Is Safemoon Safe to Invest In?

Is Safemoon a Safe Investment? 

Last Updated November 8th 2021
15 Min Read

In this article, Trading Education shares insights into some of the essential factors to take into account which will guide you in your quest to know if Safemoon is a safe investment or is Safemoon safe to invest in.

Safemoon Protocol is one of the thousands of decentralized applications on the market today. 

The extensive patronage of the DAPP has resulted positively in the price of its native asset, Safemoon. 

While many people have already forked huge sums of money behind the cryptocurrency, millions continue to remain sceptical about the legality and safeness of the digital token. 

This is the primary reason why the keyword, “is Safemoon a safe investment” input in Google brought forth 439,000 results in just 0.55 seconds.

Although some legitimate traders and investors are interested in learning more about the Safemoon Protocol so that they can decide for or against investing in Safemoon, hackers and scammers are also assessing the possibility of involving the digital currency in dark web activities

To give you extensive evidence as to the threat cybersecurity poses to the use of Safemoon and other tokens, let us consider recent findings from Crypto Head

According to the crypto news outlet which sourced information from the Federal Trade Commission (FTC), since 2016, cybercrimes involving cryptocurrencies have soared 312%on the average yearly.

There are different ways of cybercrimes but the most consistent is related to the theft of crypto holdings. 

One thing several traders and investors including novice and established do not know is that investing in Safemoon through cryptocurrency exchanges does not guarantee the protection of your holdings. 

This is because the accounts you create on exchanges that list Safemoon for trading such as Gate.io, ZB Global, Bitrue, BitForex, and BitMart are called CUSTODIAL ACCOUNTS.

So, What Is A Custodial Account? 

In centralized finance, a custodial account is a financial account opened and controlled by someone over 18 for a minor. 

In decentralized finance, a custodial account is a financial account opened and controlled by two different parties who are over 18. 

The first party is the account holder whose personal identity was used to set up the account. 

The second party is the wallet holder whose technological innovation and security are used to secure the account. 

Therefore, you as an account holder (first-party) are entitled to set up passwords for access to your accounts. 

Cryptocurrency exchanges (second party) are entitled to set up private keys (passcodes) that grant them access to your Safemoon holdings.

Failure on the part of an exchange to secure the holdings of investors is what has contributed to major cryptocurrency heists globally. 

The biggest so far was the theft of $600 million in the form of United States Dollar Coins (USDC) and Binance Coins (BNB) in August 2021.

In addition to hackers breaching security systems, scammers have found ways and means to exploit the fear of missing out (FOMO) on gains. 

Because of Safemoons exploits within eight (8) months and the entire cryptocurrency space in 2021, scammers have been luring desperate unsophisticated traders and investors. 

What they do is find novice traders on social media (Facebook, Twitter, Telegram, Reddit, and Quora) and send them wallets to send their money to so that they can invest them into high percentage yielding pools. Once funds are sent, they disappear into the wind. Due to the decentralized nature of the digital finance world, there are no representatives to hold accountable. 

This is the primary reason why the British Broadcasting Corporation (BBC) continues to warn citizens of the United Kingdom (UK) and the world about innocent people being scammed out of millions of pounds.

The information presented will guide you in keeping your Safemoons secure.

 What To Consider Before Buying Safemoon? 

Safemoon, like all cryptocurrencies, is a very volatile investment

If you are looking for a safe investment that will bring you consistent passive income, then you should not invest in Safemoon or other cryptocurrencies. You can choose Treasury Bills and Bonds that have a safe fixed interest rate

Safemoon is not the ONLY volatile digital coin on the market today. Several coins came after the launch of the native asset of the Safemoon Protocol as a tradable token in March 2021 and they are more risky investments.

Investing in Safemoon poses a great risk to your capital.

The volatility associated with cryptocurrencies is so huge several analysts feel cryptocurrencies are more volatile than the word “volatility” with BITCOIN at the top. 

To give you an extensive analysis of the unpredictable nature of Safemoon, let us consider a summary of the token’s price performance from March to date.

Safemoon appeared on cryptocurrency exchanges that list the token for trading on Saturday, 13th March 2021 with an opening price of $0.00000002

It reached an intraday high of $0.00000011, an intraday low of $0.00000002, and eventually closed the day at $0.00000008. Trading volume for the day was an impressive $15,308,067 ($15.3 million). 

Safemoon ended March with a price of $0.0000003. Over 18 days, Safemoon increased by 1,400% for its holders. 

Three weeks later, on 20th April 2021, Safemoon reached an all-time high price of $0.00001399. Trading volume for the day was $144,768,343 ($144.7 million). Within five (5) weeks, Safemoon increased by as much as 69,850% in price and 845.7% in trading volume. With April under perspective, the statistics presented proved that investors were heavily involved with the token and saw it as a good long-term investment. 

Since bearish seasons normally follow bullish days, numerous activities such as Elon Musk’s delisting of Bitcoin as a payment method for TESLA products and wider crackdowns by China and Turkey as to the use of cryptocurrencies saw a drop in the price of digital currencies. 

