Bitconnect and the Importance of Trust in the Cryptocommunity

Bitconnect was the first and largest Bitcoin investment platform. They allowed anonymous peer-to-peer lending of cryptocurrencies. The platform offered very high returns on lending the value of Bitcoin in their native token Bitconnect coin.  They promised returns of over 40% per month and the original investment back after a period of 299 days.

With such an attractive offer, many in the crypto-community were split over Bitconnect. Many popular Youtube “Cryptocurrency analysts” promoted Bitconnect and even offered referral codes for even better returns on lending. However, some larger figureheads in the industry have warned against it. Both Ethereum’s founder, Vitalik Buterin and Litecoin’s founder, Charlie Lee have warned others against the platform.

“I've been asked what I think about BitConnect. From the surface, seems like a classic ponzi scheme. I wouldn't invest in it and wouldn't recommend anyone else to. I follow this rule of thumb: If it looks like a duck, walks like a duck, and quacks like a duck, then it's a ponzi."

Charlie Lee said to his followers on twitter.

Total Meltdown

Earlier today, Bitconnect’s native token’s price has been in total freefall. Its value has plummeted from roughly $360 to $20. They have also officially closed their lending platform and cryptocurrency exchange. To make matters even worse, Bitconnect have also changed the privacy of their official Reddit group and are not allowing new members in without contacting the moderators.

For better or worse, the Bitconnect team have not halted or stopped their new ICO (initial coin offering) BitconnectX which launched just a week ago. Their ICO is bound to fail its fundraising goal following the collapse of Bitconnect.

Consumer Trust and Why It Matters

Bitconnect and its ICO BitconnectX are likely never to recover from its decline. Consumer faith in their team, project, and mission have collapsed.

Many innocent investors have lost large sums of money by investing into something too good to be true. Many of the Youtubers who have embraced and recommended Bitconnect to their fans and followers are deleting their videos where they’ve showered praise on the project. Now those same Youtubers are issuing grovelling apologies.

Once you’ve betrayed your audience’s trust, it is likely to never return.