We recently published a “First Thoughts” article on BtcRush in which we pointed out that the company offers a single investment plan. The plan is simple to understand and pays a daily interest of 4.1% of your deposit — forever. It is an example of what we call a “perpetual” investment plan; you will continue to receive interest payments until the program closes or until you decide to withdraw your deposit.
But, this is the BIG difference between this investment plan and “perpetual” investment plans offered by many other HYIPs. Typically, you cannot withdraw your deposit or, if you can, there is a significant penalty for doing so. In the case of BtcRush, there is only a 5% penalty, which I don’t think will deter anyone from withdrawing. So, In the case of BtcRush, I suspect that an investor would probably leave his deposit in place until he gets nervous about the survivability of the program, at which time he would withdraw it. So, this is an interesting investment plan from the point of view that it can be taken as a perpetual plan OR as one that returns your deposit.
As I think about this a bit more, it hits me that this investment plan is really the SAME as a plan that runs for a set amount of days and then returns your deposit at the end of it. The difference is that, in this case, YOU determine the length of the investment plan. The trick, of course, is to determine this length of time such that you can withdraw your deposit BEFORE the program closes. This, of course, is similar to what you experience when you invest in a plan where its duration is specified beforehand; you hope the program will survive long enough for you to get your deposit returned. This is the thinking that we should keep in mind as we evaluate the profitability of this investment plan.
For an investment plan that returns your principal at the end of it, profitability is extremely simple to determine. For example, let’s assume that we invest in the BtcRush investment plan and then withdraw our deposit after 30 days. Also assuming that the program doesn’t close before the end of the 30-day period, the 4.1% daily interest that it pays will be NET interest — daily net interest or DNI. A DNI of 4.1% is quite high — it’s equivalent to a profit of almost 30% per week — and it’s doubtful if any program can sustain this level of payout for a long time. If, on the other hand, the program closes right before the end of the 30-day period so that you don’t get your deposit back, your earnings up to that point would NOT be NET interest as you now have to recover your deposit. So, in the 30-day period, you would have earned a total GROSS interest of 123% (30 x 4.1). Subtracting 100% from this, your total NET interest would be 23%. Finally, dividing this by the 30-day period, your daily net interest or DNI, would be around 0.77%. You would still be coming out ahead, but obviously not as far ahead as you would if you got your deposit back. How long does the program have to survive in order for you to come out ahead (break even)? That’s easy to determine. Just divide 100% by the 4.1% daily return to get around 25 days.
To sum all this up, the BtcRush investment plan will break even in 25 days. After that, anything that you earn will be pure profit. If, for example, the program survives for 30 days and you withdraw your deposit at that time, you would have earned an average profit of 4.1% per day — which is quite a lot. If, on the other hand, the program closed right before the end of the 30-day period so that you could not have your deposit returned, you would only earn an average of around 0.77% profit per day. So, obviously, everything hinges on when the program closes.
And, of course, this is only one possible scenario. We could also have worked this out for longer periods of survival of the program. The result will always be that, if you withdraw your deposit before the program closes, your daily net interest (DNI) will be 4.1% (which, still again, is very high). If the program closes before you can have your deposit returned, the DNI that you earn will be much less. However, the longer the program survives, the larger this DNI will be. Just as we calculated 0.77% for the effective DNI for a 30-day survival period of the program, we could do the same arithmetic and determine the DNI for other longer survival periods. Here is what the results of this calculation would look like:
DNI for Different Survival Periods
Looking at these numbers, you can see that your effective daily profit increases very quickly if the program survives for two or three months — even if you lose your deposit. Of course, if you withdraw your deposit before the program closes, your daily profit will be 4.1%.
Investment with any HYIP usually boils down to the same decision. Leaving your money in place for a long period of time increases your chances of large profits but comes with a greater risk. Withdrawing your money more quickly decreases your profit potential but lowers your risk.
This is why we refer to investing in an HYIP as a “Game,” a gambling type of game…
The BtcRush investment plan offers an unusual incentive in an attempt to get a person to invest larger amounts of money. Normally, interest earnings are posted every TEN minutes. If you invest over $50, your earnings will be posted every FIVE minutes and, if you invest over $125, your earnings will be posted every ONE minute. Well, this is kind of silly if you take a look at the quantities of money that are involved. Let’s assume that we invest $125 in this program. At 4.1% daily interest, the gross daily interest would be $5.125 per day. If you divide this by 24, you get the hourly return which would be $0.2135. If you divide this by six, you get the NORMAL ten-minute return for BtcRush which would be $0.03559 (around FOUR CENTS!). If you divide this by two you get the five-minute return which would be around $0.01780 (less than TWO CENTS!). Finally, if you really did invest $125, your interest earnings would be posted every minute in the amount of $0.003559 (LESS THAN ONE CENT!). Isn’t this kind of silly? Posting an amount of less that a dollar every hour is even kind of silly. This is a whole crazy new ballgame that I have never heard of before. An investor’s account page will be completely clogged with entries of these nonsense one-minute accruals. There are 1,440 minutes in one day. That will be a LOT of entries in a person’s account. I hope that BtcRush will realize how silly this is and change the procedure. Or, do I have it wrong??
Perhaps this is enough about BtcRush. In summary, the investment plan that the program offers is very profitable, but it is also risky because it is questionable whether ANY company can sustain interest payments at the rate they advertise on a long-term basis. From the point of view of the investor, a strong point about this investment plan is that you can withdraw your deposit at any time with only a 5% penalty. So, it is possible for the cautious investor to “get in and get out” of the program with a handsome profit in reasonable safety.
I hope that some of this information is helpful to you. Good Luck!
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