SafeMoon is one of a handful of cryptocurrencies that has been driven by social media hype, memes, and celebrities. Following in the footsteps of Dogecoin (and Tesla CEO Elon Musk's support of the meme coin), SafeMoon rose on social media influence only to later fall flat.
Unfortunately, that fall couldn't have been predicted by Barstool Sports founder Dave Portnoy, who invested $40,000 into it.
Nearly a year after announcing his investment in SafeMoon, Dave Portnoy has called it his "worst purchase"
In a three-minute Twitter video, Portnoy sat before a row of six hats, each donning the logo of six top meme cryptocurrencies. The Barstool Sports founder disclosed that he had already invested $40,000 into the yet-to-be-revealed cryptocurrency and was going to “either the stratosphere or hell on Earth.”
In the end, Portnoy put on the SafeMoon hat. “Why? I don’t know f***ing why. It could be a Ponzi scheme,” he says in the video. And it's this Ponzi-like structure that may have prompted Portnoy to buy in: “if any f***ers sell it out there, you get a 10 percent penalty and disperses 5 percent.”
Whereas Portnoy clearly had his reservations about investing in SafeMoon, they didn't stop him. But they should have. SafeMoon has not only crashed but could vey well be a "pump-and-dump scheme," reports Vice.
During a recent appearance on Varney & Co. from the Bitcoin 2022 conference in Miami, Portnoy admitted "I bought $40,000 of [SafeMoon] and I now have $2,000 left, so I got smoked with that one." He added, "And I did say it was a piece of junk, potentially, before I bought it, and it turned out to be junk."
Although Portnoy now views his SafeMoon investment as his "worst purchase," he holds faith that the cryptocurrency market "is too big to fail." According to FOX News, Portnoy has invested roughly $1 million in Bitcoin.
Portnoy is one of many personalities that may impact markets
A glaring trend in investing over the past several months is individuals or groups manipulating markets, stocks, and cryptocurrencies. The most notable case of a stock being transformed by social media influence was that of GameStop, which rose over 2,400 percent seemingly overnight. After subreddit WallStreetBets noted that the stock was extremely shorted, retail investors rallied to pull off one of the biggest short squeezes in recent memory.
In the crypto world, Musk has been creating waves with his tweets. Dogecoin has benefited from Musk’s free press. Since Musk has featured Dogecoin on his Twitter feed, the digital coin rose from a simple joke currency to the fifth-largest cryptocurrency by market cap. As of April 18, 2022, it ranked as the 11th-largest.
While Portnoy's investment may have helped raise the value of SafeMoon, his recent commentary may only fuel the fire surrounding the cryptocurrency. As a result, it could see even more volatility.