I will start this article with the facts as actually the things are standing now.
The market is down, the confidence of the investors is low and this was supposed to come after last year's bull run. Whatever people invested in, turned into a profit in a very short time. It is bad for those who start crypto right now and it is a good thing for those who could accumulate some funds for further investing in a situation like this. You always have to have reserves for these situations, when crypto is on sale.
Related to the lending platforms, especially Bitconnect's end decreased the confidence in this type of investment even further, therefore these coins are suffering the most. What happened is, that Bitconnect finished their lending activity, where people could lend their money to Bitconnect's platform and they could gain daily income/interest based on their investment. Their investment was taken to the trading bot (about this a bit later), which started to trade buy/sell Bitcoin. The profits were made based on the volatility of Bitcoin.
Back to Bitconnect, once they stopped the lending activity, people were "refunded" by giving them their invested amount in BitConnect Coin (BCC) and its value was stated at 363.xx (previous 15 days value average). This wouldn't be a problem at all, if BCC would have kept its value at that fixed, average value. But since behind that coin, the most valuable thing was the lending platform itself, (which we all know by now, that they finished its operation) the value of the coin decreased badly once people realized what is going on. In addition, there was a big FUD, people dumped BCC aggressively driving the coin's price down to $5/BCC. In fact, this was not a refund from BitConnect, it was something with which they can say, we refunded everyone.
Many people lost their investments, serious money was invested in this platform, life savings, houses, cars, etc. For that I can't say anything more than people were to blind to see and too greedy in the same time. I had a BitConnect investment myself, but I never went into it, all in. Never go into anything all in! Never! It was a good lending platform and it is still not dead, their website is working, without the lending option of course. They may come back in a different for, they may not. Nobody knows, but the price is still between $5-10/BCC showing that people think, that there will be a come back in a different form.
The reasons why BitConnect finished their lending operation on their platform by their announcement was the lack of interest from the people because of the new lending platforms ICOs (I believe) and a Ddos attack prior to their "close down". What others may think and there is a truth base, is that the BCC as a coin could not cope with the upcoming capital releases and with the daily interests, since they relied only on the coin's value and new loans to be able to fulfill daily pay outs and capital releases. Therefore, there was no trading bot at all during its operation.
Both options might be true or not, we will never know.
What we know is, that after the closure of the lending operation, the loss was inevitable and here comes in picture the rule what you never have to forget in cryptogame: Never go all in!
People started to blame promoters because of their loss and they said that they would never go in, if they don't see BitConnect promoted on youtube or other social media. Their undereducation in crypto is not their own fault of course, but the responsibility to be eager to know more, when we are investing our money in anything, is totally ours. Whatever what people say, you HAVE to do your own homework as research and questioning. You have to have questions and you have to have a knowledge about a strategy of how to invest in these. This is your own responsibility.
Everyone has to know, that the US Government has nothing to do with other countries' laws, but prevent their own people to do things like these. There is no insurance from their part, not allowing you to do this type of investment. Therefore, do not expect anything from your government to do with your loss. They are more occupied with what would be their cut out of these and how to make this thing, theirs, or at least to have some influence into these things. Now, crypto is exactly contrary to what governments want and except the fact that you have income from crypto and you have to pay taxes, they cannot do anything for you.
USI Tech is an exception here, they want to operate in the US and they did and will do everything necessary to be done to have their programs running until they prosper from that. Will they exit scam? You don't know! I don't know! Can they exit scam? Of course, they can, anytime. The rule of investing is the same as above.
The principle is to play with the house's money and to reach that, you have to get your amounts out. To get your amounts out you can withdraw every day, get referrals and obviously both. This is the way to do it and do not care about others, if they could do it or not. You have to make them aware of the RISK they take and that has to be clearly visible in your promo material. It is still a playable game, but you have to be careful and diversified.
These things drove to the actual situation where the market is bearish and on the top of that, the BitConnect effect is on the lending platforms.
The bear market is because of many Bitcoin/CryptoCurrency related news affected negatively the whole cryptosphere, the governments try to regulate incomes from crypto and the way of how to be taxed, plus the amount of fraud and the possibility of scammers to cheat on people is enormous. Crypto was not and it will never be a safe territory, where you can invest safely and the returns are guaranteed. The diversification is key here too and the awareness is also vital.
You can have measures to be able to be safer. Not safe, safer. The way how you document, store, invest and evaluate things are really important. There are many ways out there how to be safer in crypto, I will try to get through them in the next parts, to be able to give you a point of how is it good to make money. Because there is money.
Back to the lending platforms:
I believe that purely a coin backed lending platform will not be enough. Those platforms with a coin will not survive in the long run. The main point is that there has to be something beyond a lending structure and a coin. Here the fact that you can stake the coin, does not count.
I believe in those platforms with an exchange, with a lottery, market, or whatever what kind of services they can provide above their lending. There is also a trend which tends to change word usage: from lending to saving. Sometimes, this is the same and there are platforms where these things really differ. There can be awards given every day instead of interest. to name one or two of the saving platforms, I would say that Steneum is one of those, where there is an exchange behind the saving platform and based on the fees they collect, the daily awards are given depending of the amount of coins you are locking for different time periods. The other important thing about Steneum is and this is the first platform which offers this service, is the fact, that they don't give you dollars back, once your saving period ends, they give back your coins. By doing that, the amounts locked into the system increase the demand, since those coins are locked and by that there is a huge chance for the price appreciation.
The other platform I believe in, is BankCoin. They will have the same scheme, backed with an exchange and a lottery, but they will not give you back the coin amount invested, they will give you dollars.
In terms of transparency, there has to be improvements made. To have the owners safe and in the same time to be able to look into the operation. A believed bot, does not solve the situation anymore, there is no credibility in people/investors at all. There has to be something real, tangible, something from where people can regain trust. The first platform or platforms, revealing something from how they operate in a way that it is credible, that actually that something makes the whole operation possible, that platform will be the king and the most trustful one.
It is understandable though, that these platforms don't reveal their identities and I truly believe their owners, that they would be at risk. They can risk privacy, safety, freedom. Governments are on crypto. Other organisations don't want you to be rich, they want you to go to work, to take out loans, to have just enough for living and by that to support their operation and to feed their greediness.
There has to be a solution to be able to make things happen and I really want to have something like that available in the future.
I hope, that you liked it and please excuse eventual typos!