In a previous post we seen that the only drawback using Bitcoin for HYIP investments is related to the volatility rate of this digital currency.

In this article we try to imagine what would be the impact for a HYIP program by strong growth or a sharp depreciation of BTC against Euro or US Dollar.

When you make a deposit in HYIP using BTC, you can have three different operating modes of the script:

The HYIP does not make the deposit conversion to Bitcoin
There is no currency conversion of the deposit made, in this case there are no effects related to the possible devaluation or revaluation of BTC.

The HYIP always uses a specific conversion value
This mode converts to a value of BTC always at the same rate, regardless of the fluctuation. For each transaction in USD you will always receive the same fixed amount of Bitcoin.

Using the current exchange rate
With this method the script calculates the Bitcoin value of what you would receive in USD by multiplying the amount with the instantaneous charge rate (usually live BlockChain Rate) when the transaction takes place. So you can get more or less BTC dependently on the exchange rate at that time.

Effects of currency fluctuations in the BTC

For programs that use the first 2 methods, fluctuations Bitcoin rates have no effect on the cash flow BTC since the amount of payment in Bitcoin will always remain the same.

We can expect the consequences arising from fluctuations when the program uses the third method described above.

Let’s start by saying that a good Hyip Admin goes to make up the portfolios linked to each processor used by the program and on each of these portfolios will flow deposits and will be picked up the withdraw. So we will have the wallet PM, the PAYEER and also one for deposits and withdrawals in BTC.

Now suppose that an investor deposits 2 BTC in the program, at the time you apply a USD / BTC rate of 1: 500, so $ 1,000 will be credited to the investor’s account.

Always hypothetically, suppose the HYIP provides for a 5% daily payment schedule for 30 days.

At this point you can present two scenarios:

  • Scenario 1: The value of the BTC compared to USD increases, for example, we assume that for 1 BTC are needed 600 USD. To pay the prescribed interest rate of 5% per day, ie 50 USD you will have to withdraw from the account 0.08333 BTC.
  • Scenario 2: The value of the BTC compared to USD decreases, for example, we assume that for 1 BTC are needed $ 400. To pay the prescribed interest rate of 5% per day, ie 50 USD from the account BTC you will have in this case withdraw 0,125 BTC.

After this brief analysis it is clear that the account BTC will be to empty more rapidly in the case in which the value of BTC compared to USD decreases, getting to the point that the Admin, to continue to pay interest, will be forced to withdraw funds from the other portfolios and, ultimately, to an early closure of the program. Another detractor is the fact that investors hardly increase deposits in BTC seein compromitted gains from devaluation.

Ultimately, if the Bitcoin rate is plummeting, hurry up and try to leave fast the sinking boat.

Assuming that instead the value of BTC begins to rise, there would be better prospects for life of the BTC wallet and consequently for the HYIP itself.