It appears that those who called Bitconnect a scam were right. Bitconnect is now a confirmed exit scam and all BCC tokens are worthless. There was always a chance that this could be the case which is why I avoided promoting Bitconnect through the referral program. Any money that I put at risk was my own and all losses are mine to take. The lesson in crypto is do not invest what you cannot afford to lose and understand the risks vs benefits.
Why is Bitconnect an exit scam? I reached this conclusion based on how they decided to shut down their website. They simply do not have any tokens as they likely dumped them on the exchanges while all account holders have their tokens locked on these exchanges. The end result is BCC will be worth $0 at some point while insiders at Bitconnect likely got out of BCC using BitconnectX which I suspect is also part of the exit scam.
Remember MtGox? We have seen this happen before. When MtGox happened it crashed the markets and set back the crypto space for a good while. This time it is a bit different but because so many new investors were burned by Bitconnect it is going to set back marketing of crypto for a good while.
The way I think about investing in crypto is I have different categories:
- Sure things. These include investments which I have looked deeply at the fundamentals and am almost sure that it will go x10 or x100. These include for me ENG (Enigma), RLC (iExec), ETH(Ethereum), Steem and Tezos.
- Moonshots. These include investments like Tauchain or EOS. These moonshoots are technically feasible but also very high impact world changing attempts.
- Gambles. These include the now confirmed scam Bitconnect and other very high risk high reward also know as HYIP. These are the equivalent of Satoshi Dice. ICOs are also included here because ICOs are pretty much gambles.
The interesting question now is how will the popular Youtubers who promoted Bitconnect aggressively for the past 6 months respond to being called scammers? They promoted a scam after all.