In late December 2016, the company launched an initial coin offering (ICO) to enter the cryptocurrency market. On CoinMarketCap, it quickly established itself as one of the best-performing currencies of 2017. BitConnect reached a market capitalization of over $2.6 billion and a value of over $400 during its peak.
BitConnect followed a four-tiered system. You will earn guaranteed returns of up to 40% per month, depending on the size of your initial deposit. The more money you invest, the bigger and faster your returns will be.
Regardless of the stake, investors were guaranteed a daily return of investment (ROI) of one percent. The firm had created its own “trading bot and volatility programme” in-house. This software was supposed to be crucial in turning Bitcoin into a fortune.
Bitconnect Coin was among the top 20 most successful cryptocurrency tokens in the world in 2017. BCC reached an all-time high of US$463 in December 2017 after rising from a post-ICO price of $0.17. As of March 2019, it had dropped to US$0.40.
Even one of the top 20 most successful cryptocurrencies collapsed. What caused that to happen?
What should one consider before making an investment in cryptocurrency?
Also Read: The Strange Case of Onecoin, the World’s Biggest Crypto Scam
1. Never invest more than you can afford to lose
It’s not uncommon in crypto for a $100 investment to rise to $10000 one day and drop to pennies the next. There have been a number of examples, including the Squid Game. The squid game coin has a fascinating backstory. Let’s imagine you put $100 at $1 value on October 28, 2021. By October 31, it reached an all-time high of $2861. In less than four days, your $100 turned approximately $0.3 million. But, Its value dropped to pennies by November 1st. However, there are several examples, like Bitcoin and Doge coin, that have provided tremendous returns to their first investors. We must recognise that the market is extremely volatile, and we must exercise extreme caution before investing.
2. Beware of coins with high rewards.
Be wary of anyone offering 100x gains in a short amount of time or a coin that is postponing the opportunity to sell the coin. There are clearly cases where an early investor invests in a new coin and sees its value skyrocket, yielding huge profits.
Everyone wants to make a lot of money, and crypto may be able to fulfil that dream. The greatest method for investors is to get their money back as soon as possible. Then, if the coin yields an exponential return, that’s fantastic. And if it does fall, it isn’t a problem.
The return on investment can be repurposed for future ventures. You can’t win with every coin, and you can’t lose with every coin, either.
3. Always Do your own research
Whenever a new cryptocurrency is released, a lot of excitement is generated. To attract new investors, aggressive marketing techniques are employed. Bots or professional shillers are also used. A large number of bogus reviews are also created.
The rise of Bitcoin has been witnessed by all. Nobody wants to be the one who misses the next Bitcoin. FOMO (fear of missing out) is a regular occurrence in new cryptocurrency launches. They fall victim to these lucrative dreams. It’s possible that this might lead to irrational decisions. After a lot of excitement, if a coin can’t keep up with the hype, it becomes a pump and dump coin.
4. Beware of Scammers
Scammers exist in the cryptocurrency world. These scammers may or may not be connected to the projects in which you have invested. One typical fraud involves scammers impersonating Telegram group moderators and interacting with you. They will eventually try to extort money from you in order to answer your questions. Always double-check the impersonators with the legitimate group’s moderators.
5. Do not share your Keys:
Keep the secret key phrase in a safe place at all times. Preferably, write them down on a piece of paper and put it somewhere safe. Consider writing it down on many pieces of paper for added security. Private keys enables you to access the crypto. You will lose access to your crypto if you misplace it. Equally crucial is the fact that anyone with your key can access and steal your crypto.
How to avoid potential scams?
1. Careful examination of the Coins before investment:
It is extremely difficult to verify an individual’s identity on the internet. There are a lot of imposters. On social networking websites, any scammer can build a phoney profile. They can create a cryptocurrency in which they might claim the identity of others. If anything regarding the identity of the crypto developers or founders appears questionable, don’t invest in that coin. Investors should always read the Whitepaper, look at the social media accounts, and learn as much as they can about the founders. Always keep an eye out for bots in Telegram or Discord groups. An account with too many bots seems fishy. A well-written whitepaper could be a sign of a smart investment.
2. Do not be influenced by social media reviews
The project owners usually ask participants to shill the projects before the ICOs or before beginning new activity in the Roadmap of the coins. To earn points, participants usually share relevant information about the project on Twitter or other social media platforms, as well as comment on some of the posts. But why do people participate in the activity of these projects? Because the points earned can be used to earn free coins or NFTs. These free reviews enable projects to share their work without much effort. It is recommended that you do not become trapped as a result of these reviews. Instead, try to learn as much as you can about the projects before investing.
3. Beware of High Returns:
Bad actors frequently entice new investors by promising safe, lucrative, and guaranteed returns in a short period of time. This could be accomplished in hours or days rather than months or years. This could be a trap. It could lead to fraud. All investments involve some level of risk, and the potential profits are typically directly proportional to the level of risk.
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