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The term "rug pull" has surged in popularity within the cryptocurrency community after the sudden collapse of the Hawk Tuah memecoin, leaving investors in a state of shock and confusion.
On December 4, 2024, Hailey Welch, also known as the Hawk Tuah Girl, launched the eagerly awaited $HAWK meme coin on the Solana blockchain. However, within just 20 minutes of its release, its market capitalization plummeted, leading users on X to label it a rug-pull scam, according to Coin Gape. Some netizens put forth their reactions to the same.
"Whoever fell for this scam is an actual idiot by the way if you thought that Hawk Tuah coin was actually going to make you any money you deserve to have your money stolen," one commented.
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"Hawk Tuah girl 'Hailey Welch' rug pulled her fans with her new meme coin & made over $3M within 24 hours…One fan invested $1.4M & came out with $46,000 💀," another commented.
"Whoa the Hawk Tuah Coin ended up being a rug pull," one more on X.
"I'm not in crypto but if you got rug pulled by the Hawk Tuah girl the day $BTC reached 100K then probably this game isn't for you," one more user on X.
According to Coin Base, the term "rug pull" in the world of cryptocurrency refers to a type of scam where the creators of a cryptocurrency project suddenly withdraw all their funds from the liquidity pool, leaving investors with worthless tokens.
Understanding the term rug pull
According to CoinBase, a rug pull is a type of scam in the cryptocurrency and NFT space. In this type of scam, developers promote a project to potential buyers only to disappear or abruptly withdraw funds, leaving investors with worthless tokens.
Rug pulls come in two main types: hard and soft. Hard rug pulls are sudden and drastic, causing investors to lose all their assets quickly. In contrast, soft rug pulls occur over a more extended period, with the development team providing a false sense of security while quietly shutting down the project.
CoinBase further outlines four primary types of the scam. The first is Liquidity Pulls, where the creator removes liquidity from the token pool. The second is Fake Projects, which involve fraudulent schemes presented as legitimate projects.
The third is Pump and Dump, where creators artificially inflate the price of a token through coordinated buying, only to sell their holdings at the peak and crash the value. Finally, Team Exit occurs when the project's team suddenly exits, abandoning investors and the project.
This deceptive tactic leaves investors with no recourse as the project's value plummets, and the creators vanish, often with millions of dollars in hand.
Hawk Tuah girl, Hailey Welch's memecoin crashes in the market
On Wednesday, December 4, 2024, Hailey Welch launched her highly anticipated memecoin, quickly gaining attention within the cryptocurrency community.
According to Coin Gape, it became one of the most popular Solana-based memecoins. Within hours of its release, the memecoin reached an all-time high (ATH) of $0.00004028, up from its initial listing price of $0.000007099 — surging more than 10 times its original value.
However, the coin's success was short-lived. Within just three hours, it plummeted by 50% and 91%.
Coin Gape suggests that the rapid spike in value raised concerns among crypto investors, who are often wary of memecoin scams. As the Hawk Tuah coin reached its ATH, top holders quickly liquidated their tokens, causing the price to collapse within 20 minutes.
Despite this, in the last 24 hours, the coin has seen a 168% increase, with a market capitalization of $210.71 million and a trading volume of $431.39K.
Reports from Coin Gape also point to insider trading as a significant factor in the coin's crash, noting that a small group of individuals holds 96% of the total Hawk coin supply. This concentration of supply has raised further concerns regarding the coin's stability and legitimacy.
In an interview with Fortune on December 4, 2024, Hailey Welch stated that her Hawk coin is "not just a cash grab. " Instead, she said that it provides limited information on how it could be used beyond speculation.
At this time, Hailey Welch has not offered any comments regarding the recent crash of the memecoin.
