HYIP stands for High-Yield Investment Program. They have been around for a long time, and are not anything new to Bitcoin or cryptocurrency.

A HYIP is essentially a Ponzi scheme – more often than not, a scam. It involves paying returns to earlier investors with money invested by new investors. As a result, some do walk away with a positive return, if they get in early enough. However, it’s not a sustainable model. Once new investors stop coming on, the cash flow stops, often leaving a large number with significant losses.

To generate a high return, HYIPs often involve investors’ money put into high-risk ventures, such as day-trading stocks or bonds, or sports betting. A Bitcoin HYIP can work the same, except with Bitcoin or another crypto as the investment currency. Those running HYIPs are looking to benefit from an increased willingness to invest from crypto holders, as well as the cross-border payments enabled by cryptocurrency.

One common variation of the traditional HYIP in crypto is investing in a “mining pool”. The idea of this is to put money towards a cryptocurrency mining operation, with the mining rewards paid out to members. Often times these are fronts for a Ponzi scheme, though in some cases they can be real.

Are Bitcoin HYIPs Legit?

It’s tough to say if all Bitcoin HYIPs are real or fake, as they need to be taken on a case-by-case basis. The majority of HYIPs are essentially scams, though. Crypto’s penchant for attracting scammers and get-rich-quick schemes makes it perfect for those operating these schemes.

There are certainly some programs out there with a real investment plan, such as funding a mining operation. On face value, it can be hard to differentiate between a legitimate HYIP and a clear scam. It also bears mentioning, any Bitcoin HYIP is also reliant on the stability of the crypto market itself. Investing in cryptocurrency is a risk in of itself, so putting your money into a high-yield investment is twice as dangerous. Any money put into these programs should be money you are prepared to lose.