The market is trying to tell us something. It’s a warning.
On August 25, there was huge selloff of BCC from recent highs. There is a bit of speculation about the reason why but none of seems to be particularly convincing. Even if you put all the speculation aside and just look at BitConnect chart from a Technical Analysis perspective this selloff looks like the first shock…and it is not likely to be the last. Have a quick look the chart from coinmarketcap.com :-
The thing about Technical Analysis and market shocks like these is they actually create more fear and doubt for holders, making it even more likely to sustain further shocks – it is self-reinforcing. The speed and severity of the shock alone gives an indicator of just how quickly and severe BitConnect could go down if there is a fresh wave of panic selling.
Now when you put the Technical Analysis into context of the Fundamental Analysis of this coin….well holders have bloody good reason to be concerned. This coin promises a guaranteed profit and supposedly is adding value via a trading bot. Any investment that promises a guaranteed profit should be raising a red flag because there is no such thing as a guaranteed profit.
I won’t go into it in detail as plenty of others have, but it is my sincere belief that BitConnect is the largest ponzi scheme currently in the crypto space with a market cap (at time of writing) at more than $777 million USD. This post is not about spreading FUD, it’s about trying to serve the public interest and warn people!
Now a lot of people like to throw the Ponzi claim around about a lot of cryptos (if not all of them) but it is a particular type of scam, defined by dictionary.com as :-
“a fraudulent investment operation that pays quick returns to initial contributors using money from subsequent contributors rather than profit”
To me BitConnect fits that description down to the ground, but that's just my opinion.
The thing about Ponzi schemes is that when confidence in them falters, they collapse like a house of cards. In BitConnects case it would look like a crypto coin that has dropped to $0.
Let’s have a quick look at the price chart on the bitconnect.co website for the last week :-
I should point out that this “internal” exchange accounts for about 85-90% of the traded volume for BCC. It’s interesting isn’t it. It’s a bit like the price shock didn’t happen, possibly because the site was down. Considering this exchange has nearly all of the volume for the coin this might be what it looks like in the end – a site that goes down and just never comes back.
Now go back and have another look at that first chart….
If you’re still holding this coin then count your blessings that it has had a bounce and you are getting another chance to bail at a decent price. Markets will often give you a second chance but don’t count on getting a third.
DISCLAIMER - Information provided in this post is general in nature and does not constitute financial advice.
They still have issues with the site. Even if it's legit, it will be difficult to come back from this. Although people's greed
Maybe they are real issues, but it's an easy excuse to make having "web site issues" or "we've been hacked". How many times have we seen these cover stories before?
Sometimes peoples greed is only exceeded by peoples stupidity.
I read an article on why its not a scam and I can see how it can work. Its all to do with the hoops they make you jump through, buying BCC, the fact that they control the supply from the pre mine and the fact that btc keeps going up (at present).
For example, I made a loan which has already returned 50% of the dollar value, but when you convert to btc I am nowhere near 50% and if I had of just held the btc, I would have been more than 50% up already.
Possibly not a scam but not the amazing investment it was billed as either.
Can you send me the link to the article?
I think if the scheme is dependent on BTC going up....then what happens when BTC goes down? If it is effectively leveraged on the BTC price then are losses magnified?
I'll find the link. Basically, they make fees on transfers plus staking their own coin at 8% per month (due to massive premine) plus increase in value of BCC which they control (supply controlled due to premise) plus possible increase in btc price.
Hi mate, Here is the link:
https://bitconnectexplained.wordpress.com/2017/07/26/bitconnect-explained/
This explains what he thinks is going on and I am starting to believe this. There is also a youtube video that is similar. Ill try and find that.
Recent events do support this.
If investors invest in btc and the bot trades in btc, why do they need the BCC complication in the middle? It makes no sense unless its to control the whole scheme.
Additionally, if the bot truly does trade on btc volatility, why have the last 3 days (since the alleged hack) been so low. These returns should be independent of any hack.
I personally invested 40 days ago (give or take) and if I was fully repaid what I invested (in dollars), plus all interest etc I would be $200 down due to btc increases. I would have been better off just holding btc.
You could argue it is a hedge against btc dropping in value, but that's only true if they continue to pay!
It's creative accounting smoke and mirrors. A clever piece of writing that, sounding like he's a skeptic but after figuring it all out he's a convert! With a referral code no less....
Here's an example of the logic :-
But...what if the BCC price goes down? They have to pay you more coins to make the promised ROI right? What if it goes down so much the mined coins won't cover it? Yeh....he doesn't cover that does he?
At the end of the day, any product needs a value proposition to create wealth. All the fancy accounting tricks like mining coins (which inflate the money supply and dilute holders) don't add wealth to the system. The wealth has to come from somewhere and it's either got to be the trading bot, experienced traders (who can generate 1% profit a day - not easy without taking risks)....or it comes from the wealth of new investors buying in, which makes it a ponzi.
