Bitconnect, the financing and exchange system which has been suspected by several in the crypto community of becoming a Ponzi scheme, has declared it is shutting down.
In a launch on its own site the stage said the shutdown is credited to “constant bad press” enclosing the stage, two cease and desist letters from the Texas and North Carolina’s securities boards, and constant DDoS attacks on the stage.
Though the stage says they are refunding all outstanding loans at a rate of $363.62 USD (a mean of this token’s cost during the previous 15 times), the Bitconnect token is now trading down ~80 percent and value less than $40, so while consumers might have been made whole on a BCC-equivlent, most are suffering serious financial losses concerning USD or even Bitcoin (that is the way they left their initial investment).
At the past The token has shrunk over 80 percent to approximately $37 down from over $200 only a couple of hours ago.
If you are not knowledgeable about this stage, Bitconnect has been an anonymously-run website where consumers can loan their cryptocurrency into the business in exchange for outsized returns based on the length of time the loan was for. By way of instance, a $10,000 loan for 180 times would supposedly offer you ~40 percent yields every month, using a .20% per day incentive.
The platform stated it generated yields for consumers utilizing Bitconnnect’s trading bot and “volatility trading applications”, which typically averaged approximately 1 percent every day.
Obviously profiting from market volatility and fluctuations is a legitimate trading strategy, and you employed by lots of hedge funds and institutional traders. However, Bitconnect’s guarantee (and payment) of oversize and ensured yields led many to think it had been a ponzi scheme which has been paying out present loan interest with recently pledged loans.
Below is the graph that will determine how many users could create the utilizing the system.
All of Bitconnect loans were denominated in U.S bucks but needed to be produced in BCC, the system’s native cryptocurrency. So so as to create a loan users will need to deposit bitcoin to the system then swap it for BCC at whatever the market rate has been. And loan principal was just paid out just at BCC, meaning consumers would need to convert it back into bitcoin ( then if wanted, USD) following the loan period was completed.
The need for having BCC to take part in the financing program resulted in a pure spike in demand (and cost) of BCC. In under a year that the money went from being worth less than a buck (with a market cap at the millions) into some all-time large ~$430.00 using a market cap over $2.6B.
However, now with no additional applications for your token, it is very likely that the cost will continue to plummet. The company did state that the ICO because of their Bitconnect X trading platform will still occur,and trading to your BCC token will last there.