Really good thoughts! I'm also very sceptical to bitconnect. Perhaps bitconnect does not lend out the Bitcoin but instead tries to increase value by trading them. I guess they are screwed then.
If they lend them out, who would borrow Bitcoin? Well that could be used for shorting Bitcoin if you are bearish. Borrow 1btc, sell it for $4200, market falls to $2000, buy it back and pay that BTC to bitconnect. That's a good profit but extremely risky.