Is SafeMoon safe? What do you need to know before buying SafeMoon, and what are some of the risks facing SafeMoon investments?
Well, the question of whether SafeMoon or virtually any other cryptocurrency is a safe investment is quite debatable, especially when you consider the volatility of its price action and the unpredictability of the larger crypto market. But crypto experts advise that the biggest threat to the safety of crypto investments has to be rapidly rising cybercrimes targeted at the crypto industry and investors.
In the first half of the year 2021, for instance, CipherTrace reports that crypto investors lost more than $681 Million to Crypto thefts, frauds, and hacks. And although the report notes that there was a significant reduction in these losses from the losses reported in 2019 and 2020, the nature of hacks and related crypto crimes are as brutal as ever.
In an earlier cybercrime report, the Federal Trade Commission (FTC) indicated that crypto-related crimes had increased by an average of 312% annually between 2016 and 2020. Their report had as mentioned that most of these crimes were against Bitcoins, but the recent CipherTrace report indicates that these criminals are increasingly targeting DeFi and alternative forms of crypto investments.
Looking at the two reports, you can’t help but notice just how dynamic cybercrime is and the extent to which such new fads like meme currencies are exposed to these cybercrimes.
But what does all this mean to SafeMoon investments? We answer this by looking at what you need to know before making a SafeMoon investment.
What To Consider Before Buying SafeMoon?
For starters, you need to understand that any SafeMoon you buy today is not immune to volatility, and neither is it safe from cyber theft and hacks.
To understand how SafeMoon token prices can be, the SafeMoon LLC CEO John Karony says that the meme coin’s value shot by more than 780% in the first 5 days of launch. The CoinMarketCap also indicates that SafeMoon token prices are up by more than 10,000% less than a year after its launch.
But you also need to know that between May and July 2021, this meme coin dipped and lost close to 80% of its value. And this goes to show just how volatile its price fluctuations can be and the dent they may have on your crypto portfolio.
With this in mind, now assess your risk tolerance and use it to determine the much you need to invest in SafeMoon. The majority of crypto experts recommend that you hold between 5% and 40% of your investments in cryptocurrencies like SafeMoon. But before you start buying SafeMoon, you need to analyze its price action carefully and determine if you can stomach these fluctuations.
Dan Herron, the Chief Financier Planner for Elemental Wealth Advisors, emphasizes the need for every crypto enthusiast to “understand that (cryptocurrencies like SafeMoon) are very volatile investments, so if big fluctuations cause you to lose sleep, this isn’t the space for you.”
Lastly, you need to ask yourself if you have the much-needed market analysis skills needed to start trading crypto. It is only after mastering a trading strategy, coming to terms with SafeMoon’s volatility, and understanding that you are not immunes to crypto investment risks that you can ask about the different risks associated with a SafeMoon investment.
Check Out: The 5 Best Ways To Buy SafeMoon
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
What Are The Risks Associated With Buying SafeMoon?
There currently are two primary threats to SafeMoon and virtually any other cryptocurrency, i.e. untamed volatility and cybercrimes.
We have already illustrated how volatile SafeMoon crypto prices can be, which is indicative of just how much you stand to lose or gain by investing in the meme coin. We would, however, like to add that unlike the losses from cyber theft and hacks, losses to SafeMoon price fluctuations are impermanent. As soon as the market and the SafeMoon token rallies again, the meme coin’s value will rise again and get you back to profitability.
The CipherTrace report indicates that you may lose your investment to cybercriminals through theft, hacks, or fraud. In the case of hacks, you will lose your meme coins if your digital wallet is hacked, if the crypto exchange where you store your altcoins is breached, and if the DeFi protocol or crypto staking platform where you have staked your SafeMoon is hacked. Such a loss is almost always permanent, and there is no way of ever recovering the lost coins.
