Is It Worth Investing in Safemoon?
As major coins like Bitcoin, Ethereum and Dogecoin are taking the crypto market by storm, new ones are cropping up almost every day. The newest addition to the crypto space is SafeMoon, a blockchain-based digital asset that is as intriguing as it is confusing.
Although SafeMoon is barely three months old, it is creating an increased buzz, with some people saying that it could give Dogecoin a run for its money. SafeMoon is selling the idea that it has created an infrastructure that will help phase out the wild price swings endemic to Bitcoin, Dogecoin and many other cryptocurrencies.
The coin has already attracted over 2 million investors and is currently trading at $0.000005, according to CoinMarketCap. While this looks like an insanely low price, it is a staggering improvement from the $0.00000001 launch price.
With a market cap of $2.9 billion, SafeMoon is a piker when compared to the more established cryptos like Bitcoin ($735 billion market cap) and Ethereum ($325 billion market cap). However, despite its newness and outlandishly low price, SafeMoon is gaining traction fast, a proof that there is an ingrained appetite for cryptocurrencies right now.
So, should you invest or take a pause? Read on.
- What Is SafeMoon?
- How Does SafeMoon Work?
- SafeMoon Price History
- SafeMoon Price Predictions for 2021
- How to Invest in SafeMoon
- Is SafeMoon A Good Investment?
- What Do Experts Say About SafeMoon Investment?
- Conclusion: So, Should I Buy SafeMoon?
What Is SafeMoon?
Although SafeMoon has some resemblance to blockchain-based coins like Bitcoin, it is also starkly different. The coin debuted in March 2021 but has already attracted a lot of attention, with more than 2 million users scrambling to be part of its potential success.
One thing that sets SafeMoon apart from the other blockchain-based digital assets is the fact it imposes a 10% penalty on investors who sell their tokens. 5% of the penalty fee is then redistributed as a reward to users who hold on to their tokens.
This strategy is used to discourage people from selling their tokens which usually results in a major price crash that may wipe the crypto out of the market. According to the founders, when whale investors sell off their tokens later, it introduces wild price fluctuation that will eventually discourage other investors from hopping aboard.
This strategy may make SafeMoon a better alternative to Dogecoin, which has recorded wild price swings in the last year. However, forcing people to hold onto their tokens may also attract a number of setbacks which we will discuss later.
According to their official website, SafeMoon is more of a DeFi (Decentralized Finance) token than a cryptocurrency.
How Does SafeMoon Work?
The cryptocurrency uses a protocol that discourages day traders while rewarding those who hodl SAFEMOON tokens.
Here is how this works.
When you sell your tokens, you are charged a 10% penalty fee. For instance, if you decide to sell 5000 SAFEMOON tokens, you will lose 500 of them. This strategy is usually aimed at whale investors who have millions of tokens. While a user with a few thousand tokens may not feel the real heat of this penalty, the fee usually becomes outlandishly higher when more tokens are involved.
For example, an investor who sells 1000 SAFEMOON tokens will only lose about $0.0025 worth of tokens, a whale investor who sells 50 million tokens which lose up to 5 million tokens.
The fact that users who hodl are rewarded also encourages more people not to sell their tokens too early and slump the price or cause a possible market collapse.
SafeMoon also employs a manual burn instead of automatic. This is a strategy where a certain amount of SAFEMOON tokens are manually removed from the circulating supply. Unlike automatic burn, manual burn allows more control and makes it easier to implement the rewarding system.
SafeMoon Price History
SafeMoon started from a degradingly low price. When it was launched in March 2021, it was trading for lower than $0.00000001. And although the price has seen a significant improvement in the last two months, the coin still has a long way to go.
The founders are doing a lot to ensure that it catches up with the more established coins. For instance, CEO John Karony and COO Jack Haines recently revealed that they will be using Minecraft to test new useful features to incorporate into their protocol.
And while SafeMoon’s big purpose is to fight volatility, it appears to be still a victim of the same. For instance, between April 20th and April 23rd, SafeMoon dropped from $0.00001194 to $0.000004567. That is a 61.7% dip in just three days.
For the whole of March 2021, SafeMoon traded at a discouragingly low price. There was some improvement in April, but still, you would have trouble counting the number of zeros in the price. The biggest price leap came around mid-April when the price jumped from $0.0000024 to $0.0000125 between April 18th and 29th, a 412% increase in two days.
Of course, the price dropped by 61.7% in three days and hasn’t gone as high ever since. There have been some fluctuations in April and May, which goes to prove that not even forcing people not to sell their tokens can stand in the way of volatility.
Between May 12 and May 19, SafeMoon price dropped by 80%. This was followed by another 70% intra-day decline that came after the Chinese government announced that it would be cracking down on cryptocurrencies.
SafeMoon is currently trading at $0.000005 with a market cap of $2.9 billion and a fully diluted market cap of $4.9 billion, according to data from CoinMarketCap.
Read More: 10 Cryptocurrencies with Strong Buy Ratings
SafeMoon Price Predictions for 2021
Although SafeMoon purports to fight volatility by discouraging people from selling their tokens, it has inevitably become a victim of the same. The huge price dip towards the end of April may mean we don’t have to take SafeMoon’s word for it when it comes to volatility.
