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Is Bitconnect a Scam?

We had previously published an article asking whether Bitconnect was a scam. Well quite obviously it turned out that it was – you can read our full review of it here.

Basically we had warned this looked like a massive Ponzi scheme and indeed it collapsed earlier this year, with some people unfortunately losing thousands of dollars.

It was always incredibly high risk and was just a question of how long before it shut down, which for some people sadly wasn’t long enough.

As we said in our review, please avoid anything promising you returns of 1% a day or anything like that, they are clearly and mathematically unsustainable. Quite simply if something seems too good to be true, it normally is…






22nd October 2017

One of the most discussed cryptocurrencies at the moment is Bitconnect. Some people claim it’s a scam, other people think it’s the best thing since sliced bread. 

So which is it?

The returns promised by Bitconnect are pretty amazing, with up to 40% interest per month being claimed on their website.  

By compounding your returns, it could be possible to turn a $1,000 investment into $200,000 in just 18 months. 

With results like that, it is no wonder some people have been getting very excited about Bitconnect, whilst others maintain that it can’t be real. 

The strange thing about this is that even though there is a risk it could be a Ponzi scheme, the potential returns are so high that some people still consider it worth the risk to invest.

As crazy as this sounds, we will expand further below as to why exactly that is the case, as well as take an in-depth look at whether we think Bitconnect can be trusted or whether it is in fact just an elaborate scam.


What is Bitconnect?

Before we move on to discussing the aspects of Bitconnect that have led some people to think it might be a scam, we must first look at what exactly Bitconnect is and how its platform works, so you can understand more clearly why there is controversy.

Firstly, here is a short video from the Bitconnect team themselves explaining what it is all about:


Hopefully that has given you a reasonable introduction to it. Now we will look at it in more detail.

Bitconnect is both a cryptocurrency in itself (the code for it is BCC) and a platform where you can invest in a range of opportunities around Bitconnect, including: 

  • – Buy some Bitconnect and hold it
  • – Mine Bitconnect
  • – Stake Bitconnect
  • – Trade Bitconnect
  • – Lend out Bitconnect to a trading bot

All of these options offer the potential of making substantial returns. 

Lets have a look at each of them in turn.


– Option One: Buy some Bitconnect and hold it

This is the most straightforward option. Upon registering on the Bitconnect platform, you have the option of buying some Bitconnect coin, which at the moment you can only do with Bitcoin. Then you could just hold it and see whether it rises over time.

Looking at the history of Bitconnect coin since it was launched, it has steadily risen from $0.15 in January 2017 to over $200 today.

You can see the growth in the graph below:

BitConnect Chart

Graph from

The green line is the value of Bitconnect in US dollars, the yellow line is the price in Bitcoin and the blue line is the market cap.

So that means it has risen over 1300-fold – or 130,000% in less than one year.

Now it is important to remember that those are the historic returns and there is no guarantee that it will continue rising in future.

That depends quite simply on supply and demand. 

At the moment, there isn’t much point in holding Bitconnect in your wallet because you can stake it instead and make more money – as long as you are prepared to hold it for at least 15 days. We will look at staking further below.


– Option Two: Mine Bitconnect

Bitcoin Mining

The second option you have on the Bitconnect network is to mine it. This means you are lending your computing power to verify the Bitconnect blockchain and you get paid with Bitconnect coins depending on how much computing power you are able to lend.

You can either solo mine, whereby you will be mining on your own and will probably need considerable computing power available to you. Or you can join a mining pool, where you are part of a large group of users who ‘pool’ their resources together to mine. The amount of coin is distributed depending on how much work you provide to the pool.

A total of 2.6 million Bitconnect will be produced through miners. Bitconnect (BCC) mining will continue for 1 year with 10 BCC generated every 2 minutes.


– Option Three: Stake Bitconnect

The next option available to you on the Bitconnect platform is to stake Bitconnect (BCC). 