Sorry, the more I look into it the more convinced I am it's the latter. Good luck to you if you're still invested.
I completely agree with most of your points but having reread this I feel that it could be onto something. It may not be a traditional ponzi but something more complex, using the POS to control supply and demand and hence prices. Iam not saying this makes it a good thing or even legit, just that it may be different.
I still think it will unravel but I have no idea when. Time will tell I suppose.
I have been a detractor of BitConnect ever since I first looked at it, looked at who was involved, and studied the methods they use to sell, hype, and pump their site.
My first hard look at it set off some major Red Flags in my mind. Because of that, I have never invested, and I have also posted warnings to people involved in this - or curious about BitConnect.
My gut tells me the people who run the site will try to, "take the money and run," at some point. It hasn't happened yet, and it may never happen, and I don't WANT or HOPE for it to happen - but I won't feel sorry for anyone who does lose their bankroll, if it does happen.
The main thing that angers me about this situation is that IF BitConnect does eventually prove itself to be a scam - it will give all cryptos a "black eye," by association. That won't be a good thing for the overall success of cryptos. People may be using the lure of the blockchain - as a scam. That is a misuse of blockchain technology, and it diminishes a good thing.
I could not agree with you more.
I think the fact that most of the trade occurs on their own exchange gives them enormous ability to manipulate the price and keep it afloat longer. The price has bounced back this time but apparently bitcoin withdrawals are still disabled....
That's not even close to being "rocket science," it's just common sense: if you can't get your money back out of it, they can say it's gone up 5000% - but it doesn't matter, because you're not going to be getting any of your BitCoins back out of it. Sounds more than screwy, to me.
I'm 100% with you on this, can't get your money out then this is a very bad sign. It is a ponzi and will pop one day, let's just hope it doesn't hurt the crypto community. Although that being said we've been through pretty much everything with the likes of MTGox and SilkRoad. Let's just hope people can take note of this article and get their funds out asap.
I like your post! I sent you some money in your wallet!
Thanks, I appreciate the gesture :)
They were possibly "hacked" but the so called hackers took advantage of an exploit in the site whereby they could get double their BTC and they bought up BCC tokens which initially drove up the price to $150+
The perpetrators then transferred those stolen funds to other websites and DUMPED on the market causing that drastic drop. The lack of buy orders past a certain point is why the price flash crashed.
The website came back online and explained some of what happened and even payed out 4 missed days. If it was an inside job they are pretty smart and they picked up a bunch of cheap BCC tokens after the crash. It is looking like certain users actually exploited the system.
BCC has a bright future if they can prove they are not in fact a Ponzi or pyramid scheme. I think there is a lot more money to be made off of them in the short term.
Website issues PLUS hacked. That's like a double excuse whammy ;)
I'm just curious to understand why you think BCC has a bright future. What is the value proposition of BCC to you? Is it the trading bot or something else?
The way the system works is that their token ALWAYS rises in value over time since you have to buy it when you "invest" and when you cash back out. The influx of new users constantly pushes the price up along with people reinvesting their earnings into their token. If you had simply bought BCC tokens last month and held them you would have made more than 100% return on investment by now, rather than the 30-40% they would have paid you in fiat if you had lent the trading bot those same tokens.
I have heard that they hold 50% of the tokens lent to them (for speculation) and the other half of the money they use to trade BTC and their own token. I honestly don't think they are using any trading bots just some experienced traders with a very large bankroll to play with. Even if they have a bad day trading they use the profits from their BCC markets to pay investors and they do a very small payout around 0.1% or less.
As long as people keep investing and new people are signing up their token will continue to rise sharply. The strength of Bitcoin has also bolstered their price since BCC is traded only for BTC.
"As long as people keep investing and new people are signing up their token will continue to rise sharply."
^That is exactly how ponzi schemes work. The question is what happens when people stop investing and want to take their money out because they are scared (due to say....a website failure/hack or something like just occurred?)
I also don't believe they are using a bot and it is probably just experienced traders, but they are claiming they are "profiting from Bitconnect trading bot and volatility software" on their website. It is a highly dubious claim at best.
I believe you are stuck for up to 299 days (depending on loan amount) so you cannot "Just get out".
If you're holding BCC you can sell. If you're tied up in an "investment option" then good luck to you because I think you'll need it.
There is an interview out there of one of the guys who helps run Bitconnect. He is a little sketch and doesn't want to talk about much.
Hacked?
I for one do not believe it was a glitch in the system. I think someone knew how to exit. . . . and is already out of the door.
IMHO of course.
And the website is not back online. To claim so before testing and knowing that BTC cannot be with drawn is misleading.
Please be careful if you were on the fence and now jump to invest BTC and make a loan.
Wait until certainty.
H. G.
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