Bitcoin has just hit $100,000.
Buoyed by the re-election of Donald Trump and the promise of a pro-cryptocurrency administration, crypto investors are flocking to the digital currency. With the price of Bitcoin soaring, cryptocurrency is returning to the public consciousness after crypto the crash of 2022.
And, it seems that the memecoin fad is reviving even now. On the same day Bitcoin soared to its new six-figure record, viral “Hack Tua” girl Haley Welch launched His own cryptocurrency token $HAWK.
At launch, $HAWK reached a market cap of $500 million. Within minutes, the The token crashed. Its current market cap is around $36 million. Hawk Tua fans quickly took to social media to share how they lost thousands of dollars.
Things are looking like 2021 again.
Celebrity Crypto is a scam
during the The last crypto rush of 2021Some celebrities and online influencers immediately saw that there was money to be made. Some musicians, reality TV stars, and e-sports names have endorsed altcoins or even gone ahead and created their own branded memecoins.
Cryptocurrency is a risky investment to begin with. Crypto tokens are a highly volatile speculative asset. There is currently very little government oversight or regulation when it comes to the crypto market. Even Bitcoin, seen as the “safest” bet in the crypto world, has experienced massive ebbs and flows. If you have to sell during one of the down periods, you could lose a chunk of change.
Mashable light speed
Additionally, anyone can now create crypto tokens. Over the past few years, platforms have emerged that have helped make the process much easier. Dogecoin, easily the most popular memecoin, sets a standard of success that no other memecoin has been able to replicate.
Nevertheless, the lure of easy money and get-rich-quick through crypto tokens and memecoins has taken away a lot of money from people.
Back in 2021, memecoins created by celebrities and influencers were all the rage. As Mashable Then reportedMany turned out to be a scam.
It’s quite common to get traction with memecoins, especially those created by influencers and celebrities.
Here’s what often happens: A celebrity or famous person launches a memecoin. Their fans are encouraged to buy to support their favorite creator while also earning money for them. However, before the official launch of Memecoin, the Memecoin creator sets aside a certain amount of tokens for himself or his friends. They either give them away for free or provide an unadvertised pre-launch sale at a much lower price than the token’s going price at the time of launch. When the token goes on sale, the public buys, increasing the value of Memecoin. But, as soon as this happens, those who acquired the coins on pre-launch dump their holdings for profit, reducing its value and eventually crashing Memecoin. Fans of the celebrity or influencer are often left holding the bag, their money now tied up in a worthless token that they will never be able to sell.
It seems obvious that one should not seek financial advice from celebrities. Back in 2018, the Securities and Exchange Commission issued a stark warning about public figure betting schemes. “Investors should be suspicious of investment advice posted on social media platforms, and should not make decisions based on celebrity endorsements,” Enforcement Division Co-Director Steven Pekin wrote in it. Floyd Mayweather Jr. and DJ Khaled were charged With illegal initial coin offerings. “Social media influencers are often paid promoters, not investment professionals, and the securities they are touting, whether issued using traditional certificates or blockchain, may be fraudulent.”
However, in an age or unfaithful relationship, many fans feel they can trust their favorite influencers. There is a feeling that “they will not deceive me.” But, time and time again, Famous memecoins have failedWith insiders making money from the influencer’s fans.
Tweets can be deleted
Take the aforementioned and recently launched $HAWK. In A X space streamYouTuber Coffeezilla who investigates cryptocurrency scams confronted Welch and the developers behind his crypto token about how things fared after launch. It’s a story we’ve heard before. The vast majority of tokens were held by only a few crypto wallets before the public launch. After it launched, according to Coffeezilla, those insiders dumped the token. The value of $HAWK has plummeted and all buyers who came to the launch are left with a significant financial loss.
There is no recourse for those memecoin buyers. There are no refunds, no way for them to get their money back. Most memecoins have zero utility, so there is no use case for tokens either. The only way they can get back what they’ve put in is if Welch and his team can somehow convince another group of suckers to put their money into this worthless token.
Hopefully, after reading this, you won’t be one of those suckers.