This means essentially you are helping to mint the new BCC coins and you get paid a little bonus for doing that, as opposed to just holding BCC in your wallet. 

Here is a look at the returns you will get from staking Bitconnect:

Stake BitConnect

At the time of writing, we are in the second block (July 2017 to December 2017) so you would receive 8% interest per month for staking Bitconnect.

You need to stake Bitconnect (i.e. hold it in the relevant wallet) for at least 15 days to receive the interest bonus. Obviously the longer you stake it the more interest you will receive, on top of BCC potentially going up in value over that time. 


 – Option Four: Trade Bitconnect

Trade BitConnect

This option just involves trading BCC with other members depending on whether you think the price will go up or down. Bitconnect have their own exchange platform which allows you to trade directly without needing to go on a third party website.

Trading Bitconnect has risk and you could lose money if you incorrectly predict the price movement, just as with anything else you may trade. 


– Option Five: Lend Bitconnect to a trading bot

Basically what you do with this option is put in a certain amount of money for a given period of time and then you receive daily interest based on how well the trading bot does.

You have to keep your money tied up for between 120 days and 299 days depending on how much you invest if you use this option.

You can also get a bonus based on how much you invest. Here is a table showing how it breaks down: 

BitConnect Coin Lending

As you can see, they advertise that you can receive up to 40% per month in interest, which is obviously a very high amount. 

The amount of interest you actually receive depends on how volatile the Bitcoin price. So if the Bitcoin price moves up or down a lot in a 24-hour period, you will get more interest than if the price is stable.

You must keep your money locked up for the specified amount of time depending on how much you invest. So if you invest between $100 and $1000 for example, your money will be locked up for 299 days and you will not be able to withdraw it during that time. 


Real Returns – Verified

We have registered on the Bitconnect site, deposited some Bitcoin and have invested in their lending scheme.

We can confirm that we have started receiving returns from this and these are real and genuine. The returns are in accordance with those advertised on the site and recorded by others on YouTube videos etc. It is possible to withdraw these earnings from your Bitconnect account to a separate wallet (e.g. Coinbase or

We will be recording the full results on our review page here, but for now we are content that this aspect of the site at least is genuine and payouts are real.



Why the Controversy?

Given that the returns from the lending scheme appear to be real, you may be wondering what all the controversy is about.

The first four options we have discussed above are not particularly controversial and you can do most of these things with other cryptocurrencies. Obtaining 8% interest per month for staking BCC is a little high but is certainly not outlandish or likely to make people think this is a scam, particularly as that interest rate is temporary and will decrease over time.

It is the fifth option however, the option to “lend” Bitconnect to a trading bot – and the returns it can generate – that has led some people to conclude this could be a scam. 

Let’s dig in to those returns in a little more detail. 

Here is a page looking at the records of daily interest received by people who have lent money to the bot:

Bitcoin Volatility Software

At the top it shows the last 5 days’ credited interest. As you can see, the last five days have yielded 1.38%, 0.87%, 0.16%, 0.89% and 0.26% in interest. Today’s is still in progress so we don’t know yet how much interest it will yield.

Now if we scroll down we can see the daily interest amounts for the last month.

Bitcoin Daily Interest Chart

As you can see, it has ranged from around 0.2% per day to over 1.8%. The interest rate varies a fair bit, but it is never less than zero.

If we take a look at the one year chart, we see something similar:

Bitcoin One Year Daily Interest Chart

Again, lots of good days, some even above 4%, but most are between 0% and 2%. But again no losing days.

Then we can find out what the average interest rate has been by using this box just to the right of the chart:-

Bitcoin Projected Earnings Calculator

This tells us that the average daily interest rate for the last 6 months has been 0.93%. And that is before any bonuses have been added. 

So just as an example, if you had invested $10,010 over the required investment period of 120 days, you would have got $24,184.16 back, which is a profit of $14,174.16.

