Why is crypto SafeMoon trending, and why is Dave Portnoy using it to diversify his bitcoin exposure?

The events of that last couple days and weeks have made me think: "I have to get involved in something beyond bitcoin," Portnoy said

Amid the slump sweeping across most crypto assets Tuesday, investors were turning their attention to a meme asset, SafeMoon, that was drawing fresh looks after comments made by Barstool Sports’s brash founder Dave Portnoy on Twitter.

Portnoy on Tuesday cheekily announced that he was buying $40,000 in SafeMoon, out of an array of so-called meme assets like Shiba Inu and other assets that have benefited from the fervor around the parabolic surge in dogecoin prices DOGEUSD, -12.65% so far this year.

SafeMoon was created in March and is encoded to benefit hodlers, or those who invest in a coin through bad times and good.

Portnoy via Twitter described SafeCoin as his “sh-tcoin accouncement” and warned followers to “invest at their own risk,” adding that he has “no idea how this works.”

“The events of the last couple days and weeks have made me think: I have to get involved in something beyond bitcoin. I see what Elon does. He’s pulling levers, so one day doge is good next it’s bad: bitcoin good, bitcoin bad.

Tweets from Tesla Inc. TSLA, +0.18% CEO Elon Musk, including one that prompted speculation about whether the electric-vehicle maker would sell its $1.5 billion stake in bitcoin BTCUSD, -8.32%, have been blamed for pummeling bitcoin prices and sinking the crypto complex more broadly.

“It’s time for me to choose a side and I have done that,” Portnoy said, selecting SafeMoon among “a new breed of sh-tcoin.”

“SafeMoon is now in the Dave Portnoy business and vice versa,” Portnoy said. “Why? I don’t know. it could be a Ponzi scheme,” he said. “If it is a Ponzi, get in on the ground floor,” he quipped.

To be sure, the crypto, launched in March, is neither inherently safe nor is it guaranteed to figuratively or otherwise take investors to the moon.

However, SafeMoon is designed to reward long-term ownership. Sellers of the meme coin are charged a 10% fee, which is at least partly redistributed back to existing holders.

The Wall Street Journal earlier this month described SafeMoon as one of a batch of relatively new crypto that were surging on the back of euphoria pegged to dogecoin.

On Tuesday, SafeMoon was the second-most visited coin on research and data company CoinMarketCap.com’s website behind Shiba Inu.

COINMARKETCAP.COM

SafeMoon is up 42,200% since its launch in early March and was changing hands at 0.000008186 cent. CoinMarketCap data showed that it closed on March 12 at 0.00000002 cent.

Some fear that the surge in interest in doge and other joke coins reflect the euphoria that has become representative of the mania surrounding much of the crypto industry.

Stock markets have seen more mundane returns compared against speculative assets like SafeMoon or doge. Gold futures GC00, 0.29% were down 1.4% so far this year. The Dow Jones Industrial Average DJIA, -0.78% was up nearly 12%, the S&P 500 index SPX, -0.85% was up nearly 11% and the Nasdaq Composite Index COMP, -0.56% was up more than 4% in the year to date.

Portnoy, who sometimes refers to himself as Davey Day Trader, has become a rallying point for members of the retail investing community who have felt left out in previous market rebounds.

The Barstool founder’s comments, however, suggest that he is at least partly in on the joke when it comes to meme coins. He referred to himself as the Baron of bitcoin and said he didn’t plan on selling the world’s No. 1 asset, despite Musk’s recent tweets.

“I will never sell my bitcoin, I will never waver in bitcoin. I don’t care what Elon Musk says, I am sticking with bitcoin,” Portnoy said.

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Source: marketwatch.com