryptocurrencies inspired by internet jokes or memes—have become a major trend in the crypto world. Tokens like DOGE (based on the Shiba Inu dog meme) once turned small investments into massive profits, sparking viral hype and attracting big followings. But as the popularity of memecoins grows, so too does their risk—especially when influencers get involved.
According to research by news outlet Coinwirez, crypto influencers on X are fueling the hype. Their study revealed that 86% of memecoins endorsed by influencers lose 90% of their value within three months of promotion. Even worse, only 1% of these tokens see any kind of sustained growth.
The team uncovered these patterns by manually analyzing 1,567 tokens promoted by 377 influencers over three months. Each influencer had at least 10,000 followers and frequently posted about memecoins. To assess performance, they tracked token prices at different stages: when first promoted, a week later, a month later, and after three months.
Their findings paint a stark picture: while influencers promote memecoins as opportunities to make quick gains, the reality is often steep losses for investors.
Short-term gains, long-term losses
The Coinwirez research aligns with a 2023 study titled Crypto-Influencers, which also examined the impact of influencer advice. That study looked at 36,000 posts from 180 crypto personalities over two years. Researchers found that while influencer recommendations could lead to short-term gains—lasting one or two days—these were quickly followed by significant losses.
Interestingly, posts with strong “buy” signals or overly positive language had the most dramatic effects: sharp price jumps in the short term, but even sharper declines over time.
The role of hype and pump-and-dump schemes
The problem isn’t just poor performance—it’s how some influencers operate. In certain cases, influencers and celebrities have been accused of participating in pump-and-dump schemes. These schemes involve hyping a token to artificially inflate its price, attracting buyers and driving up demand. Once the price peaks, the promoters sell their holdings for a profit, leaving other investors stuck with tokens that are worth almost nothing.
Hawk is live!!!
— Haliey Welch (@HalieyWelchX) December 4, 2024
HAWKThXRcNL9ZGZKqgUXLm4W8tnRZ7U6MVdEepSutj34 pic.twitter.com/9GFgYwpeFA
In the case of Hailey Welch’s Hawk Tuah coin, the hype was explosive. According to Forbes, the memecoin’s value skyrocketed to a market capitalization of $500 million before collapsing to just $25 million—a devastating 95% drop. Traders who bought into the frenzy were left holding massive losses.
The backlash was swift. On X, popular crypto YouTuber Coffeezilla—known for exposing scams in the crypto space—called the Hawk Tuah launch “one of the most miserable, horrible launches I’ve ever seen in my life.” Following the controversy, Welch has remained silent on social media.
Hawk Tuah PRESSED by Investigator Coffeezilla for scamming millions allegedly. pic.twitter.com/evWizLYgj1
— DramaAlert (@DramaAlert) December 5, 2024
The lesson for investors
While influencers may position themselves as experts or trustworthy voices in the crypto space, the numbers suggest otherwise. Their endorsements are rarely grounded in solid fundamentals, and more often than not, they lead followers into risky investments.
As new memecoins emerge daily—thanks to platforms like Pump.fun, a Solana-based tool that makes it easy to create tokens—traders should proceed with caution. The hype can be enticing, but the risks are real.
For anyone navigating the world of memecoins, the message is clear: do your own research, understand the risks, and never invest more than you’re willing to lose. In crypto, as in life, it’s always better to be safe than sorry.
