Simply no it is not all a scam but like every speculation there are plenty of people seeking to take advantage in an underhand way.
Ignoring the cryptocurrencies themselves, it is clear that the blockchain technology which underpins part of the system is going to transform many industries. The Land Registry is looking at using it for example to manage UK property registration and there have been many other companies looking to do the same for their industry.
Cryptocurrencies themselves are likely to be adopted by the existing financial players, with the FCA, the UK regulatory body looking at how it can be adopted as well as many major banks developing their own version called Ripple, which is seeing increasing adoption - albeit its value also seems to fluctuate broadly in line with bitcoin. CNBC takes a closer look at Ripple here
However, Bitconnect, one of the most valuable of cryptocurrencies last year and reaching a market cap of $2.6bn, was constantly slated as being a ponzi scheme. It promised a daily return of 1%. This meant that a $1,000 dollar investment would be worth $50m three years later.
That alone should have set of alarm bells - but when you hear of how startups have funded themselves
due to an early investment in Bitcoin, it is easy to see why people ignore those warning signs.
Last week they announced they were shutting down and almost instantly the value dropped 96% with many people effectively losing everything. For a more in depth look at the fall of Bitconnect, the NextWeb has an excellent article here