Mystery cryptocurrency surges in popularity
A new cryptocurrency called SafeMoon has gained popularity in recent days and as a result, surged in value.
It launched this month, but what exactly is SafeMoon? Here, we explain everything you need to know.
But first, a word of warning: buying cryptocurrencies and decentralised finance tokens as well as stocks and shares is a risky business.
Investing is not a guaranteed way to make money, so make sure you know the risks and can afford to lose the money.
Cryptocurrencies and decentralised finance tokens are also highly volatile, so your cash can go down as well as up in the blink of an eye.
Before investing you should do your research and make sure that companies are legit.
What is SafeMoon?
Not a huge amount is known about SafeMoon meaning the risk to your investment may be even higher.
Technically it's not a cryptocurrency - it's an DeFi token - according to it's website.
DeFi stands for decentralised finance token. They are very complex but essentially aim to disrupt the finance world to enable people to follow and lend in peer-to-peer networks, without needing a bank.
Like Bitcoin they use a complicated method called blockchain technology.
SafeMoon claims it will reward people who buy and hold onto the cryptocurrency.
For those who sell the currency on will be slapped with a penalty.
Its Facebook page states: "Remember, getting to the moon takes time and the longer you hold the more tokens you pick up."
SafeMoon charges sellers a fee worth 10 per cent of the amount of the cryptocurrency they are flogging to buyers.
It then claims to reward investors that hold onto their purchases by redistributing 5 per cent of the cash gained from the penalty charge among those who already have the currency.
These multi-level marketing tactics mean that is requires more buyers to keep buying to keep the price up, making it a very risky investment.
As always you should never invest any money that you aren't prepared to lose.
How is it performing?
SafeMoon recorded a 99 per cent rise on Sunday after Bitcoin had its biggest single day drop for months.
It comes after Dogecoin's price increased 91 per cent in 24 hours after Elon Musk tweeted about the cryptocurrency - and a 20,000 per cent increase from this time last year.
The cryptocurrency, which started as a joke, has risen 365 per cent in the past month to close to 20p per unit.
It comes despite the currency not being listed on any cryptocurrency exchange platforms
Dogecoin has risen from relative obscurity to become a cryptocurrency that is making punters serious money.
What are the risks of investing in cryptocurrency?
Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements.
Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.
Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market.
Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.
Marketing materials: Firms may overstate the returns of products or understate the risks involved.
This story was originally published on The Sun and is reproduced here with permission
Originally published as Mystery cryptocurrency surges in popularity