That, as anyone would recognise, is a pretty phenomenal rate of return (141% in fact) and is one that would be hard to match anywhere. 

This in itself gives some people pause for thought, but as we have alluded to above, there is more…


No Losing Days

Putting coins into dividend jar

This is perhaps the nub of the matter for some people with regard to the trading bot. As you can see from the results above, there have been no losing days for the trading bot. It either makes a good return, or nothing. 

Anyone who has traded will know this is very difficult to do, particularly over a long period of time like a whole year. Even the best bots and the best traders will have losing days.

Some explanation of how the bot is able to have no losing days would be helpful in dispelling some of the skepticism around Bitconnect, but we cannot see this anywhere.

On the Bitconnect website it just says “Volatility software offers you a variable interest as per bitcoin market fluctuations” and that the software tracks “the volatility of BTC vs USD and the volatility of USD against major world currencies.”

So very little information there and we have struggled to find any more detailed information about the bot anywhere else either.

In summary then we have a mysterious trading bot then that is able to generate returns and ensure that you never have a losing day. This sounds just too good to be true for some people and has led the more skeptical among them to ask “if they have developed a bot that never loses, why can’t they just go and get some capital investment and use it themselves to make billions?”

This is a good question and is one that we cannot really find an answer to.

But perhaps the returns you receive are not necessarily exactly the same as the bot has achieved – these may be smoothed out by Bitonnect. So for example if this was the case, then theoretically one day it might make 5% and the next day -1%, but instead of giving you those returns, it might decide to give you 0% and 1% – also keeping a little in reserve.

The advantage of this would be that more people are likely to invest if they see there aren’t losing days and thus it keeps things progressing more steadily from an investment point of view. For current investors it is also a smoother ride, without having to endure the stressful ups and downs that you get with most trading. 

Just to be clear though, this is just speculation – we have no idea how the bot actually works and whether the returns are smoothed out for investors. It is just a possible explanation of how you could have a trading situation where there aren’t losing days. 



Compounding Your Returns – Where the Fun Really Starts

Man with money

The returns are already pretty crazy with Bitconnect lending but that is before you consider the potential of compounding returns to really ratchet things up. 

What you can do with Bitconnect is take the earnings from your daily interest and reinvest them into lending.

So for example if you had $1,000 invested and received a 1% interest return of $10, you could reinvest that into the lending bot.

It might not sound like much at first, but things can really escalate quickly. That is the power of compound interest. Indeed, Albert Einstein called it “the eighth wonder of the world.”

Here are some examples and you will see just how amazing the returns can be:

If you started off with an investment of $1,010, had an average daily interest rate of 1% and reinvested the interest payments into the trading bot, here are the returns you would have:-

  • – $5,970 after six months
  • – $37,610 after one year
  • – $225,500 after 18 months

And that is just with an initial investment of $1,010. Pretty incredible isn’t it.

That is another reason why people think it is the too good to be true.


Could This Be A Ponzi Scheme?

Ponzi Scheme

Given these incredible returns, some people have pondered whether Bitconnect is a Ponzi scheme.

In case you aren’t aware, a Ponzi scheme is where the underlying investment is not making money (or much money anyway) so the owners of the scheme use funds from new investors to pay existing investors their returns, rather than from money being made from the investment scheme itself.

At some point there aren’t enough new investors to continue this pattern, so the whole thing collapses as there is no money to pay all the investors. 

So the question is whether Bitconnect are actually using the money from new investors to pay existing investors rather than from the earnings of the trading bot.

Now in reality there is no way of knowing this and only the owners themselves will know if it is the case.

However, if we go back to the original launch of Bitconnect, each coin was worth around $0.12, where as now they are worth over $200. 

We don’t know how many coins the owners of Bitconnect kept for themselves at the outset, but you would have to think that with a price of $0.12, it would be at least a million coins, if not quite a few million. 

Those coins are now worth 130,000% more, and could represent a huge amount of capital for them to keep the whole operation going – possibly even in the billions if they invested millions of dollars originally.

