The Rise and Fall of Bitconnect
For years, crypto has been making headlines, but nothing quite like this. The controversial cryptocurrency platform Bitconnect was slammed as a Ponzi scheme after billions of investor dollars were lost and the company shut down in January 2018. Leading up to its demise was a shady history, fraudulent practices, and a trail of lies.
The appeal of Bitconnect for many was the generous and almost outrageous claim of a guaranteed 40% return on investment every month. Effectively this could turn a $1,000 investment into $50 million within only three years. But like they say, if it seems too good to be true, it probably is.
Bitconnect followed the basic pyramid scheme formula; where each paying participant recruits two new paying participants to provide returns to previous investors. While usually a pyramid scheme is relatively easy to detect, the glamour of Bitconnect was difficult for many to resist, even seasoned investors. However the red flags were there to begin with, with some media sources questioning the authenticity of the company’s operations. In reaction, Bitconnect started its own news segment to distract current users from the bad press.
The collapse of this giant was in tandem with similar market crashes for other cryptocurrency platforms as well, like Bitcoin and Ethereum. Public sentiment certainly isn’t helping either, with many people having lost their investments and one reddit user claiming to have lost upwards of $400,000 to Bitconnect.
With so much mystery, misinformation, and risk surrounding crypto, it’s a tricky industry to navigate. Take a look at this infographic for more on the rise and fall of Bitconnect and how you can protect your crypto investments.