In recent years, BlockFi has become a prominent exchange for cryptocurrency enthusiasts and the general public. One of its strengths is its interest account. Users get 4.5% APY on Bitcoin and 8.25% on stablecoins. But can they earn more, and is the provider legit?
Key Things to Know
This privately-owned platform was established in New Jersey in 2017. The interest account (BIA) is its flagship product. The logic is simple:Uusers deposit their coins to earn compound interest. According to the latest BlockFi comparison, the system works with fewer assets and offers lower APYs than the strongest competitor. But it still has merits:
- Currently, BlockFi works with Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), USD Coin (USDC), Tether (USDT), Gemini dollar (GUSD), and PAX Gold (PAXG).
- Aside from deposits, users can take advantage of loans with crypto as collateral.
- The loan-to-value ratio is 50%.
- The company does not charge recurrent monthly fees.
- There is no minimum deposit requirement.
- Users can withdraw their funds at any time, but only one transfer per month is free.
- Registration is simple despite KYC compliance.
The custodial service is provided by Gemini Trust Company, which is authorized by the New York Department of Financial Services. It holds all crypto holdings and has its own insurance for deposits. The platform is accessible globally, except for countries on the watch list or under sanctions.
The company’s leadership has a conservative approach to regulation, which is favorable for long-term growth. At the same time, the absence of FDIC insurance means that the offer may not be regarded as a savings account. It is an investment option with unique risks related to crypto volatility.
A Closer Look at the Interest Account
The company offers three different interest rates for Bitcoin, Ethereum, and stablecoins. Here is how they compare:
- Users who deposit up to 0.1 BTC earn 4.5% in annual yield. The rate for 0.1-0.35 BTC is 1%, and for 0.36 and upwards, it falls to 0.1%.
- For Ether, the highest annual interest is 5% (up to 1.5 coins), and the lowest is 0.25% (from 51 coins). Between 1.5 and 50 ETH, the rate is 1.5%.
- Those who deposit USDC, USDT, or GUSD get 8.25% on the first 40,000 coins. Then, the interest drops to 7%.
Who Is BlockFi For?
The platform is most attractive for less experienced users who want to generate passive income. They do not need in-depth market understanding, as BlockFi provides direct ACH deposits. In comparison with conventional investment options, such as savings accounts with Ally Bank, the difference in interest is staggering.
The Verdict
BlockFi is a reliable provider with fairly attractive conditions for individual users. It has an undeniable potential for growth due to its safe practices. To sum up, it is worth your time, but do not expect the most competitive rates on your loans.
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