Bitcoin Enthusiasm Doubles BitConnect Price in a Month, But Doubts Still Remain
BitConnect is a project promising a return on a Bitcoin investment. And in the last month, the market price has defied gravity, reaching $200. But the project still attracts criticisms due to its convoluted payment scheme and a referral program that is in fact a pyramid scheme.
If you invested $100 in Bitcoin at the beginning of the year, you would have around $500 now, a decent, but not phenomenal gain, despite the strong and unprecedented rise in market prices. But if you invested $100 in BitConnect in January, you would have more than $115,000 today, given that the project started the year with a price of $0.17.
And in September, despite all odds, this altcoin boomed, trading around $199 even today. The large price drop this summer now looks like a blip on the radar, taken over by the rising trend.
The problem is, most of the volume comes from the BitConnect exchange, and most of the buying interest in the coin is related to the earnings program proposed by BitConnect.
The problem is, if you buy BitConnect and loan them, you cannot withdraw the coin itself and sell it for profit- you are only entitled to the dollar amount of your initial investment. This means that some holders of BitConnect may have their wealth only on paper.
BitConnect promises returns that are even higher than the growth of its coin- 20-50% per month. And for now, the scheme still works, as it attracts new buyers. The question is whether the spreading reputation of cryptocurrencies will go fast enough to accommodate the referral program, because the scheme relies on an influx of funds in order to deliver the results as promised.
For now, BitConnect works, and users have learned not to overinvest. But this is one of the cryptocurrencies to be watched closely, as it may fall from its heights and serve as an example of a risky scheme.