Bitconnect is an obvious scam, with many egregious red flags. I'm truly amazed that anyone is willing to buy into it at $115, but history has shown that anyone able to pay out gains reliably for a little while can generate FOMO and rope in new money for awhile.
But I guess if a consistent scammer who pushes all his followers to lose money on mining contracts and scam coins so he can get more referrals tells you to, at least some lemmings are going to follow him right off the cliff.
For those who aren't sold on guilt by association, why don't we just take a look at a few of the most egregious red flags in Bitconnect, shall we?
Red Flag #1: Unsustainable Gains
I put our "top men" on this one, and they produced for me a high-budget visual aid:
There's just no possible way this is sustainable. It's only possible overbrief periods of positive variance, trading with either massive capital or massively risky levels of leverage and near-perfect decision making.
In other words, if it's real, it's either luck or insider trading.
Bitconnect claims to use these proceeds to run a trading bot / trading system, which they keep proprietary. Any bot that could sustain these gains would be so profitable as to make taking on investors pointless and needlessly risky.
Furthermore, you should be wary of anything that requires a "capital lock-up" without good reason, particularly if there is no way to cash out early with penalty.
Flag #2: No Exchange Support, also known as "completely fabricated market cap". - Coming in Part 2.
Sources: Google, Bitconnect.co, Bitconnectcoin.io, CoinMarketCap, CoinTelegraph, Reddit, Steemit, NY Daily News, Bitcoin Wiki, Seljaci.tk, Bitcointalk.org