Review – to Ponzi or Not to Ponzi…

Writing a proper and objective Bitconnect review is a rather difficult undertaking at this point in time, given the controversial nature of the operation. The debate regarding’s legitimacy is raging, and when we say raging, we mean emotions running high on both sides of the barricades. What exactly is Bitconnect though? Based on its official site (, it is not easy to correctly answer that question.

The website itself is quite unimpressive. It delivers weird bits of information in broken English, and it fails utterly to make its case clear for someone visiting the site for the first time. While we’re fully aware that the use of proper and grammatically correct English a legitimate operator does not make, it does indeed go a long way towards building that all-important initial trust.

Let us just leave that aside though and immerse ourselves into the finer details of what Bitconnect peddles, taking a look at both sides of the debate, on every issue.

The operation defines itself as a “self-regulated financial system”, designed to create investment opportunities for the cryptocurrency community. The operation features its own exchange, its own lending program and its very own digital currency, known as Bitconnect Coin (BCC). BCC was launched through an IPO – as it is fashionable these days – and it has turned out to be surprisingly successful over the last year or so. Suffice to say in this regard that from an ICO price of $1, BCC is currently trading in the neighborhood of $200. To call that investment a mind-boggling one, would probably be an understatement at this point.

This sort of wild success is what defenders of the project point to, when they make their legitimacy-case. It needs to be made clear though that this success alone says nothing about whether or not Bitconnect is indeed a Ponzi, as many allege. It only says that if it is indeed a pyramid scheme, it is quite possibly the biggest and most successful one of the cryptocurrency age. The reason why we are seriously examining the Ponzi-possibility is that there are indeed scores of red flags pointing in this direction, many of them so fundamental and obvious that they simply cannot be ignored.

So what exactly is it that Bitconnect does, and how do the above described three structural elements come together, when it comes to creating the investment ecosystem BCC creators seem so proud of?

The business model requires investors to make a bitcoin deposit with the site, to buy Bitconnect Coin directly from the exchange of the operation and to invest that BCC in a lending-scheme, which will then yield HYIP-like daily/monthly interest, eventually returning the investor’s initial stake as well. Investors are offered added profit for bringing new investors into the fold, whichever way they can.

There are several problems with this model, and we’ll take a look at all of them, closely examining every component of the above-described equation.

Bitconnect Coin

At the center of the Bitconnect universe, Bitconnect Coin (BCC) is something that – according to many – is not even needed in the Bitconnect business model. Detractors say its sole purpose to exist is to power a pump-and-dump scheme that will at one point most certainly come about.

While it is certain that the price of BCC is somewhat artificially pumped by the above described business model, the cryptocurrency has thus far been massively successful. Some posters at bitcointalk agree that the Bitconnect business model is a pyramid scheme, but they stand by the fact that BCC is indeed legitimate.

According to the Bitconnect website, there are three channels which influence the price of BCC: the Supply channel, the Demand channel and the Coin Distribution channel.

The Supply channel is based on mining and staking/minting. Mining will eventually be responsible for the creation of 2.6 million BCCs. Staking/minting will continue until the 28 million limit is hit on the cryptocurrency.

Those simply holding BCCs will earn an interest on it, which – for the first 6 months – will amount to some 10% per month, for a total of 60%. In all cases, to earn interest, traders need to lock up their BCCs for at least 6 months.

The Demand channel is powered by the exchange (where investors will purchase BCCs, to participate in the lending part of the investment scheme). BCC staking itself is a demand-generating engine. The skyrocketing price of the cryptocurrency cannot be ignored in this regard either.

The Distribution channel is powered by exchange-based trading (most of which admittedly occurs at Bitconnect’s own exchange) and OTC trading.

Some details about BCC: there are some 7.2 million BCCs circulating at the time of writing, and the total supply is some 8.2 million. The supply cap is 28 million (so it is finite) and the market cap – according to, is currently $1.45 billion. This is indeed a rather impressive snapshot of a digital currency that so many claim is a scam.

The Bitconnect Exchange

The exchange is possibly the most straightforward component of the Bitconnect ecosystem. This is where the buying and selling of BCC occurs. According to some, the exchange has been used to generate fake trading volumes with, by forcing the latter to add the exchange, where the lion’s share of BCC trading occurs.

Bitconnect Lending

This is where things become a little difficult to explain, and this is in fact where the heart and soul of Bitconnect’s value proposition resides. It is apparently all based on something Bitconnect call the “volatility software” which is essentially a trading bot, that exploits Bitcoin volatility. In order to be able to deliver the phenomenal interest rates offered through the lending program though, this trading bot needs to be unrealistically successful. This is what most Bitconnect detractors (and common sense-based people) dislike about the whole setup.

