Colossal Ponzi Scheme BitConnect Has Officially Crashed And Burned
BitConnect, the legendary Ponzi scheme website that had taken the crypto world by storm and potentially gobbled up millions of dollars worth of bitcoin has finally collapsed under its own weight.
Over the last year, the site has used affiliate style marketing, flashy and sometimes nonsensical promotional videos, and promises of riches with no risk to spread like a disease across the Internet.
If you’re not familiar with how BitConnect worked or at least claimed to work, you can read up more on it in our Bitconnect Review.
The End of An Era
While 2017 saw many dozens of Ponzi schemes is come and go, BitConnect was undoubtedly the biggest. A little less than a day ago, the BitConnect website posted a statement declaring that their “lending service“ will be terminated immediately, and their exchange service will end in five days.
Following this announcement, the value of BitConnect cryptocurrency called BitConnect Coin or BCC dropped like a rock. As of press time, the cryptocurrency has lost more than 92% of its value before the announcement and is now training at around $15 each. At its peak, a single BitConnect Coin was worth more than $400.
According to the statement left on the company’s page, the reason for terminating its so-called lending program is due to multiple reasons. Those reasons include the recent season desist orders, and an Ongoing and concerted denial of service attack, and what they call “bad press“.
The Public Responds
So how is the cryptocurrency community at large handling this news? Those who always knew or suspected that the screen would eventually collapse our magnanimous, to say the least.
But how do those that were involved in the scheme feel? What is going in the minds of those who are now left out in the cold? Under the condition of anonymity, we spoke with a BitConnect investor to get their thoughts on these new developments.
Interview with an Investor
When asked if he ever truly believed in Bitconnect, he told us:
To be honest, I thought the prospect of potentially earning so much money from this thing was too good to be true, and it was. They claimed to have a trading bot undertaking micro trades and winning more than it lost and hence your [high] returns, but I never saw any evidence of this.
We then wanted to know how his investment did. He said:
I got into it expecting to lose and I did. But only just - I'm about 3/4 of the way to recouping what I had put in. I don't think I'll be seeing anything further from Bitconnect except perhaps a pay out of their own pretty worthless BCC. If it had lasted another week I would have broken even and another two weeks I'd have been in profit.
Now that the site is done for, we asked the anonymous source how he felt this would impact cryptocurrency investors at large. To this, he responded:
It's good for the crypto community that this has happened but we as a community must police ourselves and not let this happen again, or before we know it there will be all manner of regulations dumped upon us to protect us.
What does this mean for crypto?
Now that the largest Ponzi scheme has crashed, this will likely have several impacts on the crypto community at large. While it is coincidental that the day BitConnect announces its impending closure, that the entire market would experience drops around 25%, it appears to not be directly related to BitConnect.
However, if BitConnect fails to pay out the amounts they claim it will pay out, then we could see millions or tens of millions of dollars worth of cryptocurrency disappear from the market. Not only will assets disappear, but sentiment towards cryptocurrency could drop drastically.
If some new investors got burned, they may avoid cryptocurrency from now on. It's also possible that major media outlets could pick this story up and spread it in an "I told you so" tone.
Overall though, as our anonymous source said, the removal of bad actors from cryptocurrency can only be good in the long term. Just like resetting a displaced joint, it may hurt now, but it’s better for the long run.
Featured Image via Fotolia
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.