Bitcoin Price Drops to $315, Experts Talk About Russian Ponzi Schemes

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by Tatsiana Yablonskaya · 3 min read
Bitcoin Price Drops to $315, Experts Talk About Russian Ponzi Schemes
Photo:Live Bitcoin News/Flickr

After the last week’s peak of $500 bitcoin price has fallen by 30%.

It hasn’t been long since bitcoin enthusiasts were happy to see the price reaching its peak of $500 in such international exchanges as OKCoin, BTCC, BitFinex and Bitstamp. However the success turned out to be unstable.

Bitcoin price began to drop to $315 this morning which means practically a 30% decline. It’s necessary to admit that bitcoin has managed to keep to $350 level since its incredible rise last week. Present fluctuations can be caused by various ponzi schemes that appeared over the past few weeks.

Alfred Lin, Corporate Development Associate at OKCoin – the world’s largest bitcoin exchange by trading volume – connects a large number of ponzi schemes with increased activity in the bitcoin market.

He told NewsBTC: “Recently there’s been a ponzi scheme using bitcoin specifically targeting Chinese people. This has fueled a lot of the uptick in bitcoin activity. I suspect the hype of the Ponzi scheme might have been dwindled down causing a slowdown in bitcoin trading activity”.

Although financial experts and Chinese bitcoin exchanges share their cautious attitude to such ponzi schemes as MMM, bitcoin pyramid ponzi scheme of Russian criminal Sergei Mavrodi, and constantly strive to protect their investors from it, MMM is already supporting tens of thousands of Chinese investors on its online platform.

“MMM is a community of people providing each other financial help on the principle of gratuitousness, reciprocity and benevolence,” its website reads. “In MMM you don’t have to make contracts or pledge your property. In MMM there are no lenders and no debtors. Everything is very simple: one participant asks for help — another one helps.”

Remarkably the founder of the company, Sergei Mavrodi, was imprisoned after his previous Ponzi scheme had collapsed.

Bobby Lee, CEO and co-founder of BTCC (formerly BTCChina), warns: “We’ve had reports of dubious “investments” involving bitcoin. These may be ponzi schemes designed to steal your bitcoins. Please be cautious when making any investment decision, and verify the legitimacy of both the investment and anyone making the offers”.

Although 2015 has so far been probably the most stable year for bitcoin, the cryptocurrency is still liable to speculative spikes or manipulation, which, in its turn, questions whether bitcoin is suitable for mainstream. Despite all the doubts bitcoin and blockchain are believed to have a potential to rebuild financial infrastructure in several years. Thus both the digital currency and its underlying technology are considered to be attractive for investment and bitcoin inventor Satoshi Nakamoto was even nominated for the Nobel Memorial Prize in Economic Sciences.

Cryptocurrency News, News
Tatsiana Yablonskaya

Taking strong interest in blockchain, cryptocurrencies, and IoT, Tatsiana Yablonskaya got deep understanding of the emerging techs believing in their potential to drive the future.

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