In March 2021, Safemoon emerged on the cryptocurrency list and rapidly gained interest from crypto enthusiasts, traders, and investors.
There's a level of scepticism around Safemoon. Some people believe it could be a scam. We don't know about that. We try to consider facts instead of rumours. We can say that Safemoon is volatile and speculative for investors, but many new cryptocurrencies are.
With a lack of liquidity and volume, is it better to invest or trade Safemoon? Can Safemoon make you a millionaire, or is it safer to trade Safemoon? Recently, Safemoon launched NFTs on Opensea.io, one of the most popular NFT marketplaces. Interest in NFTs has grown exponentially in 2021, so adding NFTs to its portfolio could be an excellent move for Safemoon.
This post explores whether it is better to invest or trade Safemoon. In conclusion, you will decide on your aims as a cryptocurrency investor or cryptocurrency trader.
What Is Safemoon (SAFEMOON)?
Safemoon launched with 777 trillion SAFEMOON tokens. It's a community-driven project that uses SAFEMOON tokens to generate liquidity for DeFi. It uses proof-of-authority (PoA) consensus and is built on the Binance Smart Chain (BSC) running on the BEP-20 standard.
Each SAFEMOON trade has three core functions:
- Reflection: 10% transaction fees. 5% is distributed to SAFEMOON token holders.
- LP (Liquidity Pools) Acquisition: Transaction fees distributed to liquidity pools on PancakeSwap and other platforms.
- Burn: Burning SAFEMOON tokens help stabilise prices.
Safemoon has high levels of security for yield farming. You can earn interest from staking coins, which, for cryptocurrency investors, is a bonus for maximising growth potential from coin purchases.
Check Out: Could Safemoon Be A Millionaire-Maker?
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
Is It Worth Investing In Safemoon?
Safemoon is a relatively new cryptocurrency. Nobody can predict growth potential, not even cryptocurrency experts, but purchasing SAFEMOON tokens is currently low. It's appealing to the small investor who cannot afford to buy top-performing coins like Bitcoin (BTC) or Ethereum (ETH).
A benefit of investing in Safemoon is the facility to stake SAFEMOON and earn rewards. The way it works is there's a 10% fee for each SAFEMOON transaction. 5% of the transaction goes to SAFEMOON token holders. The other 5% splits again. Half goes to PancakeSwap liquidity pool, and the other half goes to Binance coin (BNB) via a smart contract.
Every time someone sells their SAFEMOON, you'll receive a share of the rewards proportionate to the size of your stake.
Cryptocurrency investors could be reluctant to invest in SAFEMOON because of the massive supply cap of a quadrillion coins. If you understand supply and demand, you'll appreciate that the bigger the supply, the less demand and vice versa.
Logically, if demand is low, prices are less likely to rise as high as other coins with a smaller cap. Safemoon burns coins regularly to reduce supply, but it may not be enough to increase demand for Safemoon. Investors always look for the highest possible return, so there's more institutional interest in other altcoins with smaller supply caps.
That said, what we've discovered with cryptocurrencies is that logic often plays little part in success. Dogecoin (DOGE), for instance, shot to the top ten list of cryptocurrencies. The coin has little purpose or utility, but it captured public interest and support from influential investors like Elon Musk, Tesla CEO, because of the fun, dog-themed token.
Safemoon has established itself as a valuable meme brand. It's already in the top 250 cryptocurrencies, which exceeds 15,500 coins. Safemoon focused on creating a significant social media presence and gathered followers with an almost cult-like community.
There are dozens of dog-themed meme coins on the cryptocurrency market, and all have a lot of interest from crypto enthusiasts. Safemoon has nothing distinctive from other meme coins. Building a loyal following based on social media presence could be a weak foundation that could easily topple with a smidgeon of bad press.
Experienced cryptocurrency investors usually have a checklist to follow before putting their money into an investment. Before buying Safemoon, ask yourself why you should invest in Safemoon. What benefits can Safemoon offer a crypto investor that other coins cannot provide?
Institutional investors have little interest in a cryptocurrency that doesn't differentiate itself from others. Additionally, Safemoon is not an independent blockchain as it's built on Binance Smart Chain (BSC).
The answer to "is it better to invest or trade Safemoon'' is not at first apparent. Trading SAFEMOON isn't an option right now because you can only trade by converting it to BNB coins. If you want to invest in Safemoon, consider the risks of investing in highly volatile cryptocurrencies with limited liquidity or volume. If you're going to invest in Safemoon, you can do it for a nominal investment as the price is so low.