The purported volatility software cannot mathematically generate enough revenue off Bitcoin volatility to cover the interest given out by the Lending system. As some are quick to point out, if it were indeed able to trade Bitcoin as successfully as it is claimed to, the whole lending/cryptocurrency system built up around it wouldn’t make much sense. Its creators could gain access to virtually unlimited funds to run the bot, from private/institutional investors, who would doubtlessly jump on-board the moment they were provided with solid proof. Thus the need for the Lending scheme would simply not exist.

Bitconnect Lending

From an objective perspective, if it became known that the volatility software was indeed a dud, and that the interest rates were covered through the Bitconnect Referral System, Lending would collapse, and with it, the most solid pillar of BCC demand. Logically, that would result in the eventual collapse of BCC itself.

This makes it obvious that skeptics do indeed have a point when they argue that the whole Bitconnect ecosystem relies on something as fragile as the volatility software, which is essentially an unknown quantity in its current form.

What sort of too-good-to-be-true interest rates are we talking about though?

– those who lend (invest) between $100 and $1,000, will have their investment locked up for 299 days. It will allegedly generate up to 40% interest per month for the period, based solely on the antics of the volatility software. Nothing is guaranteed on this investment-tier.

– those who deposit between $1,000 and $5,000, get the same deal, plus 0.10% daily guaranteed interest. The investment period is just 239 days on this tier.

– in the $5,000 to $10,000 range, the guaranteed daily interest shoots up to 0.20% and the investment period whittles down to 179 days.

– those who invest more than $10,000, get the usual 40% per month deal, plus 0.25% guaranteed interest, and they’ll be allowed to cash out after 120 days.

The 0.25% guaranteed interest alone (without taking into account the monthly 40%, allegedly delivered by the Volatility Software) means a 91.25% yearly return, which indeed is the definition of too-good-to-be-true.

To all the above, we need to add the referral system, which adds 7% on first-tier referral deposits and goes some levels deep (the program has been modified a few times).

In regards to the Volatility Software, it has to be pointed out that has a special page dedicated to its results. On some days, there are no profits, on other days, the profit rate almost hits the 2% mark. What’s peculiar is that there are no losing days. The trading bot always does its job perfectly and breaks even in the worst case.

The Bitconnect Referral System

According to the pyramid-scheme theorists, the Referral System is in fact responsible for the payouts that Bitconnect’s lenders continue to receive, adding the last needed piece for the Ponzi scheme to be complete.

With some Bitconnect users claiming that they have no interest in the referral scheme at all, and that they would continue lending without that scheme in place, it needs to be said, that according to the Pyramid-scheme side, the Referral System is the means by which new investors are attracted. It may indeed be that it is from the fresh deposits made by these newly referred investors, that old lenders are paid.

Bitconnect Referral System

The referral reward is merely the trigger that prompts investors to attract fresh blood into the fold. Thus, lenders “uninterested” in the Referral System may in fact be sealing their own financial demise.

Having taken a close look at the obviously pyramid-shaped structure of the Referral System, we can only conclude that the Ponzi theory cannot be dismissed. Still – as always – it has to be said that by all accounts, Bitconnect lenders keep getting paid, and for some people, that’s more than enough proof of legitimacy.

Bitconnect’s Background

While Bitconnect seems to have spread across most of Asia, featuring local sites in Japan, India, the Philippines and a bunch of other countries, its background (corporate or personal) is essentially unknown. The contact page only features an email form, which – in this day and age, for an operation of this magnitude – is insufficient. We have to call this yet another red flag.

BTCPay Debit Card

Bitconnect are gearing up for the planned introduction of their BCCPay debit card, a move which has indeed been announced a while ago. Given that registrations for the service have already kicked off on December 1, 2017, taking a closer look at this “payment system” is now definitely warranted.

Fitting in with the obvious plan of the operator to launch new products periodically, to keep user interest alive, BCCPay offers quite a number of benefits to its users. Transfer fees are slated to be under the 1% mark, multiple currency deposits can be maintained and the cards can be used at over 30 million ATMs worldwide. is the website of the new Bitconnect debit card and to grab the card and load it, users have to create an account there. Once done, they can deposit a variety of currencies, off which, they can then load their BCCPay cards with bitcoins or Bitconnect Coins. Transfers of these virtual currencies through the card can be done at a swipe.


At the time of posting this review (October 19, 2017), the SimilarWeb global rank of was an amazing 8,630, indicating it’s a highly popular site. More than 30% of the visitors to the site seem to live in Vietnam or the United States. Other countries where is popular include India, Russia and Ukraine. It’s not surprising to see that almost 50% of the traffic is referral traffic, emphasizing how important the referral program is for this operation.

Bitconnect Review Conclusion

Bitconnect’s Lending program has all the makings of a Ponzi scheme. There is simply no way around this. Still, it seems to work, and that may be because its creators may have inadvertently stumbled upon the perfect pyramid recipe. While the core concept of the Volatility Software does not seem to hold water, every other detail clicks perfectly. For instance, the fact that lenders have their investments locked for a certain period of time, offers great protection against a sudden, bank-run-style collapse.

