Cryptocurrency SafeMoon doesn’t have the name recognition that Bitcoin, Dogecoin, or Ethereum do, but it burst onto the market in March with a unique pitch: it would avoid the price fluctuations that those three cryptocurrencies are known for.
Wednesday’s crypto crash following China’s crackdown on digital currencies, however, is raising questions about that claim.
SafeMoon, which is currently priced at a fraction of a cent, saw a sharp rise in prices in mid-April and most of May. But as of 12 p.m. ET Wednesday, its price has fallen to about the same place it was on April 19, when the run-up was getting going. It’s currently 56% off of its highs of April 20, according to CoinMarketCap.
That might not seem especially worrisome, since a single dollar bill will buy you over 177,000 SafeMoon tokens as of today. But with a market cap of more than $3.4 billion already, it adds up to serious money.
SafeMoon was designed to avoid these sorts of hurdles. The coin charges a 10% fee on each sale, in hopes of discouraging day traders. Half of those funds are distributed to existing SafeMoon owners in a dividend of sorts. The creators also have more control over the coin’s supply, which (arguably) would increase the price.
Critics, though, have taken aim at SafeMoon, saying the team that owns it owns the majority of the liquidity and have likened it to a Ponzi scheme. SafeMoon has shrugged off those criticisms, saying it plans to complete a SafeMoon wallet and explore trading of the currency on exchanges, as well as building one of its own.
As of noon ET Wednesday, SafeMoon was down nearly 31% over the past 24 hours and is valued at $0.000005619.