This saw Safemoon plunge from its all-time high to $0.00000438 on 31st May 2021. This saw Safemoon shed as much as 219.41% in 30 days.

Several investors felt that Safemoon will carry on with its bullish nature. Unfortunately, it continues to trade far below its May 2021 closing. As of Friday, 5th November 2021, Safemoon trades below $0.000005. This is less than 70% of its all-time high price in April 2021. 

In the space of 5 months, Safemoon moved from a digital asset with a market capitalization of $5,126,639,161 ($5.1 billion) to have a market value of $664,005,194 ($664 million) by September 2021. This means that it moved from being classified as a medium cap digital asset gaining grounds to join the ranks of large-cap digital assets to a low cap digital asset.

What this means is a $10,000 investment has dropped to $3,000, $1,000 is now worth $300, and a $100 investment is now valued at $30.

This is why Trading Education recommends adhering to the essential principles of trading and investing such as diversifying your portfolio and risking 5% to 10% of your capital at a go. 

In addition to this, you should not be fully sold into the cryptocurrency mania due to news reports of crypto millionaires. Have a conventional retirement plan and spread your investments across different sets of assets such as stocks, indices, crypto, commodities, and metals

In such a case, losses from one asset class can be made up for by the enormous gains from other asset classes. 

Trading Education Advice: Cryptocurrencies may have made some people millionaires but it is not a golden ticket to riches. If you still want to risk your capital investing in Safemoon, we would like you to consider risks and rewards. In that situation, you invest in Safemoon an amount you can write off as bad debt.

Check Out: Pros and Cons of Investing in Safemoon

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What Are The Risks Associated With Safemoon (Safemoon)? 

Risks in terms of a crypto project can be categorized into two

There are risks associated with the Safemoon Protocol and the risks associated with investing in the native asset of the Protocol called Safemoon

Risks Associated With the Safemoon Protocol 

The Safemoon Protocol was built on the Binance Smart Chain

What this means is that it continues to thrive on the security standards of blockchain technology. 

With the multiple security levels on the Chain, it would be difficult for hackers to cause any cybersecurity breaches in the short, medium, and long term

Note that in the event something bad happens to the Binance Smart Chain, it is not only the novel token of the blockchain, Binance Coin (BNB) that will take a hit. 

All the DeFi tokens on the chain including Safemoon will drop substantially in price. 

Risks Associated with Investing in Safemoon 

The biggest risk associated with investing in Safemoon and other digital tokens comes in the form of cyber fraud and hacking. 

There have been multiple reports of cryptocurrency investment scams after the financial markets recovered from the high lows suffered during the pandemic. 

To be specific, the Federal Trade Commission (FTC) reports more than 7,000 cases related to crypto scams since October 2020. 

Safemoon is ranked the same way as meme-inspired currencies such as Dogecoin (DOGE) and Shiba Inu (SHIB) when it comes to cyber threats. 

These currencies are also promoted on social media platforms as going to the moon, heading north, about to explode, and soaring beyond traders' imagination

Some scammers took advantage of the popularity of Tesla Mogul, Elon Musk, and the impact of his tweets and posts on social media. The Federal Trade Commission further reports that several scammers created accounts on social media, Twitter in particular. They formed a team and gained huge followership on the platform. They then impersonated Elon Musk by using the same profile picture and tweeting bullish sentiments about Dogecoin (DOGE). 

They ended up taking off with more than $2 million, the report concluded. 

This is the primary reason why Trading Education cautions you to be careful when it comes to who or what organization you are dealing with in the faceless world of the internet.

Although you may be desperate because of an upcoming rent, utility bill, or mortgage payment, be careful when it comes to your hard-earned money. 

There are several ways through which you can earn Safemoon

But these are legitimate ways that will see you go through processes such as working to be paid in Safemoon, trading Safemoon, or lending money to a friend who is great at investing in Safemoon and cryptocurrencies in general. 

Trading Education Advice: Always conduct independent research about all kinds of cryptocurrencies before you invest in them. 

After you are done, kindly go through the best ways and places to buy Safemoon such as Gate.io, ZB Global, and others that are regulated (get to know their pros and cons). 

From being worthless ten (10) years ago to forming a trillion-dollar economy in 2021, the cryptocurrency market continues to remain unpredictable. 

Now that you know the risks associated with investing in Safemoon, stay away from get-rich-quick schemes and crypto lotteries.

Other Types Of Scams To Look Out For 

There are several types of scams associated with the use of all forms of cryptocurrencies. Through the experiences of our experts, we found four (4) but there may be more. Below is a summary of scams you should watch out for. 

Initial Coin Offerings (ICOs) For Fake Cryptocurrencies

This is an unregulated way by which funds are raised by new cryptocurrency ventures. 

This is the crypto version of the initial public offering (IPOs) for stocks. 

They have become extremely popular in 2021 due to the rise in the demand for crypto-related products. 

Many shadow organizations have started cropping up. Representatives behind a particular token raised funds and allowed the coin to survive for two to three months. 

After that, they cash in on their gains and leave the project idle. 

In that instance, the investors are left in the red with nothing to hold on to.  

Crypto Pump and Dump Schemes

Pump and dump is not a recent development. It has been in the financial markets for decades. 

