HYIPs are a simple way to invest bitcoin where you can earn a nice amount of pocket money and it adds up really quickly. In addition, there are lots of them and they are straightforward to use. But, they are not all created equal, and there are a number of pitfalls that can trap new and experienced investors.
All HYIPs are SCAMS – they will all unplug at some time and disappear with your money – do NOT be fooled by any of the promises on the front page. Check websites like badbitcoin.org if you don’t believe me.
Anyway, now that’s out of the way, lets get started in HYIP investing.
WHAT’S A HYIP
A bitcoin HYIP, or High Yield Investment Program is exactly that. The high-yield varies, but can be anywhere from 0.1% per day to over 100% per day. Contrast them to cash deposits which may return 2% per year. Yeah, you can see why they are popular!
They vary quite dramatically in what they say they do to lure investors. This can range from foreign exchange trading, to bitcoin mining, to oil and gas futures. However, what they actually do is quite different – they simply take investors money and stick it in a big pile and then pay these early investors the promised interest from the pile. As more and more investors jump in, the pile continues to grow and when their goal is met they will disappear with the money. Obviously, you lose if you didn’t get out.
This can go wrong for the HYIP administrators as they must cover outgoing interest payments until the incoming investment money grows. If not enough investors put in then they can just disappear without profiting. So, basically, you lose in this scenario as well.
WHY INVEST IN A HYIP?
So, why would we invest bitcoin in scam sites? Because we can. I know, not a good reason but these sites have existed since the Internet and the idea has been around since long before, and they aren’t going anywhere anytime soon. They are also known as Ponzi Schemes, named after Charles Ponzi in the United States in the 1920s, but also date back to the Charles Dickens novel Martin Chuzzlewit from 1844.
All HYIPs can be broadly classified as follows:
- Short-term – around a few days to a few weeks or so and are the highest risk. They pay very high interest but a good rule of thumb is 20-100% per day. These are called short-term not because of the investment term but because of how long they exist for.
- Medium-term – can last from a few weeks to a few months and pay much lower interest than short-term. Interest of 1% to 10% per day is usual. These are a very popular format as they are more user friendly and you can generally get in and get out quickly
- Long-term – can run for 6 months or more depending on the format. Some of these can even last years as they pay the lowest interest and can become stable with enough confident investors
GOLDEN RULES FOR HYIP INVESTING
- Get all the information and make sure you understand it. They are not known for their support or giving back your money if you make a bad decision.
- Set a goal on getting out so you are clear when the pressure is on. It can be as simple as a target return or some other factor such as website traffic, reputation, or level of advertising.
- Get in early – the earlier the better so you can get your returns and move on.
- Keep deposits moderate. It will vary for each HYIP but no more than $50 is a good rule for beginners.
- Withdraw earnings when you can. Make sure you check the minimum withdrawal.
- Assess the site daily. You can do this with numerous HYIP monitors but be aware that many of these are paid by the HYIP to list and report falsely. Check my HYIP monitor for my investments
- MOST IMPORTANTLY – be prepared to lose your money.
The best way to get started with bitcoin HYIPs is to grit your teeth and get some experience under your belt. Bitcoin HYIPs are great because you can invest a tiny amount of money and not be too stressed. A minimum of 100,000 statoshi is pretty standard which is about US$0.50 at the time of writing.
Sometimes all this gets lost or forgotten when you find a HYIP too good to refuse. But, really if you just remember my number one rule of HYIP investing – never invest bitcoin that you can’t afford to lose – then you will be fine.