The First Great Crypto Ponzi Scheme

Hey hey heeeeeeeeeey. What's-a what's-a what's-a what's-a what's-a what's-a what's-a what's-a what's UP, BITCONNEEEEEEEEEEEECT! Hey hey hey everybody, My name is Carlos Matos and I am coming from New York City, New York! Let me tell you guys that I am SO EXCITED, I am SO HAPPY I am really so thrilled to be right now!

Carlos Matos' iconic speech is familiar anybody that knows cryptocurrency. Bitconnect had many moving parts, but the scam basically boiled down to this - Users would buy BCC with BTC, and then "lend" their BCC to Bitconnect, having been promised a massive return on investment (91% -571% APY, to be precise). As more and more people opted to buy and hold BCC, it's price skyrocketed. BCC rose from an ICO price of $0.17 to a staggering $432.

Then the creators of Bitconnect decided to cash out.

They sold their BCC for a massive profit, flooding every exchange with BCC sell orders. BCC lost 33% of it's value in just one week, at which point Bitconnect announced it was shutting down. BCC price plummeted, and soon after, BCC was removed from most exchanges.

Similarities Between Bitconnect and Crypto.com

Crypto.com is less outrageous, less greedy, and more functional than Bitconnect ever was. However, if it continues to follow in Bitconnect's footsteps, it is destined to implode. Let's take a look at what Crypto.com offers:

• 8% APR on deposited Cryptocurrencies(including BTC,ETH and many others)

• 12% APR on deposited stablecoins

• 18% APR on deposited CRO

Crypto.com has opted to use two different coins - CRO and MCO. In seeing how these coins are used, you may begin to see some similarities to Bitconnect. To gain the best APR on your deposits, you must buy and "stake" - or in other words, lend - MCO to Crypto.com. This creates upwards velocity on the MCO token. Additionally, Crypto.com created CRO, which is passed off as a utility token for their credit card service. In reality, this token functions in a very similar manner to BCC - it is a honey trap for investors with more money than sense. After all, who wouldn't jump at the opportunity to receive 18% APR on a token that is doing nothing but gaining value?

If, How, and When it Will Unravel

There is a happy end in sight to supporters of Crypto.com. Crypto.com could easily continue it's transition into a serious competitor in the banking and credit industry. They may slowly decrease their rates on deposited cryptocurrency as they begin to shell out more and more money. They may continue to increase the revenue from their credit card service. But the cynical side of me says that this ending is unlikely.

There is a strong possibility that those on the inside of Crypto.com are sitting on fortunes of CRO and MCO tokens, waiting to dump them the moment that their business model is no longer sustainable.

So to those of you who are considering buying CRO and MCO, be careful. You may be flying to close to the sun.

Thank you for reading this article! This was my first submission to read.cash and it was a blast to write.