This is where several holders of a particular token do everything in their capacity to promote the token. 

They will go length and breadth to use all forms of medium (videos on YouTube, short, medium, and long-form articles on the web, and posts on Twitter, Facebook, Reddit, Quora, and Telegram) to promote the token. 

One thing novice traders and investors are alien to is that every investor has a price ceiling they have set for their investments. Once this ceiling is tested, these individuals lock in gains. 

The resultant effect of this is large selling

This leaves the asset to plummet by more than 20% to 50% within a three (3) day period.

Most oftentimes, the price of the asset never recovers and you lose your entire investments.

Broker / Dealer Fraud

You should also watch out for digital asset management firms. 

The largest digital asset management firm is Grayscale

Because of the success of the company, some individuals have formed several investment funds that look legitimate to the naked eye. 

Unfortunately, if some of these funds go through the rigorous assessment process of the Securities and Exchanges Commission (SEC), depending on the circumstances, they may need to register as an exchange or broker-dealer. 

Take note of the numerous investment funds online. 

More importantly, get to know if they have the necessary licenses and certifications to operate in your geographical location. 

Market Manipulation

One of the experts at Trading Education recently came across differences in the price of the same cryptocurrency on three (3) different platforms. 

The explanation he received was that prices are normally affected by the trading volume of the platform that supports a particular cryptocurrency. 

Therefore, trade and invest in Safemoon on high-volume exchanges so that you can profit from a potential price increase – something you might miss if you are on a low-volume platform.

How To Keep Your Safemoon Tokens Safe 

One of the questions that continue to trend online is what are the safest places to store Safemoon

This is a question many people ignore but they should not when it comes to investing in Safemoon. This is because Safemoon is relatively a new crypto project. 

Unlike Ether (ETH), Bitcoin (BTC), Cardano (ADA), Binance Coin (BNB), Litecoin (LTC), Dogecoin (DOGE), and Dash (DASH) that have multiple ways of storing Safemoon, Safemoon has few ways. 

Due to the hacking of cryptocurrency exchanges as well as certain blockchain technologies that house some of the exchanges, you should store your Safemoons in extremely secure places. 

You can store your Safemoons on centralized and decentralized platforms

Centralized Platforms include cryptocurrency exchanges such as Gate.io, ZB Global, BitMart, BitForex, and Bitrue among others are regulated, have high liquidity, and provide security measures to protect your account as well as tokens.

Decentralized Platforms include wallets (Trezor, TrustWallet, Free Wallet, and MetaMask) that can access the only decentralized exchange that supports Safemoon, PancakeSwap

Trading Education would like to recommend TrustWallet (decentralized) and Gate.io (centralized) because they have existed for quite some time. In addition to this, they have a great reputation that has been certified by thousands of users.

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Safemoon Security Versus Privacy 

You should know that security and privacy are two different things. Whatever happens, if you adhere to the information we earlier pointed out, you are going to enjoy security. This does not necessarily mean you are going to enjoy privacy. 

Safemoon Protocol and Safemoon coins security

The Shiba Inu Protocol gains its security from the Binance Smart Chain

In the same way, the cryptocurrency exchange (centralized platform) that holds your coin provides the needed security for Safemoon holdings. 

Moreover, the security of your Safemoon tokens on a wallet depends on your ability to hold onto your private keys (passcodes) ─ which is the only way to access your holdings. 

Safemoon Protocol and Safemoon Privacy 

Because of the decentralized nature of the Safemoon Protocol and the Binance Smart Chain as a whole, you can buy and hold the novel token and continue to reap impressive annual percentage yields (APYs) of up to 80%. No traditional financial institution can interfere with your activities on the protocol. 

What’s more, you can maintain some form of privacy if you choose to store your coins on a digital wallet. Due to their decentralized nature, no one will request monthly reports of which or what coins you have in your wallet. Therefore, we can say privacy is high on the Safemoon Protocol as well as a digital wallet

On the other hand, maintaining privacy when it comes to investing in Safemoon through centralized exchanges is difficult. 

This is because centralized exchanges as part of compliance with Knowing Your Customer (KYC), Anti-Money Laundering (AML), and Countering Terrorism Financing are required to submit periodical reports about the transactions on their platforms. 

Large transactions are normally highlighted and investigated secretly. In case the authorities require the personal information to investigate a particular transaction, the exchange will have no choice but give the individual up to save the continuous existence and operations of their platform. 

If you want security and privacy, you should use wallets and decentralized exchanges. In addition to this, cryptocurrencies such as Dash (DASH), Monero (XMR), and ZCash (ZEC) are privacy protocols and tokens you can look into. 

The Bottomline ─ So, Is Safemoon Safe To Invest In?  

YES! Safemoon is safe to invest in as per reports conducted by audit firm CertiK. 

Aside from CertiK, numerous analysts and experts believe the coin will not head for extinction zones in the future. 

So long as the Binance Smart Chain and your wallet holder are secure, the protocol and cryptocurrency are safe to use and invest in respectively. 

Whatever happens, you should know that authorities are closing in on anonymous transactions online, so trade and invest cautiously. 

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