The popularity of Bitcoin has increased greatly over the last few years along with its value. This has led to a significant rise in different types of Bitcoin investment programs. One such investment program is called a High Yield Investment Program or HYIP, an investment scheme which promises to offer unusually high returns on an investment by generating revenue from new investments for existing investors. There are several websites that offer 1 to 15 percent return on invested Bitcoin but chances are that not all are legit. If an investor allocates his digital currency holding in an HYIP, then he can expect low to moderate returns. Several investment schemes promise high returns but they may be ponzi scheme. Investors risk losing all their money if they invest in a fake HYIP. This article by CryptStorm News introduces a Bitcoin HYIP and helps investors analyze such investment schemes.
What is a Bitcoin HYIP?
A HYIP is an investment scheme that has existed for decades, also known as a Ponzi scheme or a scheme which promises higher than market returns in a short span of time. A Bitcoin HYIP is one where Bitcoin is used instead of fiat currencies for all transactions involved.
In a HYIP, the operator utilizes the money paid by new investors to provide higher returns to early investors of the program. The aim of such an exuberant payout is to convince probable investors to also allocate their capital. It is said that instead of investing in legitimate businesses, the operator cycles the money until new investors stop coming and the scheme collapses.
Influence of Bitcoin on HYIPs
The biggest advantage Bitcoin provides is its anonymity over fiat currencies. It can be transferred easily and quickly over the internet without any personal contact information. The identity of neither the sender nor receiver is revealed.
Everyone has heard stories of people who bought Bitcoin for a dollar back in 2009 and simply held on to their asset, watched it grow and then sold them off at an higher price. Scammers exploit such stories and promise similar returns to investors. Thousands of online investment schemes popped up in the last few years on Bitcoin and other cryptocurrencies.
Working of Bitcoin HYIPs
In general, all HYIPs have a similar method of operation. The basic process is such that you find a website on the internet which offers great returns on your investment. The investment can be as small as $5 and you don’t need any skills or experience.
The website usually offers many investment packages. An investor only needs to deposit money into their account and it will get compounded. Some HYIPs even offer hourly Return on Investments or ROIs. A 1% ROI per hour means you will get your original investment back in 100 hours or 4 days and in a year that becomes over 8000%. It is not possible for a legitimate business to guarantee such high returns.
They take digital currency holdings of the investor and add it to the scheme which does not exist. The website runs marketing campaigns promising higher than normal returns to lure investors. Investors may see an increase in their account balance in a few hours or days and maybe even withdraw it. They also encourage people to refer new members and offer a kickback of five to ten percent deposit made by a newer member. These websites suddenly disappear from the internet along with all digital currency holdings and any returns you might have supposedly earned.
Earn profit from HYIPs
Even though HYIPs could be high risk investments there is a way to make money off them. It is a high risk high profit scenario. The working period of a HYIP can be divided into three parts. The HYIP is launched and investors start investing. The operator pays the promised percentage on his loss, by paying out of his pocket. Now, the HYIP is getting popular and attracting more investors. The operator gains more profit than the amount he has to pay daily. Since more people have invested, the operator now needs to pay more and also new investments are slowing down. Hence, this is the point of maximum earnings for the operator, so he shuts down the website and runs away.
Accordingly, if one invests very early in an HYIP, there is a chance to make huge profits. But if the timing is off then investors might lose their digital currency holdings. It is recommended that investors realize that their investment will be at risk and they should also check various HYIP monitoring websites which continuously monitor the status of a HYIP. One should also check various factors such as the number of days its been running and if there are regular payouts or not.
How to Avoid Losing Your Money
Most of these HYIPs share some common attributes which can be used to see if they’re legit or fake. They offer zero or limited Information about the management or owner of the company. No contact information is provided, sometimes an email may be given, to which there is no reply. The promised returns are very high, around 5% to 10% every day. There is no information regarding their business plan and there are vague mentions of a mining operation or some sort of trading. They vanish after some weeks or months off the internet without a trace.
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