Something is Not Right About BitConnect
Buterin called out BitConnect's scheme, followed by a massive dip in the coin’s market cap.
Since September 2017, BitConnect had tripled its market cap and became the 8th largest crypto, according to the CoinMarketCap. But recently the coin is facing a massive controversy because of its too good to be true scheme.
The firm is offering an insane scheme to the public. With its four-tier investment system, the returns get more lucrative based on your initial investment. But it is promising that, irrespective of the initial investment, everyone will earn up to 40 percent total return per month. This translates to 1 percent RoI per day.
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A few days ago, Ponzi Crypto Coins, an account dedicated to uncovering suspicious crypto deals luring newcomers, asked Vitalik Buterin and Charlie Lee about the scheme on Twitter.
I actually have no idea what bitconnect is.
— Vitalik Buterin (@VitalikButerin) November 2, 2017
Even though Buterin shot a quick reply denying any knowledge of BitConnect, he was quick to point out that if it is offering a 1 percent return a day, chances are it is a Ponzi.
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Yeah, if 1%/day is what they offer then that's a ponzi.
— Vitalik Buterin (@VitalikButerin) November 2, 2017
The Reddit community quickly followed the conversation, and there was an uproar about the schemes of BitConnect – after all, it is one of the leading coins in the market. The community cited the resemblance of BitConnect to Bitpetite and Onecoin, the former a very similar Bitcoin lending investment alternative which is being accused of running a scam.
When we analyse the scheme, we can see its dubious motives. Yes, the coin promises lucrative rewards for lending cryptocurrencies, but the payout is only in BitConnect coins. Also, the catch is that you do not get the value of coins as seen on paper, only the value of your initial cash investment. So with the current soaring prices, one would receive a much smaller amount, and with the bull Bitcoin, BitConnect could also make a fortune.
For instance, if someone invested 1 BTC when the value was $3000, on paper he might have rewards, but if he decides to withdraw his funds, he will only receive his initial investments that too in BitConnect coins. Meanwhile, BitConnect would have kept the Bitcoin whose current market value is over $7000.
Due to a technical recalculation of tokens in circulation, BitConnect recently dropped from 8th position to 15th on CoinMarketCap. The update certainly no longer considers the current tokens under loan as a part of its market valuation. This also took the market cap of the coin from over $2 billion to mere $582 million.
With the boom in the crypto space, BitConnect is not the only such scheme – it is an old one that continues working, making it even more dangerous.
first of all, bitconnect is trading on different exchanges not just internal ones, the biggest it is trading on is hitbtc, second you exchange your bitcoin not with bitconnect but with people exiting the platform trading bitconnect coins for bitcoin, you are lending bitconnect coins to bitconnect which uses their trading bot to trade on the volatility of the btc market and in turn give you a a daily percentage, now that being said another false fact you stated was that everyone received at least 40% total return per month, but if you read the picture you posted below that… Read more »
Great response Martin! My Question to the author of this rip, Who made the determination to drop the market cap? In the article, it says “Due to a technical recalculation of tokens in circulation” . Who is the “authority” to make any determination on market cap, other than the coin its self? Its true the tokens are not in circulation, but that doesn’t take away the fact that there is still over 2 billion tokens purchased! These so call sperts, want so bad for this coin to fail so they can be the one to say I told you so.… Read more »
Just because you dont understand it doesnt make it a scheme… neither does wanting to be right
I really dont understand some people and finance news website, Bitconnect is not offering anybody 40% warranty! If you read they are website they offer you max 0.25 % warranty.
If your math is not enough to understand Bitconnect system than just keep your mouth shut and learn math!
Bitconnect is not scams , Bitconnect is going to be here as long crypto currency is live.
yall look way to far into this stuff. the site works ive deposited money into my own account from it i dont care what they do or how they do it im getting paid thats all that matters
This is definitely not ponzi or a scam. People who don’t understand the mechanics and math are quick so quick to chalk this up and not legitimate. The proof is in the pudding. I’ve been getting paid daily interest, cashing out and turning my profits to cold hard us dollars for about 8 months. If you want to join, check out https://bitconnect.co/?ref=matlax17
There has never been, nor will there ever be a perfect money maker, whether it’s called a scheme or an investiment or a job…JOB = Just Over Broke. Ride the wave, hope it gets bigger and try not to sink.