MMM Global leader Mavrodi takes credit for Bitcoin’s recent price surge

Sergey Mavrodi, the leader and creator of MMM global – currently the hottest ponzi scheme around – took credit for Bitcoin’s recent price surge in a Financial Times interview:

Given the confusion about the Bitcoin use, can I ask when did MMM Global begin and when did it start using bitcoins, or has it done so from the beginning?

MMM Global had started earlier, but only after the launch of China it had a qualitative leap. As millions of Chinese have become involved both in MMM-China and MMM Global. (In MMM Global the growth rate may be higher if you do the tasks. And all members perform them indeed quite willingly.) Accordingly, it has created a huge demand for Bitcoin and abruptly increased its price. But that’s just a side effect. I have never made it a special aim to manipulate the Bitcoin price.

Earlier this week, we discussed possible causes for the spike in bitcoin price, one of them included the rapid growth of MMM Global.

Current state of MMM Global

Since MMM Global is a classic ponzi scheme we need to understand how these schemes work. They start with a hook promising high returns with little to no risk, much like a pyramid scheme. However, unlike pyramid schemes one does not need to recruit others in order to earn a commission. Funds from new participants are used to pay existing participants higher up on the ladder. The final stage of a pyramid scheme is it’s collapse, surprisingly the collapse of ponzi schemes is slow and painful as existing investors often reinvest back into the dying system, thus prolonging the inevitable.

In order to figure out what stage MMM Global is, we need to look at some data. Looking up mmmglobal.org on alexa gives us a pretty clear picture that the site traffic is increasing. Using further research I found that MMMGlobal.org used to receive around three thousand unique viewers a day three weeks ago. Today, MMMGlobal receives more than seven thousand unique users. In other words, they more than doubled their traffic in the past 3 weeks. Further research on youtube reveals more than 50 new videos uploaded in the past 24 hours all urging new users to join MMM Global and showing off payments received.

It is obvious that MMM Global is still in it’s growth stage, the question is, when is it going to crumble? It took authorities three years to take down the original MMM scheme in 1989. If we assume that the police have more resources and are better educated about ponzi schemes, and taking into account the whole Paycoin/ Paybase / GAW Miners fiasco with Josh Garza who still a year later is a free man, I give MMM at least a year before it crashes.

MMM China

Another important detail to notice is even though MMM Global was supposedly established in 2011, MMM China was just recently launched in April of this year. Since the Chinese are known to lead bitcoin markets, lets take a look at recent bitcoin volume starting April 2015 (charts taken from bitcoinwisdom):

mmmglobalbtctrading

Here we can see a clear increase in trading volume around mid June. It may be a coincidence that MMM China launched 3 months earlier and now bitcoin trade volume is surging, but if the increased trading volume continues and MMM China grows, then we could speculate on a relationship.

If bitcoin price is really in a linear relationship with MMM China’s growth then what will happen to the price once MMM China goes bust? Since a Ponzi scheme’s death is slow, we might see a powerful yet long bear market as investors try to liquidate their bitcoins. On the other hand, bitcoin might have outgrown ponzi schemes like MMM Global and MMM China and what we are seeing is merely a coincidence, one that Mavrodi is using to his advantage. Tell us whether you think that bitcoin’s price is related to Mavrodi’s ponzi scheme, or whether its all a big coincidence.

If you liked this article follow us on twitter @themerklenews and make sure to subscribe to our newsletter!

Leave a Reply