The end of 2020 saw Bitcoin hitting a new peak of US$29,000, after nearly quadrupling in value over the past 12 months. Heavy interest by investors and traders continues, due in large part to the cryptocurrency’s ability to deliver quick financial returns as well as its potential to become a standardised payment method. Yet increased attention and interest inevitably attracts scammers looking to make illicit profits.
Back in 2017, Bitcoin began showing a strong increase in value – culminating in a dramatic spike at the end of the year, which made world headlines and put its value at nearly US$20,000. These gains were short-lived, however, as its value soon dropped to roughly $7,500 and then continued fluctuating throughout the following years. Bitcoin bottomed out to just below $5,000 at the end of 2018, and began its current upswing around the time COVID-19 went global. Some predictions have Bitcoin potentially worth up to $318,000 by the end of 2021.
Bitcoin’s popularity has inspired recent pyramid schemes that have targetted Maori and Pasifika families. These schemes naturally offer high returns on crypto-based investments, letting their victims actually make some money at the initial stages before being left with nothing at the end. To make matters worse, the nature of cryptocurrency enables scammers to continue their action behind the protection of anonymity within a decentralised and digital banking system.
Ngā Tāngata Microfinance general manager Natalie Vincent said that people have gone so far as to apply for loans to invest in these fraudulent schemes. She warns that any investment opportunities that gains profit by enlisting new members is illegal.