Pyramids in the desert with blue skies on a sunny day.

What is BitConnect? Legit or Scam?

I wouldn’t blame you, even after doing some of your own research, if you have no idea what BitConnect is. In this post, I’m going to delve in and provide some clarity about what BitConnect is all about (as impartially as possible). I’ll then outline afterwards why I have not invested anything into the BitConnect platform (which isn’t impartial, at all).

BitConnect CLOSED its lending platform on the 16th January 2017. Check out my recent post if you’d like to read about what happened, why it happened, and the aftermath.

The Basics

BitConnect (BCC) is a cryptocurrency which launched on 15th November 2016 which is owned and operated by Ken Fitzsimmons in the UK. This is likely someone who just stands in, providing anonymity, for the real people behind the company. Recently (September 2017) other company entities have appeared in UK company records.

New BitConnect entities have recently appeared on Company House UK.

It has the 12th largest market capitalisation of all cryptocurrencies which are currently available, standing at $938,943,132 ($136.22 per coin) at the time of writing.

If you cut through the bullshit, BitConnect is all about lending your money out to a trading bot which takes advantage of Bitcoin’s volatility to generate returns of between 0.5% and 1% daily on most days (0.89%, on average, over the last 6 months). To put this in perspective, if you invested $1010 in BitConnect and had a 0.99% (including the .1% bonus) daily interest rate, you’d have a return of 236.61% – which equates to £2389.76 in profit – once your lock-in period of 239 days ended. Holy fuck. Who wouldn’t be drawn in by that?

Interest is accrued daily and deposited into your BitConnect account every 24 hours. These returns are immediately accessible and can be re-invested or withdrawn (0.005 BTC minimum withdrawal). This means that your accrued interest payments should cover your initial capital investment after about 100 days – regardless of how much you invest.

ROI of 236.61%!

The roadmap ends in November 2017. In October (this month), we should expect the smart card and music video album (what?) launch.

There appears to be a very small (looks unofficial) Reddit community here. They have a Twitter feed here, but they don’t seem to use it to engage with the community – just for putting out general cryptocurrency news.

“Should I invest into BitConnect?”

Despite opening an account to understand the BitConnect platform more, I’ve invested absolutely nothing into it. Why? In my opinion, there are red flags everywhere which are screaming to stay away. Things such as:

  • There’s no proof (e.g., raw trade history) that the trading bot, which BitConnect is based around, actually exists.
  • It promises guaranteed returns on investment.
  • Funds invested are tied up for between 120 and 299 days.
  • The growth of platform appears to be driven by their affiliate program.
  • Website and advertising (e.g., video) are ambiguous.
  • Grammar on their website is bad. Hiring someone to check the website for errors really wouldn’t cost that much.

I’m not alone in seeing these red flags. Some well-known and decent YouTubers who publish videos regarding cryptocurrency have expressed their concerns too. I’ve summarised their main points (and linked to the videos) at the bottom of this post. In any case, I’ll go through three of these points in a little more detail.

No Proof that Trading Bot Exists

A recurrent concern across the YouTube videos linked below is that no proof that this trading bot actually exists has been published. Some limited amount of trade history (showing buy and sell orders) would be enough to dismiss a lot of this scepticism. The closest thing I could find – but isn’t good enough – is the ‘Lending Profit Chart’ accessible on the BitConnect homepage or here. While this shows the returns generated by the trading bot each day, it doesn’t prove that it’s actually doing it.

Ask yourself: why wouldn’t you release a limited amount of trading data? If they published such data, it would be fantastic marketing and stop all the naysayers in their tracks. What reason could they have for not publishing it?

Investment Tie-up

Depending on how much you invest, your initial funds are tied up for between 120 to 299 days. By itself, a lock-in period is not my concern. Instead, it’s that your initial investment is locked up for at least 120 days (and that’s only if you invest $10,010 or more).

Consider this:

  • Why is this necessary?
  • Wouldn’t it surely be a better endorsement of the platform if the lock-in period was lower?
  • Why are capital release periods (and extra interest) tied to lending amount?

Some possible answers to these queries might be:

  • It’s necessary for a lock-in period to exist so that there is enough capital from new investors to subsidise the payments of existing investors who have reached the end of the lock-in period.
  • It would be a better endorsement of the platform if the lock-in period was lower. This would likely give existing investors more confidence (possibly leading to higher investments) and encourage trial by new investors (who might have some doubts/concerns).
  • To push people into higher lending categories. Their tiered system lures you into investing more with guaranteed daily returns (in addition to the variable interest) and lower lock-in periods (which, likely, lowers perceived risk). Those who

Affiliate Program

Check out the picture below. This was taken from their website.

What does that look like to you? A pyramid? How strange!

Anyway, whenever someone uses a referral link which you’ve provided them, you earn 7% of whatever they lend to BitConnect. And if those people refer someone who then lends on the platform, you earn commission through them (but slightly less). This goes on and on (as you can see above).

Affiliate programs, by themselves, aren’t a bad thing. They incentivise existing users to spread information about products/services and can be a cheap and effective customer acquisition method. PayPal had a long-running and successful affiliate program to increase new user uptake. Coinbase currently has an affiliate program too.

