The number of people searching for the term “Bitconnect” on Google today suddenly skyrocketed, what is the reason?
Bitconnect is a technology application financial model provided by a company called Bitconnect LTD established in 2016 in the United Kingdom.
It works almost like a financial trust fund, i.e. you invest money in the fund to let someone else do business and after a certain period of time (commitment between two parties) you will take interest or withdraw all the capital. his about.
However, Bitconnect offers a very high interest rate (over 30% per month), much higher than the interest rate of conventional financial trusts (10-15% per month) as well as deposit interest rates. bank savings (5-8%/year). This leads many to believe that Bitconnect is a shady model.
Does Bitconnect sound more like a gamble than an investment?
Bitconnect is also the name of a cryptocurrency (symbol: BCC). It was created at a time when the famous Bitcoin cryptocurrency grew rapidly, forming a craze called cryptocurrency – cryptocurrencies in general.
This has attracted many people to invest in Bitconnect. They buy Bitconnect cryptocurrency and send that money to the main issuer, Bitconnect LTD, both to keep it and make a profit.
However, the difference here is that every cryptocurrency was born with a clear purpose, to solve life’s problems, while Bitconnect was born just to make unreasonable profits for investors. private. In addition, when referring a new person to invest in Bitconnect, the referrer will receive a commission. This once again proves that Bitconnect is a shady model and the cryptocurrency of the same name is also a worthless coin.
Bitconnect was the most searched keyword on Google yesterday.
Bitconnect creates no real value. That’s why it can’t generate profits on its own so the platforms pay investors every month. So where does this money come from?
The first is from the value of Bitcoin. When participating in Bitconnect, investors will have to transfer Bitcoin and buy Bitconnect coins. The bookie will keep the investor’s Bitcoin and the value of Bitcoin increases very quickly in 2017. In fact, the amount of interest that investors receive is only a part of the growing Bitcoin value.
Next comes from the investors who come later. The house will take the investor’s money later to pay interest to the investor first. Like that, this model is maintained when more members join continuously. That is also the reason when referring a new person to invest in Bitconnect, the referrer will receive a commission. This multi-level factor will help attract more new investors to join, forming a pyramid pattern.
So what happens when Bitcoin’s value doesn’t grow exponentially and Bitconnect doesn’t attract more members?
Early this morning of January 17, Bitconnect LTD suddenly announced to investors that the company officially stopped accepting new investments and temporarily closed the internal exchange, causing old investors to cannot withdraw money.
This information immediately shocked the world and everyone thought that Bitconnect LTD had embraced investors’ money to escape. The value of the Bitconnect algorithmic currency also plummeted without braking, falling from 400 USD to only 30 USD per coin.
By the afternoon of the same day, websites that aggregate information about the cryptocurrency market, the most prominent of which is Coinmarketcap.com, have removed this digital currency from the list.
Many people have seriously questioned that Bitconnect is a scam model!
Bitconnect’s announcement yesterday.
Although there are no specific statistics, in Vietnam the number of participants investing in similar Bitconnect models is very large. The proof is that the Facebook groups discussing Bitconnect have tens of thousands of members. Therefore, when this model collapsed, many Vietnamese people suffered serious consequences.
Bitconnect’s demise is a warning to similar models. It is a variation of the multi-level business model in today’s technology era , the time of Bitcoin and hard-to-control cryptocurrencies.
Multi-level image on Bitconnect’s website.
After the Bitconnect incident, after reading this article, hopefully you will understand the essence of this model and draw your own lessons.