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The psychology behind pyramid schemes is a fascinating yet deceptive curiosity. The initial recruiter forms the apex of the pyramid. They then offer a lucrative deal of goods or services in return for investment. The initial recruit has to recruit more members to recoup their invested money. Furthermore, those members have to recruit even more to get their money back and so on. This unsustainable transfer of money goes on until, naturally, the system collapses.


The 5 Reasons Explaining the Psychology behind a Pyramid Scheme

However, the pyramid scheme has been lining the pockets of its initial participants for ages all over the world. This begs the question; Why have they carried on working? Read on to delve into the psychology behind pyramid promotions and why people continue to buy into them.

People join pyramid schemes because of 5 character traits. Learn to recognize these traits or emotions.

They are:

  • greed,
  • authority,
  • likeability,
  • reciprocity and
  • common consensus.


Greed. The Main Ingredient to a Good Pyramid Scheme

People instinctively want more. It is simply in our nature to want more of what we have little of. For most people this is money. For the most part, we can all do with extra cash. Pyramid schemes cater to our desires by quickly offering us a big return on our money. Ultimately, they reel us in with the promise of fortune through very little effort.



Many Crypto Pyramid Scheme peddlers like to see themselves as experts on the subject of cryptocurrency. They use the technical solutions and inventions as shields protecting them from questions posed by laymen. We tend to trust experts after all, don’t we? One of their go-to moves is to get pictures taken with authoritative figures pretending to be a peer. Gaining and abusing your trust is pyramid scheme psychology 101.

Another tactic which they employ is to witness from personal experience. They were either stuck in a 9-5 corporate job or were on the brink of financial ruin. Until, one day, they were introduced by the wonders of network marketing. They were presented with an opportunity and grabbed it with both hands. Today they stand in front of you, wealthy. But more importantly, they want to share that wealth with you. Exactly like someone shared it with them.

Sounds very noble right?

No. THINK ABOUT IT. What they are really doing is selling you the idea that you could achieve what they have(even though what they have is only for show, and not real). Therefore they need you to believe that they have been there, done that and got the T-Shirt. After all you naturally trust what you can see. Your problem is not what you see, but how what you see was achieved. The deceit is in the source of the wealth and not the fact of whether the wealth is real or not.


Likeability Goes a Long Way

You are much more open to agree a deal with someone you like. Sometimes you will even forego a better deal in order to strike it with someone you like. This knowledge provides a key strategy pyramid scheme operators and promotors. They will move heaven and earth for you to like them. The pyramid scheme psychology dictates that they pay you a plethora of compliments. Wait until you see, see how they congratulate each other on reaching levels and qualifying for all sorts of bonusses which are triggered by… You guessed it… Your position in the pyramid..

Mix their brilliant flamboyant personalities with the fantastic, once in a lifetime, deal they are offering you and there simply is no reason for you not to invest. Emotion plays a bigger role than logic when making a buying decision and when you make an investment you are buying the opportunity of making a profit. Pyramid Peddlers always sell you the dream and attempt to overwhelm you with the facts and numbers. It is natural to like the guy who tells you how rich you will be.


Reciprocity is Another Building Block in the Psychology Behind Pyramid Schemes

Whenever someone else does you a favour, the normal response would be to want to repay them. This is one of the simplest sales techniques. It is a staple of any good salesman. The free sample or maybe the bonus gift. You have seen this trick a hundred times over and it still gets your attention. Every time.

The initial recruiters will offer incentives to followers who show enthusiasm for recruitment. As a result, they feel special and drives them to excel. Their competitive nature cloud their judgment regarding what they are selling, so they are easily taken in by gifts. These gifts can be anything from a free upgrade to a new level of whatever program they are on. Gold plated tat, anything from credit cards to iPhone covers. Trips to launch or “POWER” events and much more. You get the picture.

Pyramid marketing programs always offer some sort of syllabus based education package. 99% of the time it is either outdated or stuff you can get for free on YouTube. However, many people fall for this free education and feel they already have something worthwhile in return for just paying attention.



This is easy. As humans, we naturally want to belong. Consequently, pyramid scheme promotors will go to extraordinary lengths to share the success stories of others who have invested. We want to be in on the act. People making money around us tend to embolden us. You are now highly motivated to cough up your cash to be rich like everyone around you.

When you perceive someone else around you to be making money easily, very little will persuade you not to follow.


The Psychology Behind Pyramid Schemes Is so Simple, Yet SO Powerful

Why do pyramid schemes work? The answer is deceit. The psychology behind pyramid schemes comes down lies. Or more precisely the ability to lie. Initial recruits have to lie to downlines that they will become rich. They have to lie to themselves to keep believing that they are not doing anything wrong. In contrast, victims have to lie to themselves and sometimes to friends and family.


Have you recognised this type of behaviour. Leave your comments below.

***This article is intended to educate and should in no way be seen as investment advice or an enticement to use any specific platform or service. Cryptocurrency markets are highly volatile with big profit opportunities but you should also remember that you could lose part or all of your investment whenever you take part in any high risk investment. Crypto trading is not a regulated industry in most jurisdictions, which in itself carries additional risks. IF YOU ARE NOT AN ASTUTE TRADER, SEEK INDEPENDENT FINANCIAL ADVICE BEFORE MAKING ANY INVESTMENTS.***

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