DON'T BELIEVE THE HYPEMAN

Bitconnect wasn’t the first crypto ponzi – that honour goes to Bitcoin Savings & Trust which collapsed in 2012 – but Bitconnect was bigger in almost every respect. For the mainstream investors who’d just gotten into crypto during the 2017 bull run, Bitconnect was their first experience of the great gains – and total losses – that ponzis produce.

Had any of those investing in Bitconnect bothered to study previous ponzis, they’d have spotted the red flags: a vague “lending program”; high compounding interest; a pyramid-like referral scheme; a magical trading bot; a black-box “money-printing” platform. Indeed, many did spot these signs and gave Bitconnect a hard swerve, but trying to convince those who’d already invested to get out while they still could was an impossible task. They were making money, after all, and Bitconnect appeared to be ticking over nicely.

The platform promised potential profits of up to 40% per month, with some promotional materials even suggesting a 1% daily compounded interest rate. This would turn a $1,000 investment into a staggering $50 million in three years. Those who threw caution to the wind and went in on Bitconnect didn’t necessarily believe they would become millionaires. But at the very least, they saw the potential to make easy money as the entire market moved up.

Wassa Wassa

At the heart of Bitconnect's rise through 2017 was the shilling undertaken by its army of social media influencers, all of whom stood to gain by sharing their ref links that were embedded into the pyramid scheme. And none has become more famous than the figure of Carlos Matos, whose conference performance has come to embody the high comedy and high risk of the Bitconnect debacle.

In October 2017, at the height of its power, Bitconnect held its first and only annual awards ceremony in Thailand. The event was a lavish spectacle of self-congratulation, designed to project an image of unassailable success. Top promoters were awarded luxury cars on stage and the atmosphere was one of euphoric celebration. Onto this stage walked simple New York investor Carlos Matos.

Having turned an initial investment of $25,000 into a paper fortune of over $125,000, Matos was feeling cocky. He strode onto the stage and delivered a wildly energetic speech that was to become the stuff of internet legend. The apotheosis came at the very start when Matos greeted the crowd with the consummate showmanship of a slick hypeman.

“Hey, hey, hey... Wassa wassa wassa wassuuuuup... BITCONNEEEEEEECT!” It was peak comedy coupled with peak ponzi and the internet was not about to forget. This was car crash viewing, and the crash was not long in coming. In January 2018, Bitconnect suddenly collapsed and its native token plummeted by more than 92% in a matter of hours, wiping out billions of dollars in market capitalization. 

Investors who had been paper rich were left penniless. Even the ebullient Carlos Matos lost the spring in his step as his gains evaporated and his wife subsequently left him. In his immortal conference address, he’d derided the detractors who pointed at Bitconnect and cried “That’s a scam!”

The detractors were vindicated. When Bitconnect’s house of cards collapsed, the only thing to survive the wreckage was the image of a bald man clutching a microphone to his lips. Wassa wassa indeed.

If there was a silver lining to all this, it was that Bitconnect’s implosion reaffirmed the sanctity of the digital currency whose prefix it had nicked – Bitcoin was still as sound and verifiable as ever, and many of those who’d abandoned it in the pursuit of greater gains elsewhere were destined to come crawling back, ruing their hubris.