Other Scams To Look Out For
Initial Coin Offerings (ICOs) for fake altcoins
SafeMoon recently rolled out an ambitious rod map highlighting its plans, and one of its proposed developments is the SafeMoon altcoin Launchpad. But before you start subscribing to ICOs on this or any other Launchpad, you first need to learn how to differentiate between legit and fake ICOS.
During the last ICO craze, the crypto industry was treated to numerous multi-million dollar fake ICOs whose initiators disappeared with investor funds or tricked everyone into investing in a useless/valueless altcoin. Some of the things you need to consider when determining if an ICO is worth investing in, checking the authenticity of its whitepaper and determining if it seeks to solve a real-world problem. You also need to vet the reputation of its founders and the feasibility of its roadmap.
Rug Pull Scams
The recent CipherTrace crypto crime report indicates that DeFi related scams are on the rise, and we can’t help but be convinced that rug pull schemes account for a significant percentage of these crimes. In a classic rug pull scam, a developer comes up with a crypto investing program, be it a liquidity pool or stalking platform that promises an above-average return on investment.
But as soon as investors trust the brand and deposit their SafeMoon assets, they pull down the platform and run away with this investment. The two primary ways they usually pull this off is by either blatantly taking down the program and ceasing communication or by leaving a backdoor that they or their cronies use to ‘hack’ the program and run away with your SafeMoon tokens.
Crypto pump and dump
Crypto pump and dump, on the other hand, relates to manipulating SafeMoon token prices. It is an old trick that moneyed investors would use to pump up stock prices by buying as much as possible or enough to spark a price rally. But as soon the stock prices peak, they dump all their holdings at the high price and leave everyone else holding the bag.
In the crypto-verse, pump and dump schemes are often perpetuated by supposed crypto analysts and experts. Most achieve this by providing misleading and blatantly false information about an altcoin with the aim of inspiring a bear-run by instilling fear in investors or kicking off a bull-run by giving investor’s false hope. They and their cronies will have taken either long or short positions against the altcoin and will liquidate them as soon as the altcoin reaches the desired price level.
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How To Keep Your SafeMoon Safe
The first step you can make towards keeping your altcoin’s safe is by understanding all the risks affecting your investment. The good thing is that such entities as CipherTrace and the Federal Trade Commission (FTC) are constantly updating the crypto community with lists of emerging crypto scams and how to avoid them.
You also need to learn how to mitigate against all these risks and take practical steps to keep your coins safe. For instance, you can protect your SafeMoon tokens from loss through hacks by storing them in a reliable hardware wallet that keeps them offline. You can also avoid losing your investment to fake ICOs, rug pull, and pump and dump scams - by carefully vetting these platforms and their developers.
Crypto exchanges and digital wallets have also integrated multiple highly effective measures around their platforms to help keep your investment safe. These include multi-factor authentication, insured investor deposits, email whitelisting to prevent phishing, and even the option of using the exchange’s cold storage. You need to activate all of these security measures if you are to keep your SafeMoon tokens safe.
SafeMoon Security Vs Privacy
Even as you orient yourself with the different risks facing your SafeMoon investments and how to keep them safe, you need to appreciate that there is a world of difference between crypto security and privacy.
In this post, we have been addressing SafeMoon security, which involves keeping your tokens safe and preventing illegal access or theft. Security, therefore, involves understanding all the risks your crypto asset is exposed to and their remedies. A large part of this involves keeping abreast with the industry's new and monitoring cybercrime reports from different agencies to familiarize yourself with emerging crypto-threats and how to avoid them.
SafeMoon privacy, on the other hand, has everything to do with the handling of your personal information. If we were discussing SafeMoon privacy, we would have talked about how the different parties involved in a crypto transaction keep your data private.
From the Binance Smart Chain where SafeMoon transactions are recorded to the exchanges and digital wallets holding our tokens. Here we would be querying the level of anonymity Safe Moon transactions are exposed to, how they store both your transaction and personal data, and if it is ever shared with third parties.
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Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
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