Sure, a lot of altcoins are trading spectacularly well today – but this situation is different. Bitconnect (BCC) is absolutely soaring at the time of writing this blog post. Compared to their price 24 hours ago, each Bitconnect coin is trading a whopping 103% higher right now. It’s an unexpected surge, especially after the company dropped a massive bomb two days ago that caused this coin’s price to plummet:
What news caused such a drastic cliff dive? Bitconnect is shutting down its lending program, which has been ruthlessly compared to a Ponzi scheme for a while now. In fact, that’s part of the reason it is deciding to close down its lending operation. Apart from that, it will also be shutting down its exchange.
But, despite such massive decisions, the actual Bitconnect coin will remain in existence. It can still be traded, as well as be used as a store of value. Now, however, it doesn’t have that Ponzi-scheme flavor that made it so special before. The exchange won’t shut down for a few more days.
Regardless, investors are clearly clamoring to get their hands on more BCC.
Why was the Bitconnect Coin Lending Deal So Scandalous?
The way that the lending program worked was this: people would buy BCC with Bitcoin (BTC), that’s pretty much it. It would promise daily returns for “lending” them Bitcoin. All the while, Bitconnect coins were fully tradable.
It was compared to a Ponzi scheme because the more you lent, the more you got paid in daily returns.
Why did they shut down the system? Partly because they were getting bullied about their business model. There were other reasons, outlined by Bitconnect:
- The continuous bad press has made community members uneasy and created a lack of confidence in the platform.
- We have received two Cease and Desist letters, one from the Texas State Securities Board, and one from the North Carolina Secretary of State Securities Division. These actions have become a hindrance for the legal continuation of the platform.
- Outside forces have performed DDos attacks on platform several times and have made it clear that these will continue. These interruptions in service have made the platform unstable and have created more panic inside the community.
Can Bitconnect (BCC) Stay Relevant?
After shutting down the part of it that made it so famous, do you think that the Bitconnect coin will remain a strong cryptocurrency? I guess anything can happen. Just think about today’s surge – nobody would have thought that BCC coins would be double their value yesterday if you had asked 36 hours ago.
Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.