Bit Connect - Fraud or Legit - Reality Check!

Hi everybody! MS aka cryptogem here. Today, I want to talk about Bit Connect. This is a lending service for cryptocurrencies such as Bitcoin. Here, specifically you can lend your Bitcoins and then receive massive returns every year This is extremely among some youtubers or even Steemit. People seem to be posting these ‘unheard of’ daily returns and getting these massive rewards. Now, before I begin I want to start off with saying that anything I post on cryptocurrencies is thoroughly researched and verified before being put out her. I am passionate about this asset class and it tends to show in my work. I conduct thorough research and not just your normal amount of research, that will satisfy a novice, but I tend to stretch my limits for research.

Bitconnect is one of the things, that I really don't understand. And after reading and comprehending about them, there are not many things, I don’t understand, . I am a Data Scientist, working on massive amounts of datasets to improve the efficiency of business processes. In short, I have a pretty good head on my shoulders. However, BitConnect seems to test my patience to the hilt. I fail to understand their business model. They guarantee extremely high returns on your lent money, returns that are absolutely unheard of and only wreak of disgusting Ponzi Schemes. You take from one investor and give to another. This can work extremely well in Bull markets….psst.. the one we are seeing in Bitcoin recently. And what a Bull market it is. Madoff ran a Ponzi scheme for more than 20 years. Only when there was the 2008 Financial crisis and all hell broke loose in Financial Markets, did his fraud come to light.

If Bitcoin suffers a correction, which ought to be sometime in the future, because no asset can indefinitely have an upward trajectory, not even Bitcoin. Having said that, any dip in Bitcoin will be temporary and a buying opportunity. I am extremely positive about the long term prospects of Bitcoin as a ‘store of value’, something which gold has been for a long time. However, this is the digital age and Bitcoin is ‘Digital Gold’. Gold has a market cap (if I can call it that) of 13 trillion dollars. Why can’t it compete with gold. At a market cap of 13 trillion, we are talking about Bitcoin at a eye popping 500,000 dollars!

Anyways, back to the topic of this huge Ponzi scheme called ‘BitConnect’. I am skeptical as to where the invested money is going and who's borrowing that money. There is no evidence of any so called ‘Trading Bots’, which they claim to employ. Even if they do, are these some magic bots, which create money out of thin air? They don't show any evidence of it and there's very little talk about where that money goes. You lend your precious Bitcoin and once you lend it out, you have to lock it up for a long time as well and all this starts to sound a little bit suspicious. The disturbing part for poor investors is that you can't prove something as being a pyramid scheme until it falls apart or until it disappears.

You are therefore putting yourself to a lot of unknown risk. From what I've seen and read, I don't see enough to justify that as a running business – as something that can continuously grow over time. There's a huge amount of risk in locking up your Bitcoins and getting Bitconnect for a long period of time. That's extremely risky and in my opinion, plain stupid. Why get greedy for more returns, when you have Bitcoin, which is the single best performing asset on the planet ever since its inception in 2008-09. It has given median returns of approx. 20% every month.. Yes every month! That is absolutely insane!

Maybe, if you're invested early in Bit Connect, you do make money but there's a risk when you know the last one standing is going to pay a heavy price. So, unfortunately, there is no conclusive way to prove that this is a pyramid scheme, but as they say, if it looks and smells like it, it probably is! I don't understand it enough to invest into myself. I've been investing into cryptocurrencies for some time now. I always look for long term investments that are relatively safer. Safe is a word that is seldom used with cryptocurrencies, but some cryptocurrencies are tested and proven legit.

Those are my humble two cents on BitConnect. One advice that is like gold to current Bit Connect investors reading this: Please make sure that you exit before Bitcoin takes a massive dip. It can happen now, it can happen in some time. But when it happens, you will see the unraveling of one of the largest Ponzi Schemes in cryptocurrency history! A 600 Million Dollars Ponzi scheme, nonetheless.