There are mixed views about BitConnect. When some believe that it is a Ponzi scheme, others find it a profitable trade. You cannot reach a conclusion without knowing what exactly it is and why it has received many negative reviews.
What is BitConnect?
BitConnect is a trading company. It has received much hype. Some investors believe that it can offer you the desired profits with the right investment. But the reality might be different. The company has a self-regulated financial system. It allows the users to invest and to get a percentage of the profit of their invested money. The company claims that the investors can get forty percent returns on the investments each month when they will invest in the BitConnect coin.
The guarantee returns claimed by company inspire many to invest in this company. They find it rewarding and the profitable. But when you will get into the detail, you might feel that it is the right example of the Ponzi scheme.
Is BitConnect A Ponzi Scheme?
Yes, it is a Ponzi scheme. You can trade with this company with an investment. Moreover, if you want to trade on this platform, then you need to pay with dollars or Bitcoin. The BitConnect coin does not have any value outside the trading industry. That means your investment will be worthless outside the industry.
When a company claims to offer around forty percent returns on the investments, it needs to have enough fund to meet the promises. But the problem with the BitConnect is that it is totally depended on the investment of the traders. When the traders stop investing in this company, the company will not have the capital to offers returns to the existing members. If it continues for a long, the company will not survive. If you have invested a huge amount in the company, you will be at risk. You will not get your money back. Besides, there is no one who will be responsible for your investments.
The BitConnect is a company that existence depends on the investment of the new traders. The company can survive until the traders find it a lucrative option for the investment. The company will use the money of the new members to pay the old members. But when there will not be any new member, the chances of the survival will be less. As the result, the whole system will collapse and the investors might lose the millions.
There is no doubt that BitConnect is an alternative cryptocurrency that allows the members to trade on this platform alone. When you invest in this software, you will directly enter into the Ponzi scheme where your money will be used to pay the old members. More importantly, the company does not offer any trading option. It does not sell any service or product. It will offer the affiliate membership.
For this membership, you will have to invest. You can earn by bringing new affiliates to the platform. Your earning will mostly depend on recruiting the affiliates. If you will be able to recruit more members, you can earn a huge.
In addition, the company lacks some important information. There is no one who will be accountable for your investment. If you visit the official website of this company, you will come to know that there is no information about the owner and developers. Without knowing the founders, you might not trust to invest a huge amount. If the company collapses for the above-mentioned reasons, you will not find anyone to claim your investment.
Conclusion – Ponzi?
From the above detail, it is clear that BitConnect is a Ponzi scheme. It is not a perfect trading software. A trading software comes with clear objective. It also offers the relevant information about the founders to win the trust of the people.
In BitConnect, the registration will be free and you will have to invest if you want to earn. Moreover, your profits will depend on the investment of your recruited members.
Besides, the company does not have a regulated body to monitor the activities. It lacks all the relevant information as well. All these factors create doubts among the new investors. Therefore, you should think twice before investing in this platform.
Another cryptocurrency scam has launched known as EthConnect – I will share my review soon