Plus they will have benefited from the increase in the value of Bitcoin, which is up well over 300% this year, as people have to deposit in Bitcoin on the Bitconnect platform.

In addition, it may be that the bot operates well and does bring in some extra income, although not as much as advertised.

Put all these things together and you have the basis for management to be able to continue paying people the substantial returns, because everything has been moving upwards substantially and there is a huge amount of money in the kitty.

So all in all it looks to us that unlike most Ponzi schemes where the actual investment scheme itself doesn’t make money or makes very little money, Bitconnect must be making substantial returns just on the basis of the growth in value of Bitconnect coins alone.

Now that doesn’t mean for sure this isn’t a Ponzi scheme, or that at least a small portion of new investors money isn’t being used to pay existing investors. As we say, you cannot know this for sure either way and only the owners will know that.


Conclusion – A Risk But For Huge Returns

Bitconnect offers the potential for huge returns if you use its lending scheme and reinvest your returns.

Doing this, you could turn $1,000 into over $200,000 in just 18 months.

These kind of returns have made some people claim that this must be a Ponzi scheme or a scam.

The bottom line is you can’t be sure if it is or not. Our experience of using Bitconnect ourselves is that the payouts are real and lots of other users have confirmed this via YouTube videos of their accounts.

The underlying asset of Bitconnect, plus the Bitcoin used to access the site’s investments have appreciated hugely in value over the past year, providing substantial capital for the company.

This provides a degree of confidence that there should be significant funds there to pay investors, even if the trading bot doesn’t in reality deliver the returns they claim. 

However, the fact is that cryptocurrencies are completely unregulated so no-one can be sure what will happen with this. It could disappear overnight and you could lose all your investment.

So whether you invest or not should depend really on how tolerant you are of this high level of risk. And as always, please do your own research and due diligence. 

For the potential to turn $1,000 into over $200,000 in just 18 months though, some people would say it is worth the risk of Bitconnect potentially going under. If you agree with that depends on your own attitude to it.

For our part, we are willing to risk a small amount on Bitconnect and see what happens. If it all goes pear-shaped and Bitconnect collapses, then we are prepared to lose our original investment.

But if it goes well and Bitconnect delivers on an interest rate of somewhere around 0.8% per day or better, then we will do extremely well.

It seems like a crazy thing to say to still be invested in something that could all go wrong, but it will be an interesting experiment in any event and if things do go belly-up, at least we will be able to report it here so that you will know about it, which is what this website is all about really.

So please stay tuned to our review and we will keep you updated on how things go. 

In the meantime you can check out Bitconnect for yourself here.










1 reply
  1. Douglas Chert
    Douglas Chert says:

    FBI Seeking Victims in Bitconnect Investigation

    The FBI is seeking potential victims who invested in the cryptocurrency
    Bitconnect coin (BCC), which was first released through an initial coin
    offering orchestrated by Bitconnect in November 2016.

    For a majority of BCC’s existence, the only place to purchase, trade, or
    sell the cryptocurrency was the through the proprietary exchange
    hosted by Bitconnect. By mid-December 2017, BCC boasted a market
    cap of over $2.5 billion. Bitconnect guaranteed investors up to a 10
    percent total return per month on their investment, following a tiered-
    investment system based on the sum of an investor’s initial deposit.

    The entire market for BCC crashed in late January 2018, after two U.S.
    state-level securities regulators issued public letters warning investors
    of the Ponzi-type nature of Bitconnect. This led to Bitconnect
    completely shutting down its exchange for BCC, eliminating the market
    for the cryptocurrency and stranding investors with near-worthless

    If you invested in Bitconnect, please complete the questionnaire on the
    website. Your responses are voluntary but would be useful in the
    federal assessment of this matter and to identify you as a BCC investor
    and/or potential victim. Based on the responses provided, you may be
    contacted by the FBI and asked to provide additional information.


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