People who say that while the lending program is certainly a scam, Bitconnect Coin is legit, fail to understand that the lending program is in fact one of the main engines pumping value into the cryptocurrency – as explained above. Then again, BCC may theoretically simply outgrow its Ponzi roots and establish a sort of market presence that will ensure its continued existence even after the collapse of the Ponzi that gave birth to it. The odds on such a stunt are rather adverse though.

The bottom line: Bitconnect may indeed be a Ponzi and if it is that, it is certainly one of the most successful and lasting such schemes in history. It is the type of setup the more one reads into, the more he/she becomes convinced that it is indeed a Ponzi.

It is paying though, and as long as it is, people will continue lending/investing and pumping value into BCCs. For the time being, just holding BCCs seems like an irresistible proposition too.

Update (January 2018)

On January 5, 2018, the Texas State Securities Board decided to make a move that may turn out to be the first nail in the coffin of BitConnect. The regulator nixed a planned token sale from Bitconnect, originally scheduled for January 10. The reasons provided by the regulator in a statement, are interesting – to say the least.

Apparently, the new token, called BitConnectx, promising yearly returns of 100%, was found to be an unregistered security, the sale and promotion of which is obviously illegal. The TSSB also found that BitConnect were recruiting promoters for the ICO/Bitconnectx token in the Lone Star State as well as in other US states, effectively enticing people to commit an illegal act by promoting unregistered securities.

All that is eerily reminiscent of the action taken against notorious scam USI-Tech, but it is not all there is to the affair. In addition to the above, the TSSB’s statement also decried the fact that besides peddling unregistered securities, BitConnect failed to make its financial status clear, also failing to deliver any kind of information on the way it plans to realize its profits. The actual location of the operator is also one of the big unknowns of the BitConnect scheme.

None of these issues prevented the launch of BitConnect’s currently ruling token, BitConnect Coin (BCC) also proclaimed a fraud and scam by some experts, and a classic Ponzi scheme by others. Whether the TSSB’s move marks the beginning of closer scrutiny of semi-shady operations such as BitConnect, remains to be seen. It certainly does not bode well for the pushers and holders of BCC though.

The wheels are finally falling off the Bitconnect wagon

Following scrutiny and a couple of warnings from regulators in North Carolina and Texas, BitConnect have effectively shut down their lending platform and exchange, yanking the floor squarely out from under their artificially propped-up token, BitConnectCoin (BCC). The value of BCC dropped 91% in response, and it may yet drop closer to its real value soon, which is presumably $0. From an all-time high of $437, BCC is currently trading at $24.

As pointed out in this review, BCC has always looked like a Ponzi: a well-constructed Ponzi, but a Ponzi nonetheless. It seems like the truth and cold-hard reality have finally caught up with the scheme.

This is indeed the fate that awaits all similarly built-up crypto scams. As the industry matures, there is less and less room for shenanigans such as this, USI Tech, or other, less “successful” constructs of their ilk.

BitConnectX Coin

Despite warnings and cease and desist orders from US regulators, and despite the fact that the core of its operation in the US has been shut down, BitConnect went ahead with the launch of its much-chagrined BitConnectX coin. There is a website up now, which offers specifics on the ICO and the new crypto coin, and which hypes this newest attempt on the part of BitConnect’s creators to defraud the public some more.

For BitConnect, and their shady lending system – on which they then built up an entire make-believe crypto ecosystem – BitConnectX is not the first ICO. In fact, Bitconnect Coin (BCC) still exists, though its value has recently dropped from more than $400, to around $14 (which is still about $14 above its real value). Exactly why BCCX is needed is quite unclear at this point. It may be the last “stop” of the BitConnect gravy train though, the last hooray, which will doubtlessly manage to draw in some new money, at the rate of $50 per BCCX.

The maximum BCCX supply is set to 49 million, with 11,760,000 BCCX to be distributed through the ICO. If only a fraction of that actually finds buyers, the scammers will still enjoy a handsome windfall. BCCX is clearly looking to cash in on the gloom and doom currently surrounding Bitcoin’s shortcomings in the way of transaction fees and confirmation times. The new coin is said to use PoW and PoS algorithms to secure the blockchain, and it supposedly makes instant worldwide payments possible. Transaction fees are said to be “incredibly low.”

Like its predecessor, BCCX will supposedly earn interest for its owners, as long as it is kept in Qt Desktop wallets, through which transactions are allowed to flow. The ICO kicked off on January 10, and it is supposed to last till February 23.

Will people buy into this new BitConnect pitch? We advise you to steer clear of this mess, and heed the warnings of US regulators if you are not willing to listen to us.  

Verdict: Bitconnect & BitConnectX are SCAMS!

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