Analysts warn investors of the dangers of investing their money in SafeMoon. Altcoin creators are declaring the cryptocurrency as a decentralized finance token that will skyrocket in price.
SafeMoon has increased by 1,320% since its launch in March. It also became very popular thanks to celebrities such as YouTuber Jake Paul and rapper Lil Yachty who talked about the token on their social media accounts.
However, analysts think SafeMoon could be a pump & dump scam that could hurt late investors. Pump and dump buy a lot of coins in a group and raise their price; then it means disposing of these coins.
Susannah Streeter, a market analyst at investment company Hargreaves Lansdown, said, “In social media, influencers imposing their own preferred coins increases earnings. This model seems to be geared towards helping the original owners of the currency prosper, because other investors follow them and drive the price higher, ”he said.
SafeMoon caught the attention of investors after the rally of Dogecoin, the cryptocurrency that created millionaires overnight.
Warning from the expert about the altcoin project: “SafeMoon is unlikely to hit the moon”
Edward Moya, senior market analyst for the Oanda currency platform, told Business Insider that “Dogecoin has greatly influenced the interest in SafeMoon, but received a warning against the new token.”
Many see this coin as a pump and a dump. The excitement for Safemoon started with claims that it would see a similar rise as Dogecoin. It seems that Safemoon is unlikely to reach the moon.
Regulators have long warned against investing in cryptocurrencies due to the volatile nature of this new asset class. Still, analysts say investors should be more careful about investing in some cryptocurrencies.
Bitcoin (BTC), whose market capitalization currently exceeds $ 1 trillion, has become more common as institutional investors began to allocate some of their portfolios to BTC, but little is known about some altcoins whose price is rising.
While Bitcoin is considered a digital gold that can act as a hedge against inflation and powers the blockchain network on which Ethereum (ETH), non-exchangeable tokens (NFTs) and other applications are built, some altcoins seem to have no use cases.