The collapse of Bitconnect: Was it FUD or The "con" of the trading Bot....Hallmarks of Ponzi Scheme

The cryptocurrency that mystify the masses and gathered traction of epic proportion as it climbed the ranks of Coinmarketcap, leaving well wishers elated and critics worried. "Ponzi scheme" was often heard, 40% a month with a guaranteed daily 0.10%, 0.20% and 0.25% payout depending on your investment. The biggest catch was the "proprietary trading Bot" and a blockchain base on POW/POS scrypt algorithm. Added to this elaborate model it was powered by a relentless socially engineered feeder program, 'their referral program'. The oldest game in the book of marketing and one that made this cryptocurrency a powerhouse. As a cryptocurrency open mind, I started doing my digging, the trading bot narrative wasn't far fetch for me as today's market's are governed by algorithm and proprietary trading software of varying degrees. Nonetheless, what really catch my eyes was the concoction of a blockchain where these investments and payouts are verifiable. I was hesitant with uneasy coverage it was getting but sold on the blockchain.

The elaborate model was well orchestrated as it was built on a asset that seem to only go in one direction, Bitcoin 1000%+ gains meant that everyone got a taste of the pie and those that were early adopters benefited immensely. The scheme was raking in Bitcoins, the price possession, BCC trace BTC like a brother. Bitconnect benefited from its design of low supply coin, market dynamics played out, demand by investors for tokens to stake and do loans, the party seem like it could never end. But there was a odd weekend beat, lets call it the weekend dumped, the BCC price plummeted, I suspect the early adopters or big fish was cashing out. The middle of November, there was one dump where the BCC price drop and the synchronous movement with BTC was lost. I believe this is where things got ugly in the circle, the guys behind the scheme never cap how much each one should take out from the scheme even with the fall of BTC. The appetite of the crowd was now larger, with promoters and early adopters cashing out coinciding with the fall in BTC. Bitcoin did not do its job, it should have kept rising and the USD BCC payouts would made sense with the relentless social feeder program but if there nothing coming in to maintain what's going out, the players on the poker table were getting nervous. A number of fix was performed on the exchange, website going down and coming back up, then the breathe of fresh air came with the "Cease and Desist".

The ploy was to now play the victim and get the camp fired up, I believe most of the promoters knew what was going on but for them this party was to sweet to let go and the faith and cult religion started. Rally behind Bitconnect, after all some of them profited thousands, millions in some cases, the scheme changed their lives. Even Madoff would have been impress, anyone would have fallen for this narrative especially if you have some extra money laying around. Its really a shame that the narrative that so many people bought was never executed, the developers could not even program a Bot to obey trades on EMA whether it was (20, 50, 55, close). One thing is clear from this shenanigan the big winners were inner circle and promoters. Its cult-like among them in the face of obvious financial distress to others, some have jump to promote other schemes. Probably its human, we tend to owe some form of loyalty to a person or entity that has impacted our life financially.

Probably now is a good time to reflect on some thoughts from Professor Rick from Yale School of Management as he covers the topic of Ponzi schemes as it related to Madoff fiasco

In the religion of 'Bitconnect" the Bot existed and its definitely going to come back bigger and stronger, the price is going back to 300+ per token, hold the coin, buy the dips and Biiiitttttconnneeeeeccccccccctttttttttt (sarcasm).