A few days ago, we published a “First Thoughts” article on BitCy. In it we talked a little about the BitCy company and provided a very brief overview of its investment plans. For your information, I have reprinted this information below.
As you might guess from the name of the program, BitCy is one of the many companies nowadays that are involved with cryptocurrency trading. There appears to be two approaches to this business just as there are in Forex trading. One relies on human judgement; the other is computerized. BitCy is one of the latter and, according to their website, they “have developed and applied fully automated trading systems based on our trading experience, mathematical analysis and innovative software.” I will go along with the computerized approach. No matter how hard one tries, emotions, hunches, etc. always come into play that can lead to an incorrect decision when using your own judgement. Perhaps most important, computerization can permit you to make MANY trades in the time that a single trade would take place using your own judgement. Trades can be entered into quickly and, just as quickly, the exit can be made. It is FAST! So, if you feel this way too, you might want to take a closer look at BitCy…
BitCy offers a total of EIGHT investment plans. That’s a lot — although there certainly have been programs offering more. It seems that the company has tried hard to offer different types of plans in an effort to appeal to different personality types of investors. For example, two of the plans pay daily interest on a calendar day basis and return your principal at the end of the plan. One pays hourly interest and also returns your principal at the end of the plan. The other five are based on business days and pay your earnings at the conclusion of the plan (with your principal included as part of them). The minimum and maximum investments are all given in Bitcoin — which is perfectly OK. Unfortunately, half of the investment plans have minimum investments of one or more Bitcoins and will probably be out of the reach of most investors. If you take a quick look at the investment plans, one should stand out. It offers an astounding 7,000% interest after 100 business days. That’s 70 TIMES your initial investment. Is that really possible?
Now let’s take a closer look at the BitCy investment plans…
Analysis of Investment Plans — Part 1.
The first three of the eight investment plans fall into one group as they all return your investment at the end of the plan. They also pay interest on a calendar day basis. The third of these plans is a bit of an oddball as it pays interest on an hourly basis rather than daily. I can see no use to that at all. Hence, let’s first of all convert the information on that plan — the “Ultimate” plan — to days. The interest rate that is given is 0.13% per hour. Multiplying this by 24, you get the interest paid per day which is 3.12%. The investment term is 1440 hours. Dividing this by 24, you get the number of days which is 60 days. With these changes, here is the summary information for these three plans as given in the website:
2.3%/day for 15 days
0.0050 – 0.2500 BTC
2.6% per day for 25 days
0.2500 – 2.500 BTC
3.12% for 60 days
2.500 – 25.00 BTC
As indicated in the introduction, not too many of the BitCy investment plans will be within the reach of the typical online investor. In this group of three plans, the first one is certainly OK. The second might be doable for a few investors. Remember that, at least right now, one Bitcoin equals around $7,000. So, a quarter Bitcoin is well over $1,000. Not too many HYIP investors will put this much into one program. The third plan with a minimum investment of well over $15,000 will probably not be used at all.
Next let’s quickly check how long it takes the investment plans to break even. You do this by dividing 100% by the percent interest paid daily. For the first plan you get around 44 days (100/2.3). Since the plan is only 15 days long, you will not break even until the end of the plan when your investment is returned. Similarly, for the second plan you would calculate that it breaks even in 39 days (100/2.6) which is still longer than the investment term. In the third plan, however, you would break even in around 32 days (100/3.12) which occurs before the end of the investment term. So, in that case, you will be making pure profit from day 33 to day 60, after which your investment will also be returned. Unfortunately, as we already indicated, the minimum investment for that plan is so high that probably no one will use the plan. The important point in this analysis is that, for the first two plans, you won’t be in profit until your investment is returned at the end of the plan.
In all of these plans, since your principal is returned at the end of the investment term, your daily earnings can be considered as net interest or pure profit IF the program survives till the end of the investment term. Let’s assume that this is the case, which implies that these interest earnings are your daily net interest or DNI for each of the investment plans. In the article in HYIP Insights #12 (that you can read here) we suggested that programs offering investment plans with DNIs higher than 2% might not have a very good chance for long term survivability. Remember that 2% profit per day amounts to nearly 15% profit per week. That’s quite a lot — even in the HYIP business. The lowest DNI for these three programs is in the “Casual” plan and is 2.3%. This is only slightly above the suggested limit of 2% and I suppose that a plan with this level of interest could be a survivor IF other plans offered by the program offer reasonable rates. Well, the two other plans in this group offer higher rates which, from the point of view of overall survivability of the program, is not good news. The only saving factor is that the minimum investments for these two plans are quite high which will minimize the number of customers for which BitCy will have the obligation to pay high earnings to.
Next let’s take a look at the fourth plan offered by BitCy, the “Premium” plan. This plan is truly in a class by itself as we shall soon see. This plan, along with the remainder of the investment plans from BitCy all return your investment as a part of your earnings and all give the investment term in business days rather than calendar days. Finally, they all pay your earnings at the END of the investment term. So, you must wait till an investment plan is over before you receive anything from any of these five plans. In the HYIP world where programs can come and go in a week or two, this makes all of these plans very risky business — unless their term is very short.
As a note, there seems to be no reason for ending the last five plans in the program plans on the basis of the number of business days that have elapsed. If earnings were being paid on a day by day basis, it might make sense to do this. However, since all your earnings are paid at the end of the investment term, there is no logic to it at all. The only reason I can come up with is that, by giving the number of business days, it obscures the fact that the corresponding number of calendar days (which is when you receive your money!) is much much more. So, the first thing we will do for the Premium plan is to determine how many calendar days you will have to wait before you receive your earnings.
Here is the information given on the website for the Premium plan:
7,000% after 100 business days
0.0500 – 5.000 BTC
There are roughly 22 business days in a month. Therefore, 100 business days is roughly equal to 4.55 months (100/22). Then, taking a month to be 30 days long, the number of calendar days in this investment plan will be around 136 days (4.55 x 30). Four and a half months is a VERY long time in the HYIP game!
But, let’s continue our analysis of this investment plan. Since your deposit is included in your return, you must subtract 100% from the gross return of 7,000% to get a total net return of 6,900%. Distributing this over the 136-day investment term, you come up with an effective daily net interest (DNI) of 51%. Of course, compared to the 2% that we recommend as being a sustainable return, 51% is WAY off the chart. To put this into simple understandable terms, this means that, if, for example, you invest $2,000 in this plan, you will receive around 50% (half) of this — $1,000 — in interest every day for the next 136 days. The catch is that ALL these earnings are saved for you and given to you as a lump sum at the END of the 136-day period. My bet is that the program will close long before the 136 days are up. However, I would love to have the folks at BitCy prove me wrong on this.
In HYIP Insights #14 (you can read it here) we discussed this type of investment plan. The point of the article is that the plan is a trick to attract investors by means of a high interest rate. Then the long term for the plan gives the project admin time to close the program and run away with the treasury before he pays any earnings to these unwary investors. I really hate to see this type of investment plan. My sincere recommendation would be that BitCy should change it to bring it into the world of feasibility.
It is worth noting that the minimum investment for this plan is probably doable for a decent number of HYIP investors. 0.0500 BTC translates to between $300 and $400. This should be feasible for the “serious” investor.
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