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Can You Trade Safemoon?
SAFEMOON is highly volatile and has poor liquidity. The cryptocurrency market has always been volatile, but coins such as SAFEMOON might be more so than usual. That's bad enough, but the main issue with trading SAFEMOON is it isn't available on the leading cryptocurrency exchanges. You cannot trade SAFEMOON directly. The only way to trade SAFEMOON is to swap it for BNB via the decentralised exchange, PancakeSwap.
In time, as leading cryptocurrency exchanges start to list SAFEMOON, you may be able to trade the coin directly.
Conclusion: Is It Better To Invest Or Trade Safemoon?
The answer to is it better to invest or trade Safemoon is not immediately transparent.
Here are the current issues:
- You cannot currently trade SAFEMOON directly
- SAFEMOON is not available on the leading cryptocurrency exchanges
- The massive supply cap limits growth potential
Very few merchants accept Safemoon as a payment method. It has no unique features, no real-world utility or disruptive technology that gives it an edge over competitors.
Transaction speeds are comparable to other cryptocurrency networks, and the 10% transaction fee is expensive for some investors who may want to move their SAFEMOON coins regularly.
One way of circumnavigating the investment concerns is to consider staking SAFEMOON and earning rewards. As mentioned, if you stake SAFEMOON, you receive a share of the 10% transaction fees when SAFEMOON holders sell their coins. To receive generous rewards would require a significant investment to make it worth your while.
With over 15,500 listed cryptocurrencies, various established tokens have more potential than Safemoon. The only significant benefit of investing in Safemoon is the low price. For $10, you could buy several million SAFEMOON tokens, forget about them and see what happens over the next year or so.
The CEO of Safemoon owns more than 50% of the liquidity. With 10% transaction fees, insiders in Safemoon are making a very nice passive income. This fact alone has led people to suggest that Safemoon could be a Ponzi scheme. The components of a Ponzi are hefty profits for early investors and, later down the line, the small investors end up with nothing.
There's no proof to suggest that Safemoon is a Ponzi scheme. Many people at first believed all cryptocurrencies were a scam, including Bitcoin. But most cryptocurrency experts and enthusiasts believe that digital assets are the way forward. Most people in the future will have non-custodial wallets and take care of their finances that way.
Cryptocurrency experts believe that the networks with the most innovative and disruptive technology present the best opportunities for investment because of the potential for real-world utility to implement radical change across the globe.
Please note that the above information is not providing advice on tax, investment, or financial services. We provide the above information without consideration for risk tolerance and a specific investor's financial circumstances.
Trading or investing in financial instruments such as cryptos may not be suitable for all investors. It does involve risk and the possibility of a loss of capital. There are no guarantees for profiting from cryptocurrencies, and it's advisable only to risk what you can comfortably afford to lose.
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Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
FAQs
Where can I buy Safemoon?
Currently, you can buy SAFEMOON tokens at the following platforms: Bitrue, ZTZ, BG, Gate.io, Bitrue and PancakeSwap.
Why isn't SAFEMOON available on the leading cryptocurrency exchanges?
Cryptocurrency exchanges are wary of adding new coins because they do not want to risk their users' money. Once a cryptocurrency network has become more established with more volume and liquidity, they are more likely to be added to more exchanges.
How do I store my SAFEMOON tokens?
You can download the Safemoon secure wallet from Google Playstore and Apple App Store or use TrustWallet. However, the latter is only available on mobile devices and lacks some functionality compared to other wallets.
Is Safemoon legit?
Yes. Safemoon appears to be a legitimate cryptocurrency.
Will Safemoon reach $0.10?
Safemoon may struggle to get to $0.10 and above. With such a massive supply, the demand is low. Cryptocurrency experts suggest SAFEMOON may not rise above 1 cent over the next 5-7 years.
Can you sell Safemoon?
If you want to sell Safemoon, you need an account with a cryptocurrency exchange listing BNB. You can also sell it from TrustWallet.
Why are Safemoon Transaction fees so high?
Safemoon wants to encourage SAFEMOON buyers to HODL the coins for long-term investment. By charging a 10% fee, it aims to discourage selling and incentivise SAFEMOON users who hold on to their coins by distributing 5% rewards. A percentage of the transaction fee is distributed to a liquidity pool to maintain price stability.
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