The catch is that at some point one of these things will happen:
- The promoter will vanish, taking all the remaining investment money (minus the payouts to investors) with him or her.
- The scheme will begin to collapse under its own weight as the investment slows and the promoter starts having problems paying the promised returns (the higher the returns, the greater the risk of the Ponzi scheme collapsing). Such liquidity crises often trigger panics, as more people start asking for their money, similar to a bank run.
- External market forces, such as a sharp decline in the economy (e.g. Madoff and the market downturn of 2008), cause many investors to withdraw part or all of their funds; not necessarily due to loss of confidence in the investment, but simply due to underlying market fundamentals. In the case of Madoff, the fund could no longer appear normal after investors tried to withdraw $7 billion from the firm in late 2008 as part of the major worldwide market downturn affecting all investments.