A high-profile cryptocurrency crash has sparked fresh concerns about celebrity-backed digital assets, as the HAWK token, endorsed by influencer Hailey "Hawk Tuah" Welch, lost over 90% of its value within hours of launch.
The December 4th collapse saw HAWK's market value plummet from US$490 million to just US$26.4 million, leaving investors reeling and raising questions about the risks of celebrity-endorsed crypto projects.
"I am co-operating with lawyers to uncover the truth, hold the responsible parties accountable, and resolve this matter," Welch stated on social media following the crash. However, industry experts warn this incident highlights deeper issues with celebrity-backed tokens.
The HAWK token crash comes during a period of broader market volatility, with major cryptocurrencies like Bitcoin and Ethereum experiencing notable price swings in December 2024. While Bitcoin reached record highs above US$100,000, subsequent corrections have reinforced the inherent risks in crypto investments.
Market analysts point out that many celebrity-endorsed tokens lack robust economic foundations or sustainable business models. "These projects often rely heavily on star power rather than sound tokenomics," notes Matt Hougan, CIO of Bitwise, who advocates for greater due diligence in crypto investments.
The incident has drawn attention from regulators already working to establish clearer guidelines for digital assets. With the crypto market's growing mainstream adoption and institutional interest, there are mounting calls for stronger investor protections and increased scrutiny of celebrity endorsements in the space.
This event serves as a cautionary tale for investors drawn to crypto projects primarily because of celebrity backing. As the market continues to evolve, experts recommend focusing on fundamentals rather than famous faces when evaluating potential investments.