I’m not mad at David Portnoy. It’s not possible to be mad at David Portnoy, the founding father of Barstool Sports, semi-professional pizza reviewer and maybe the world’s most well-known day dealer. Yesterday, Portnoy held a “press convention” the place he introduced he would champion a single altcoin, SafeMoon. It was a transfer completely emblematic of the instances: irresponsible, ironic and self-aware.
In the video, which has been considered 2 million instances on Twitter, Portnoy laid out six choices representing “the brand new breed of s***cash” to select one to diversify his crypto portfolio into. He says he put $40,000 into SafeMoon and can maintain the cryptocurrency for the long run. It’s a synthesis of two funding tendencies that developed over the previous 12 months: the outsized function influencers can play in markets and the embrace of meme property (cash and shares alike).
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SafeMoon is a cryptocurrency designed (because the identify implies) to pump – and possibly not a lot else, critics say. It disincentivizes promoting by charging a ten% charge on every sale, a portion of which is distributed to holders as a form of dividend. And by one metric – attention – it’s definitely taken off. But its mechanics, identify and the truth that 50% of the total supply is held by creators has set off warning bells.
We’re dwelling by means of one of many best market rallies in historical past. Propelled by stimulus checks, low cost cash and a wave of younger traders coming into the market, distortions have taken maintain. It’s a interval the place memes and character typically matter greater than due diligence, and the place initiatives that announce themselves as scams are greater than welcome.
“Why? I don’t know f***ing why, it could possibly be a Ponzi scheme,” Portnoy stated yesterday, explaining his funding resolution. “I just like the phrase ‘moon,’ as a result of that’s the place I would like to go.” He urged his 2.5 million Twitter followers not to take his phrases as funding recommendation and to do their very own analysis.
The video is critical not only for its blatant attraction to greed – one thing of a signature for Portnoy – however for a way clearly it defines this second the place single traders can have outsized impacts on markets. Portnoy calls out Elon Musk for “pulling levers” to have an effect on the value of bitcoin and dogecoin. But in the identical class are Roaring Kitty, the beginner inventory analyst who catalyzed the GameStop rally, and Ark Invest’s Cathie Wood.
It’s a task Portnoy has performed earlier than. During the peak of the coronavirus pandemic, he led a pack of largely millennials and Gen Z traders – the “Davey Day Trader” military – who would plow cash into momentum trades. It’s additionally not his first rodeo with crypto.
In a follow-up presser this morning, Portnoy clarified he favored SafeMoon as a result of it already had plenty of backers, it’s tough to purchase and it supplies the prospect to be early on one thing. It’s additionally humorous. (Cyndi Lauper’s 1983 hit “Girls Just Want to Have Fun” performed within the background.)
Indeed, SafeMoon has garnered plenty of advocates hoping the crypto will do what the identify implies – safely go to the moon. It’s shilled endlessly on Twitter. Fortune reported there could possibly be 2 million SafeMoon holders.
But there are additionally reputable issues that it’s a rip-off – or no less than helps scammy habits. SafeMoon CEO John Karony has warned publicly that “the core crew won’t ever ask in your pockets,” apparently in response to scammers.
Crypto analyst and investor Lark Davis in contrast SafeMoon to recognized Ponzi scheme BitConnect final month. “Remember, simply since you earn a living off of a [P]onzi doesn’t change the truth that it’s a [P]onzi,” he tweeted.
“Everybody is aware of it’s a joke, however no person cares as a result of so long as they get into the joke early sufficient and promote earlier than the height they’re comfortable. That’s the sport,” Bloomberg’s Joe Weisenthal wrote in his morning publication.
SafeMoon rallied some 25% after the announcement, however has since dropped barely.