Maybe when the price becomes more serious, the volatility will be reduced since the penalties will become bigger. As for now, it doesn’t seem like people mind being fined a fraction of the cents they used to buy SafeMoon. For instance, when you sell 50 million tokens, you will only be fined a mere $25. However, if the price were to miraculously hit $1 in the next few years, you could lose up to $5 million in penalties.
But will the price really go that high? If not, how high can it go?
Most price analysts are optimistic about the future of SafeMoon but in a cautious way.
FXStreet recently reported that SafeMoon might be preparing for a 90% rally. The site points out that although SafeMoon has seen a number of price dips in April and May, it may be on a cusp of a steep rally that will boost its price in the next few days or a week.
Generally, there is a positive outlook concerning the future of SafeMoon. For instance, Wallet Investor predicts that the altcoin may go as high as $0.000035 by the end of the year. The site has downgraded its previous prediction by almost half after SafeMoon’s price dip.
Wallet Investor likes to be conservative, and in most cases, its predictions may border the bearish mark. However, any news that SafeMoon will be going up this year is welcome for investors who are eager to see their investment grow.
Digital Coin Price is less hopeful that SafeMoon will see any significant growth this year. The site predicts that SafeMoon may reach $0.00000728 by the end of this year and $0.00000875 by the end of 2022. This is just a slight increase from the current price, which makes it likely that Digital Coin Price might be a bit bearish.
But still, it is still good news since investors will still enjoy some gains if the market doesn’t change into a bearish momentum. So, while the price could stagnate at a fraction of a cent for quite some time, Digital Coin Price reports that we should expect some uptrend.
Clearly, SafeMoon still has a long way to go before paralleling Dogecoin. If it doesn’t pick up momentum fast enough, current investors may start losing interest and look for an exit plan.
Despite this, there are still signs that the coin may be here to stay. For instance, when Bitcoin recently had its biggest drop in months, SafeMoon surged 90% and started attracting investor interest.
How to Invest in SafeMoon
For the more established cryptocurrencies, we usually have more than one way in which you can invest. However, given SafeMoon’s model, we believe hodling is the only safe strategy right now.
The DeFi discourages day trading and imposes a 10% fee every time you sell your tokens. This means that trading is not a profitable strategy for this crypto. There are also currently no companies that work with SafeMoon, so you cannot invest in it through a related startup.
So, hodling seems like the only option left.
So, how do you HODL SafeMoon? Pretty much the same way you do other cryptocurrencies.
First, you will need to buy a huge amount (but not more than you can afford to lose) of SafeMoon tokens, move them to an external account, then forget about them for some years.
The idea with hodling is that you wait until the price becomes way higher than the buying price before selling your tokens. This might take from a few to several years, depending on how fast the asset grows.
Ready to HODL? Let’s show you how to buy some SafeMoon tokens.
How to Buy Safemoon (SAFEMOON)
SafeMoon is not currently available in major exchanges like CoinBase. To buy it, you can use one of the few exchanges that support it now. These include BitMart, WhiteBit, Gate.io and PancakeSwap. We will be using PancakeSwap for illustration purposes in this guide.
There are reports that the SafeMoon team will be launching its own SafeMoon exchange soon. The team has allegedly raised more than $1 million to be used for this project. This will make it easier to buy SafeMoon in the future.
For now, you will have to go through a fairly complicated process where you buy Binance Coin (BNB) first then swap it for SafeMoon
Here is how to go about it.
Step 1: Open a Binance Account and Buy BNB
Since Pancake Swap is built on the Binance Smart Chain platform, you will first need to open a Binance account if you don’t already have one. You will also need it to buy Binance Coin.
Creating the account is straightforward; just follow the easy steps on the site, and you will be good to go.
After completing your profile, you will need to buy some Binance Coin tokens. The amount of BNB you buy will depend on how many SafeMoon tokens you need to hodl.
Step 2: Download Trust Wallet
Trust Wallet is among the best software wallets that are compatible with Binance Smart Chain. You’ll need this wallet in order to use PancakeSwap. However, since the wallets were originally designed for Ethereum, you will need to activate them on BSC first.
If you don’t want to use a software wallet due to security concerns, you can get a hardware wallet that is much more secure. You might not find many options for SafeMoon since it is still very new.
Step 3: Buy SafeMoon
Instead of using centralized order books, PancakeSwap, like most decentralized exchanges, uses mathematical equations to calculate token prices.
So, just head over to PancakeSwap, choose the SafeMoon token, then swap it with the BNB tokens in your TrustWallet.
After getting your SafeMoon tokens, you can then transfer them to your hardware wallet if you have one.
Just check the site on how to transfer your tokens.
Is SafeMoon A Good Investment?
SafeMoon is still a relatively young crypto. For this reason, there is a lot that we don’t know about it, and so we cannot say outright whether it is a good investment or not.
As we have seen, despite SafeMoons plan to curb volatility, the DeFi token is still recording some notable price fluctuations. For instance, SafeMoon surged a whooping 19,078% within a month. That is from $0.000000073 to $0.000000073.
