Cryptocurrencies have captured the imagination of many investors in recent years, with the promise of high returns and decentralized systems offering an alternative to traditional financial institutions.
However, not all crypto assets have lived up to the hype. Some have experienced significant price increases, driven by celebrities and social media communities, only to decline sharply in value later on. One such cryptocurrency is SafeMoon (SAFEMOON) – a token that attracted a lot of attention in 2021 after its meteoric increase in value.
After its launch in March 2021, SAFEMOON saw its price increase by more than 2,000% over the course of just a few weeks. This whopping growth was fueled by a combination of factors, including social media hype, celebrity endorsements, and the promise of large returns.
The cryptocurrency reached its peak in May 2021, hitting $5.75 billion in market capitalization, according to CoinMarketCap.
However, even then, many experts and analysts warned that the hype was unsustainable and that the currency was overvalued. At the time, crypto investor and analyst Lark Davis compared SafeMoon to the Bitconnect ponzi scheme.
Not long after hitting its all-time high, SAFEMOON’s value began to decline, Even though the cryptocurrency market as a whole was experiencing a correction, the crypto token’s price was impacted heavily.
As a result, concerns began to emerge about the long-term viability of SafeMoon’s tokenomics system, with some critics arguing that it was unsustainable and that it could ultimately lead to the currency’s downfall.
And that’s exactly what happened. As of May 17, SAFEMOON’s market cap is standing at just $3.57 million, down 99.9% from its record high. At press time, the SAFEMOON token was trading at $0.000000006353, down 0.66% on the day.
In addition, there are now only 349 holders of SAFEMOON at the moment, according to Etherscan data, down from nearly 3 million during the token’s peak, illustrating the project has an extremely low number of holders, thus, investors’ interest in the coin is close to zero.
Following an upgrade in December 2021 which aimed to increase the cryptocurrency’s quality, security, and accessibility, the decentralized finance (DeFi) SafeMoon V2 (SFM), a Binance Smart Chain (BSC) emerged.
The old SAFEMOON token, thus, in effect, had been replaced by the new SFM. However, the price of the new token has failed to take off following the ongoing scandals, including multiple lawsuits against the project’s executives, as well as several celebrities who publicly encouraged investors to buy the cryptocurrency.
At the time of writing, the new SFM token was changing hands at $0.0001715, up 10.9% in the previous 24 hours. Over the past month, the cryptocurrency is still in the red, down 13.4%.
In the wake of SAFEMOON’s unprecedented decline, many crypto investors who held a position in the token incurred significant losses. This led to allegations that the crypto token was just another “pump and dump” scheme, promoted by social media influencers.
In fact, it was later revealed that this was actually the case. Last year, YouTuber Stephen Findseisen, a.k.a. Coffeezilla, said that popular online personality Ben Phillips was one of those who allegedly participated in the SAFEMOON pump and dump scheme.
According to Findseisen, Phillips urged his vast follower base on Twitter to “buy the dip,” while he was offloading his SAFEMOON holdings at an inflated price, making a profit of several millions of dollars.
Another celebrity who faced such accusations is Barstool Sports president Dave Portnoy, who revealed on Twitter that he was being sued for ‘schilling’ SAFEMOON.
What’s next for SafeMoon?
All things considered, it should be noted that in spite of controversies, neither SAFEMOON nor SFM have managed to achieve strong real-world use cases. This is an important factor to consider as it can significantly impact the asset’s future price action.
However, meme coins are always difficult to predict as such cryptocurrencies are highly sensitive to external influences like social media, as highlighted by price explosions seen in DOGE, SHIB, and, more recently, PEPE.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.