A bitcoin-encouraged subsection of cryptocurrencies identified as memecoins have exploded this yr with the tongue-in-cheek dogecoin top the pack.
Dogecoin, a cryptocurrency centered on the Shiba Inu doge meme that’s just lately rocketed into the crypto major five by benefit has soared thanks to guidance from Tesla
Now, Dave Portnoy, the founder of the Barstool Sports activities web site who built a identify for himself reside-streaming his stock market place and bitcoin escapades previous year, explained he’s investing in safemoon, a new cryptocurrency that’s been branded a Ponzi scheme by critics.
“The occasions of the very last pair of days and months have manufactured me consider I have to get included in one thing other than bitcoin,” Portnoy, who described himself “as the baron of bitcoin,” explained to his 2.5 million Twitter followers, adding he will proceed to keep bitcoin and would not “care what Elon Musk says.”
In excess of the final 7 days, Musk has rocked the bitcoin and cryptocurrency industry by 1st pulling the plug on Tesla bitcoin payments, citing environmental problems proposing dogecoin upgrades to make it “the forex of Earth” then appearing to suggest Tesla had sold the bitcoin it bought earlier this year. Musk later clarified Tesla has not marketed any much more bitcoin since it offloaded some to take a look at market place liquidity but the broader crypto market place stays all around $500 billion off its all-time substantial of $2.5 trillion.
“I see what Elon does, he is pulling levers so just one day doge is great, future it truly is poor, bitcoin superior, bitcoin bad,” Portnoy stated in a Twitter movie that’s been viewed additional than 2 million occasions considering the fact that it was posted final night time and captioned: “Devote at your personal danger. I have no strategy how this operates.”
“It really is time for me to opt for a aspect, and I’ve performed that,” Portnoy said, including he would like to come to be safemoon’s “chief” and has previously acquired $40,000 worth of safemoon tokens.
“It could be a Ponzi scheme,” Portnoy explained. “Everyone’s Ponzi, Ponzi, Ponzi—it’s early, if it is a Ponzi, get in on the ground ground. I like the term ‘moon’ since that is the place I want to go,” referring to the crypto neighborhood meme of tokens “likely to the moon” when their price spikes.
The safemoon value has struggled along with the broader bitcoin and cryptocurrency market place over the very last 7 days but it has so much mainly held on to the eye-popping gains it really is racked up around the very last several months, aided by social media influencers such as YouTuber Ben Phillips that have supplied safemoon their backing.
Safemoon, made by the corporation Safemoon and its main executive John Karony, has been branded a Ponzi scheme—an financial investment that generates returns for early investors with cash place in by later on investors—due to its obvious deficiency of utility, really centralized liquidity, and fees for marketing. Safemoon prices a 10% payment to any person who sells their tokens, with 5% of that redistributed to all other safemoon token holders.
“Keep in mind just for the reason that you make income off of a Ponzi does not change the simple fact that it is a Ponzi,” bitcoin and cryptocurrency investor Lark Davis stated via Twitter in April, introducing “#safemoon.”
Davis went on to evaluate safemoon to bitcoin financial commitment lending system BitConnect and its associated cryptocurrency, recognised as a person of the most important ripoffs in cryptocurrency historical past, that abruptly shut down in 2018 just after U.S. regulators warned traders of its similarities to a Ponzi plan.
Some others in the cryptocurrency neighborhood have warned new investors to be wary of memecoins these as safemoon and dogecoin, comparing them to meme shares like GameStop.
“Safemoon is group-pushed by people today making an attempt to get loaded swift and historical past exhibits these never ever work out,” Adam Morris, co-founder of bitcoin and cryptocurrency education web site Crypto Head, said in emailed remarks, adding safemoon “has a large amount of similarities with dogecoin, but it really is even more risky because it doesn’t have the heritage that dogecoin does.”
“Safemoon by itself as a task does not supply considerably and the coin is intended to be as hard to sell as attainable. At this place it would seem that safemoon, dogecoin and other altcoins that have appeared out of nowhere are most likely a period very similar to GameStop. We could not see a big correction however until the upcoming major market place correction.”