The BitAeon Investment Plan.

In our “First Thoughts” article about BitAeon, we provided a little bit of information about the company and also summarized its single investment plan in the following way:

BitAeon offers only one investment plan.  For the investor, this simplifies things a great deal.  It’s what we refer to as a “perpetual” investment plan, which means simply that you invest once and you earn forever — like a standard bank account (but with a MUCH higher interest rate).  The interest rate is 3% on business days and 1.5% on weekends.  The minimum deposit is .005 BTC — around $30 — and it looks like the sky is the limit on the other end.  Unlike many online investment plans, you can back out of the program at any time (after the first 24 hours).  Or, you can withdraw a portion of your deposit.  However, there is a 10% penalty if you do this.  To sweeten the pot — and add a bit more risk for the adventuresome investor — compounding is available (up to 100%).  However, it looks like additions to your principal due to compounding cannot be withdrawn and this is something that I will verify one way of the other when we review the program.  The review will be available in a few days.  Please stand by…

Concerning the question of whether or not funds added to an investor’s initial deposit can be withdrawn, I contacted BitAeon’s customer service and was pleased to receive the following response:

If you add funds to your active deposit by enabling compounding you can return all of your funds (total deposit) at any time.

This has serious (beneficial) implications for the adventuresome investor and we’ll get to that later on in the “Discussion” part of this review.

Analysis of the BitAeon Investment Plan.

The BitAeon plan pays 3% interest on weekdays and half that, 1.5%, on weekends.  This make sense as this is more apt to correspond to when the company receives its own revenue.  However, to simplify our own arithmetic, let’s combine these two numbers and come up with an average daily return.  The total weekly interest earned from this plan will be five times 3% and two times 1.5%, a total of 18%.  Dividing this by seven, the number of days in a week, we get an average daily interest of around 2.57%.  This type of simplification is very useful in analyzing an HYIP investment plan.  Remember, we are looking at the big picture.  As the saying goes, “don’t lose sight of the forest because of the trees.”

OK, with this kind of average return, how long will it take the investor to break even?  That’s easy to determine.  Just divide 100% by 2.57% to get around 39 days, around five weeks.

The other thing we determine when analyzing an investment plan is the average daily net interest (DNI) you receive from it.  You know that at the beginning of an investment plan you aren’t making anything but, rather, are biting your nails waiting to break even.  However, after breaking even, your earnings are pure profit.  DNI averages this out over the entire length of an investment plan.  Obviously, with a “perpetual” plan such as this, we have a problem as we don’t know how long the program will last!  The longer it lasts, the higher the DNI will be.  If the program should close in a matter or weeks, it could be a big fat zero.

So, the best we can do is to assume a lifetime for the program.  We’ll make four assumptions, three, six, nine, and twelve months.  Let’s see what the DNI comes out to be in each of these cases.  For three months, or 90 days, the total gross interest that you will earn is 90 times the average daily gross interest of 2.57% or around 213%.  Subtracting 100% from this to account for the fact that it includes your deposit, you come up with a total net interest of 113%.  Finally, dividing this by the assumed 90-day investment period, your daily net interest will be around 1.26%.  If you do the same arithmetic for the other assumed lengths of the plan, you would get the following results:

Days                DNI
90                    1.26%
180                  2.01%
270                  2.20%
360                  2.29%

The longer the program survives, the higher the DNI will become, the limit being the 2.57% gross daily return that the investment plan pays.  I’m not going to bother to try to figure out how long it will take for you to get to that point.  Perhaps, to put round numbers on all this, you should note that you will be making an average of over 2% profit per day after six months.  In ball park figures, that comes to around 15% per week and up — which is pretty good!

It is also important to remember that, in the BitAeon program, you can quit and get a refund at any time (minus a 10% penalty).  So, if, after six months or so, you decide you have had enough, you can always back out and get a refund.

Discussion. 

I believe that a lot of thought was devoted to the numbers behind this program.  First of all, an investor will break even in only a little more than a month.  Compared to many HYIPs, this isn’t a very long period and, although there is never a guarantee, the chances are that the program will survive at least this long — ideally a lot lot longer.

And, what are the chances of it surviving a lot longer?  Here’s where we always take a look at the DNI offered by an investment plan.  In HYIP Insights #12, we suggested that programs offering investment plans with DNIs higher than 2% might have trouble surviving in the long term.  Well, this is only our “suggestion.”  And, 2.57% is not a whole lot higher than 2%.  It is certainly not as high as some of the DNIs we have uncovered for investment plans in other HYIPs we have reviewed which can be 5%, 10%, and even much much higher.  The point is that, with wise management practices, the administrators of this program might be able to make it work and that investors could come out way ahead.

This investment plan also permits compounding!  In HYIP Insights #11, we presented a three-part article entitled “Is Compounding a Miracle or a Monster.”  You can make a LOT of money by compounding your earnings.  But, you can also lose everything.  I have done both!  Please read this article first if you are considering utilizing the compounding feature of this investment plan.  There is too much to be said about it in order to do it justice in a small review article such as this.  If fact, the main reason that we write these HYIP Insights articles is to provide you, the reader, with a reference library that you can go to for further information that we feel is helpful to the HYIP investor.

Conclusions.

BitAeon offers a single “perpetual” investment plan.  It pushes profitability to the limit while not becoming overtly risky — although it will obviously be a riskier program than one paying lower interests.  So, this program might be best suited to the more adventuresome investor.  To spice things up even more, the investment plan offers compounding.  This can further increase profitability, again with increased risk.  A very nice feature of the investment plan is that you can have your entire deposit refunded at any time.  This is rare in the HYIP world.

I hope this information is helpful.

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