However, the model employed by BitConnect is lucrative enough that it could be encouraging negative behaviour. For instance:

  • Videos on YouTube advertising the returns generated through BitConnect might become one-sided. They might ignore or dismiss information which might make their viewers sceptical of the platform (and thus, reduce referrals).
  • As the reward is percentage based, it might also incentivise content creators to advocate higher investment.

In short, ask yourself this: what behaviour does this program encourage? Where do the motivations of recommendations lie? Is that a good thing?

“But look at all this money people are making!”

No doubt some people have made, and will continue to make, a lot of money through BitConnect. However, it’s false to imply that the success of the platform until now absolves it of its design and lack of transparency. Just because someone else has cashed out of this platform successfully, does not mean it isn’t a scheme. In the Boxmining video, he says that “you can’t prove it’s a pyramid scheme until it falls apart”. In other words, this could be successful for some time to come and we won’t be able to prove that it is a scam until it bursts into flames. However, while we can’t prove this is a scheme, we can point to some worrying signs in the platform’s design that suggests it is.

Perhaps BitConnect is set up to work something like this:

  • Attract initial investors with the lure of high daily returns.
  • Subsidise the withdrawals of capital/returns (i.e., realised gains) of initial investors through:
    • Themselves (i.e., initial working capital).
    • Existing investors who have not withdrawn capital or returns (i.e., re-invested).
    • New investors who are still locked-in.
  •  Encourage adoption of the platform by new users via:
    • Proof that the platform ‘works’ (through users who have withdrawn capital/returns).
    • A percentage based referral system, which operates directly and indirectly.

In essence, as long as this system can continue to subsidise pay-outs to existing users through increased adoption, there’s no reason that BitConnect would fall apart. However, if either (or a combination of)

  • A larger amount of capital exits circulation (via withdrawals).
  • A lower amount of capital enters circulation from new or existing users.

Then it would blow up – very quickly.

Before that happens though, you might be able to make a lot of money. But the reality of how you are making money through BitConnect is probably different than is advertised.

“Should I invest anything into BitConnect?”

I’m not a financial advisor and I don’t pretend to be. I’ve laid out the facts and my concerns regarding BitConnect. Personally, I am investing nothing into this and will not be recommending anyone to it. Unless you know something I don’t (and if you do, please share!), I would recommend you stay away too.

Why did you bother writing this?

I like cryptocurrency and the blockchain. BitConnect’s presence in the top 15 (by market capitalisation) of all cryptocurrencies is worrying, as this lends it credibility – where, as I hope I’ve shown – it doesn’t deserve. I would rather have written something else entirely. However, all the positive reviews of BitConnect motivated me to add my voice to the naysayers and maybe get other people asking the same questions I have.

Want more?

BitConnect CLOSED its lending platform on the 16th January 2017. Check out my recent post if you’d like to read about what happened, why it happened, and the aftermath.

YouTube Reviews of BitConnect

BITCONNECT | An honest review

Review by DataDash. Makes observations that:

  • The website isn’t clear about the purpose of BitConnect, or how it works.
  • Promotional video (see here) uses premade animation software (i.e., they haven’t bothered to hire animation artists to promote their coin).
  • No proof that the trading bot actually exists (i.e., BitConnect have never released the trade history of the trading bot).
  • BitConnect coin is being used as an asset, not a currency.
  • It promises guaranteed income.

Is Bitconnect a Scam?

Review by BoxMining. Makes observations that:

  • Basic proposal of BitConnect is that you lend your Bitcoin and get “massive” returns each year.
  • Even after research, admits that he still doesn’t understand BitConnect.
    • Who is the money being lent to?
    • There’s no evidence of this trading bot
  •  Once lent out, the money is locked up for a long time (see here).
  • Exposing yourself to a lot of (unknown) risk.
  • “you can’t prove it’s a pyramid scheme until it falls apart”

Bitconnect scam alert! Is this 800 million dollar cryptocurrency a ponzi scheme?

David Hay starts his review of BitConnect by offering a $1000 bounty to anyone that can prove that the trading bot is doing what it says its doing. Makes observations that:

  • After doing more research, has become increasingly worried about it.
  • USP: a trading bot that pays returns (variable) each day – which compounds.
  • If they do have this trading bot, there are better routes for raising capital than establishing a cryptocurrency.
  • Basic proof that this trading bot works as they claim would be enough to displace scepticism.
  • Strongest source of growth is through the affiliate program.
  • Tie up your money for a long time.



  1. RationalOne 17th January 2018
  2. Knowledge One 12th January 2018
    • Warlock 18th January 2018
      • Penguin 18th January 2018
  3. Martin 7th January 2018
  4. Hugh 25th December 2017
    • Penguin 28th December 2017
  5. A. Nketia 17th December 2017
    • Penguin 21st December 2017
  6. durable 19th November 2017
  7. Andre 3rd November 2017
    • Penguin 9th November 2017
  8. crypto.rendered 17th October 2017
  9. PKaurK 9th October 2017

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