CryptoArb Shut Down by US Government

The CryptoArb Arbitrage Investment Plans.

In our “First Thoughts” Article about CryptoArb (that you can read here), we pointed out that the company is unique in that it offers TWO groups of investment plans so that it essentially acts like two HYIPs rolled into one.  One group of plans is devoted to the cryptocurrency arbitrage investment activities of the company while the other group is devoted to the company’s mining activities.  In this first part of the CryptoArb Review, we will talk about the arbitrage investment plans.

In our “First Thoughts” article we summarized the arbitrage investment plans as follows:

In the way of an overview, there are five investment plans in the arbitrage group.  All of them return your investment at the end of the plan.  The length of the plans run from 30 days up to 90 days.  The minimum investment for the lowest interest plan is 25% while the minimum investment for the highest interest plan is $5,000.  The daily earnings that you receive depend on the profits that the company generates on a daily basis.  The lowest interest, and shortest term, plan pays you 50% of the company’s profits for the day while the highest interest, and longest term, plan pays you 90% of the company’s profits for the day.  For example, if the company earns 2% profit for the day, for the lowest interest plan you would receive 50% of this or 1% or your investment as earnings for that day.  There are two examples given in the website.  One uses a profit of 1% and the other uses a profit of 1.5%.  Based on this very limited information, the investor must estimate what his earnings might be.  The arbitrage plans all return your investment at the end of the plan.  Finally, compounding is offered.  So, in the extreme, the adventuresome investor could compound all is earnings and, when the plan ends, he would have his greatly increased investment returned to him.

Here’s the information that the website gives on these five investment plans:

Starter
50% of profits for 30 days
$25 – $500

Beginner
60% of profits for 40 days
$501 – $1,000

Basic
70% of profits for 50 days
$1.001 – $2,500

Advanced
80% of profits for 60 days
$2,501 -$5,000

Pro
90% of profits for 90 days
$5,001 – $25,000

Analysis of the CryptoArb Arbitrage Investment Plans.

In reviewing the CryptoArb website, I couldn’t find detailed information on what level of profit the company expects to earn on a daily basis.  This is vital information for the investor as his earnings are tied to the company’s profit.  All I could find were two examples on the “Investor” page that give possible profit levels.  One example suggests a daily profit of 1% and the other suggests a daily profit of 1.5%.  Which one is correct to use?  Is either of them correct?  Lacking more information, it is impossible to answer these questions.  Just so that we have something to work with, let’s use 1.5%, the higher of the two (which might make the arbitrage plans appear to be more profitable than they really are).  So, we must keep in mind that this is nothing more than an educated guess.

However, it is now possible to come up with daily percent earnings for each of the five investment plans.  For example, for the Starter plan, you would earn 50% of the company’s 1.5% daily profit or 0.75% (.5 x 1.5) per day.  If you do the same arithmetic for the other four plans, you get the following results:

Starter.   0.75%
Beginner.  0.90%
Basic.  1.05%
Advanced.  1.20%
Pro.  1.35%

Again, it is important to remember that these numbers could be way off as they are based on a big assumption — a “guesstimate.”  However, even if our results are off somewhat, it will still be very educational to get a feel for the pros and cons of these investment plans.

Recalling from the First Thoughts article that your investment is returned to you at the end of these investment plans, this means that the daily interest that you earn will be profit — assuming that the program doesn’t close before the end of the plan you invested your money in.  Daily profit is the same as daily net interest (DNI) the term we use to determine the profitability of an investment plan as well as the probability that the program will be a long-term survivor.  So, the preceding listing of interests that the various investment plans pay is also a listing of their DNIs.

Now let’s determine how long it takes each of these plans to break even.  This is easy to do.  You simply divide 100% by the daily interest that you receive.  For the Starter plan, you divide 100% by 0.75% to get around 134 days.  Since the plan is only 30 days long, you will break even when the plan ends and your investment is returned to you.  At the end of 30 days when the plan ends, you would have recovered 22.5% of your investment (30 x .75).  The same situation occurs with the next three investment plans; none of them break even before the end of the plan.  Here are the results for the first four plans

Plan                 Percent of investment recovered by end of plan
Starter             22.5%
Beginner         36.0%
Basic                52.5%
Advanced        72.0%

Only the Pro plan will break even before the plan ends.  Dividing 100% by 1.35%, the daily interest received, you get that the plan will break even in around 74 days.  The plan is 90 days long.  So, for the last 16 days of the plan, your earnings are pure profit.

Discussion.

First of all, let’s take a look at the minimum investment requirements for these investment plans.  The third plan, the Basic plan, with a minimum of $1,001, might not have many takers.  The fourth plan, the Advanced plan, with a minimum of $2,501, will have even less.  The fifth plan, the Pro plan, with a minimum investment of $5,001, might have close to zero.  The point is that most online investors will probably make use of the first two or three investment plans.  The DNIs for these three plans are 0.75%, 0.90%, and 1.05%.

In the article in HYIP Insights #12, we suggested that programs having investment plans with DNIs less than 1% would have a better than average chance of long term survival.  So, from the point of view of survivability, CryptoArb  would appear to be in fairly good shape.

What about profitability?  Let’s multiply these DNIs by seven to calculate an average weekly profit for each of these three investment plans that will primarily be used.  Multiplying 0.75% for the Starter plan by seven we get 5.25%.  Doing the same arithmetic for the other two DNIs, we have:

Starter             5.25%
Beginner         6.30%
Basic                7.35%

In the article in HYIP Insights #23, we suggested that weekly profits of between 5% and 10% might be sensible to aim for in an HYIP.  So, from the point of profitability, the CryptoArb investment plans also appear to be in good shape as well.

A factor against the three investment plans that we are now focusing on is that you do not break even until your investment is returned to you when the plans end.  As we already determined, the Starter plan, which is the lowest interest plan, only returns 22.5% of your investment in the 30-day plan period.  So, you will be biting your nails as you wait for the plan to end so that you can recover the rest of your investment as well as make a profit.  The second and third plans are somewhat better but there will still be some nail biting as the investor waits for his plan to end.  These plans are 40 and 50 days long compared to the 30-day length of the Starter plan.

Conclusions.

Based on an assumed profit by CryptoArb, it appears that the arbitrage investment plans offer a sensible level of profit that is within a range such that the program would seem to have a good chance of being a long-term survivor.  A factor against these plans is that, with the exception of the highest interest plan (which probably will not be used), the investor will not break even until the plan ends.

In the First Thoughts article, we noted that it is possible to use compounding to increase the amount of your investment that earns interest.  In Part 2 of this Review, we will review a few things about compounding and then discuss how they apply to this program.  Stay tuned.

I hope this information is helpful to you.

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