Dearly beloved, we are gathered here today to celebrate the long overdue passing of BitConnect.
We heard the rumors, the ever-growing whispers that BitConnect was a Ponzi scheme, and all the hype has now come to an end. As of the 16th of January, 2018, the lending and exchange platform BitConnect is no more and has been put to rest. All transactions and activities have since been closed, although they stated they will continue to develop and operate BitConnectX as an exchange.
BitConnect has stated that they will refund pending loan transactions at a rate of $363.62, but just check out the chart below to see the current state as of the 17th of January, 2018. Not sure if it can rally back to the heady heights but we’ll see what initiatives will be put in place on the newer BitConnectX platform.
Why did BitConnect shutdown?
Three primary reasons were given in their press release:
- Negative press, which made clients feel vulnerable.
- Receiving a number of Cease and Desist Letters from the Texas State Security Board and North Carolina State Securities Division which became a “hindrance” to BitConnect’s business.
- Outside forces, citing DDoS attacks (Distributed Denial of Service) against their platform.
Now, like any Ponzi scheme if you’re at the top of the pyramid you’re usually in a safer position especially if you get out early enough but the late comers always lose out. The BitCoin phenomenon has become a minefield of armchair experts and YouTube crypto geniuses and if these are the only places that you obtain your “thorough research” from then you missed the key element of what investing or as my mother would call it ‘legal gambling’ is all about.
You might have noticed that since going back onto YouTube all those wonderful BitConnect advisors have since slowed down on promoting their over-exuberant BitConnect product Vlogs. Did they know in advance that there were issues? Of course, but they now seem to be promoting a “nothing to see here” outlook, just invest in other types of cryptocurrency.
But how many has it affected? Many a BitConnect investor placed large sums of money that they could not afford to lose, some borrowed and are now in debt. With schemes like this someone always gets hurt.
What can we learn from this?
Just like any other financial product the strong ones will stand and the weaker ones will fade away. Assessments, re-organisation and transitions may have to take place and BitConnect may very well survive its tarnished reputation. But there are steps that you as a potential customer of any financial institution, investment or product just have to take from now on, such as:
- What do you know about the company? How long has it been in business, what is its record like? Who are the owners? Where are they located? Do not fall into the FOIL trap (Find Out Information Later) because of the financial buzz. Do your research.
- ?What have you heard about this company in the press, on social media whether positive or negative?
- ?How much risk can you afford to take? What that really means is how much can you stand to lose without getting into financial hardship.
- Remember, in all cases investments can go up as well as down so you must factor in how long you plan to invest in any product.
Doing the proper due diligence when investing in any financial product should and must take place with a qualified and registered financial advisor. You don’t want to jump on the hype with your eyes wide shut. You want to be armed with all the information good and bad that will allow you to make a well-balanced decision and on your terms, not just because of the fear of missing out on an exciting monetary opportunity.