Is Bitconnect a Ponzi Scheme or Scam?
Whether Ponzi scheme or not, it is very simple to see how they can afford to pay at least for as long as the cryptocurrency market keeps expanding.
For example Bitconnect say if you lock up $1010 with them for 239 days i.e. 8 months you would get $4742 back. However, let’s assume you bought one bitcoin for $1010 (price for one BTC mid February 2017) you would have $4200 today i.e. after 6 months (2 months to go to 8 months) and you did not need to lock up any of your BTC with anyone. But if you invested your bitcoin with Bitconnect it is easy to see if they (Bitconnect) had a couple of sharp traders who also moved quick enough on recent ICOs they would have made huge profits. On top of all this their own coin has been rocketing (about 500X since November 2016). And they also make profit on their exchange.
I am not defending or condemning Bitconnect, they have just got their maths right and that is how they can pay (at least for the time being).