So, if you invested $7,000 around mid-March, you would make more than a million dollars in a month! That is a pretty good amount for new crypto.
But here is the deal. To do this, you would need to either have great timing or be really lucky. Now, the most interesting part is that the price tumbled in a few days, which put into question SafeMoon’s ability to reduce volatility.
So, for now, we are going to assume that SafeMoon is just as volatile and as any crypto out there, and you shouldn’t make any hasty decisions.
There are also concerns that SafeMoon’s 10% penalty fee model might be similar to that endemic to Ponzi schemes. A Ponzi scheme is some sort of investment fraud whereby early investors make a lot of money from those who join later on.
Some experts have also warned that SafeMoon might be a risky investment since it does not have any real value. According to NetCents’ CEO Clayton Moore, there is no point forcing users to hold onto SafeMoon, yet it has no real value.
"I think investors need to be cautious about a cryptocurrency that has no real utility. It's clear that the SafeMoon team wants to reward loyal users, but if the cryptocurrency has no real use, what's the point of holding onto it forever?" Moore said.
However, the lack of real utility does not necessarily mean that a coin is a bad investment. For instance, Dogecoin, which recently surged, has low utility, but a lot of investors still made millions from it.
This is because most novice investors don’t care about value. As long as SafeMoon’s prices skyrockets and parabolically increase their ROI, people will be willing to put millions into it.
So, what should you do?
Thread carefully. SafeMoon is highly speculative and still in its nascent stages. We can’t yet tell if it has any potential for growth
The lunar-inspired DeFi token is, therefore, very risky and might crash as quickly as it came into the limelight.
What Do Experts Say About SafeMoon Investment?
While SafeMoon is expected to grow this year, several experts have come out to warn that people should not rush or give in to FOMO and invest in it.
A Twitter user called WarOnRugs, which allegedly exposes crypto scams, is worried that the founders might be jeopardizing the coin’s liquidity pool by keeping half of the tokens in circulation to themselves.
"Owner owns more than 50% of the liquidity and refuses to fix it," the account tweeted.
This, according to the Twitter user, could lead to many investors losing their funds in case of a rug pull or exit scam.
"He could pull LP and sell tokens, creating a rug pull. The likeliness of losing all funds: Absolute."
On the other hand, SafeMoon founders maintain that holding back liquidity will help make the coin more secure.
While financial analyst Laith Khalaf is a believer in long-term investments, he warns that SafeMoon’s likeness to a pyramid scheme raises red flags.
"You’re simply reliant on someone further down the line being willing to pay more than you did to turn a profit, which is a risky bet indeed," Khalaf told The Sun.
Lark Davis has been investing in cryptocurrencies for some time and doesn’t think that SafeMoon is ripe for serious investment. In fact, he also believes that it could be a Ponzi scheme.
“Remember, just because you make money off of a Ponzi does not change the fact that it is a Ponzi,” he said.
According to Davis, SafeMoon might end up like BitConnect, another cryptocurrency that crashed in 2018 after securities regulators warned that it had the characteristics of a Ponzi scheme.
The bottom line, we can’t tell yet if SafeMoon is legitimate or not. For now, we will just have to wait.
Conclusion: So, Should I Buy SafeMoon?
We understand that there is a lot of pressure to be among the first adopters of SafeMoon. However, not all cryptocurrencies that make it to the news will live to see the light of day. If you want to buy, we recommend waiting to see if SafeMoon is worth your money. The price will still be low many years from now, so there is really no reason to rush.
In the meantime, you can consider putting your money in more established digital assets like Bitcoin and Ethereum.
This is because SafeMoon is new, and there is a lot we don’t know about it or even the team behind it. Instead of rushing to invest, take some time and do your research in order to make an educated decision.
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Below are some commonly asked questions about SafeMoon investment.
Is SafeMoon legit?
SafeMoon has a whitepaper that outlines what it is trying to achieve; the biggest selling point being that it wants to eradicate volatility. However, there are still some genuine concerns about its legitimacy and other things like what might happen to its liquidity pool.
Having said that, SafeMoon is still young and deserves a chance to prove itself. In the meantime, hold your horses, do some research and decide for yourself whether it is worth buying or not.
Can SafeMoon reach $0.01?
The SafeMoon price might remain at a fraction of a cent for a long time. So, while there is generally a positive future outlook, we don’t think it will be reaching $0.01 any time soon.
This is because for the coin to reach $0.01, it would have to reach a market cap of $1 trillion which would magically make it the most valuable cryptocurrency in the world.
Can SafeMoon hit $1?
From the predictions we have looked at, even the most bullish forecasts don’t see SafeMoon hitting one cent in the next eight years. That means that, although SafeMoon might reach $1 sometime in the future, we would do well to forget about it for now.
So, if you are waiting for SafeMoon to reach $1 before selling, you might have a lot of waiting to do; maybe more than 20 years.
How many SafeMoon coins are there?
There are one quadrillion SafeMoon tokens in existence. 777 trillion of these are available for investors, with 223 trillion being held by the developers.