Did you know that you could earn interest on Bitcoin, Ethereum and other crypto-assets that you own?
Bitcoin has been criticized by certain people in the past for being an asset that does not yield any dividends, but this argument no longer holds any water.
Many crypto investors store their digital assets on exchanges like Kraken and Coinbase for long-term safekeeping. Doing so means they are assuming counterparty risk, however, so in my opinion, if you’re going to opt for keeping your crypto on an exchange, you might as well put it to work.
Alternatively, you can store your crypto in cold storage, but you won’t be able to grow your wealth in that way unless your crypto asset prices appreciate over time.
In this post, I’ll show you how you can earn 5% and upwards on your Bitcoin by using the interest accounts on the platforms featured here.
Most of the platforms I will describe help you earn interest on your crypto by implementing some form of P2P lending. I have written extensively about my P2P lending experience and my favorite P2P lending platforms, but today we’ll add the crypto factor into the mix – hence we will be talking about crypto-backed loans. In my opinion, as an investor, the addition of crypto as collateral marks a huge improvement over the traditional P2P lending platforms, which can lack transparency and that mostly work with no collateral.
Crypto lending is becoming a huge industry, and we can take a look at Google trends to verify this. Have a look at the chart showing a strong worldwide uptick in interest in crypto lending options over the past three years.
Let’s take a look at the best platforms available. One of the good things to note before we start, is that these platforms exclude much less people than traditional P2P lending platforms. While the traditional platforms operate within very strict geographical limitations, with crypto lending platforms basically anyone who holds crypto can participate.
Youhodler
YouHodler offers an extensive set of crypto-fiat financial services. In its essence, the platform intends to help investors take advantage of cryptocurrencies, without having to actively trade them.
YouHodler has managed to make crypto-HODLing an active strategy. For investors, access to a crypto-exclusive savings account and interest-bearing loans are preferable ways to expand your portfolio.
This solves an instant issue with digital currencies – opportunity costs. That is to say, rather than leaving your digital coins sitting idle in a private wallet, YouHodler allows you to earn a yield on your holdings. At the same time, you get to keep hold of your investment and thus – you can cash out your coins whenever you see fit.
You can read my full review of Youhodler if you want to learn more about this platform, or just click the link below to go to the Youhodler website directly and get started.
Blockfi
Blockfi offers two products to investors:
- BlockFi Interest account
- Crypto-backed loans
The BlockFi Interest Account (BIA) lets you put your crypto to work and earn monthly interest payments in the asset-type that you deposit with BlockFi.
BlockFi clients using the BIA earn compound interest in crypto, significantly increasing their Bitcoin, Ether, and Gemini Dollar (GUSD) balances over time.
Crypto-backed loans allow you to access liquidity without selling. By using your crypto as collateral, you can unlock up to 50% of the value of your assets in USD. We fund same day through wire or stablecoin.
BlockFi clients use crypto-backed loans to do anything from paying off credit card debt to buying a home. Businesses turn to BlockFi to help them with payroll financing and business expansion. There are many advantages to borrowing instead of selling, including tax benefits.
With BlockFi you can earn up to 8.6% on your crypto. Note that this product is focused on USD not on any other fiat currency, and while there is no big downside there, it’s worth noting that if you are using a EUR or GBP based stablecoin you will need to convert those coins to a USD stablecoin like USDC or GUSD in order to start earning interest in a BlockFi interest account.
Coinloan
CoinLoan is a P2P lending platform for cryptoassets backed loans, based in Estonia.
Here’s how it works.
As a lender you first deposit fiat funds or stablecoins. The borrower, on the other hand, deposits cryptoassets to secure a loan.
Once the lender and the borrower are matched, a smart contract is used to ensure the borrower pays on time, else he would risk his crypto collateral.
Once the loan is paid off, the lender gets his principal returned plus interests, while the crypto assets are returned to the borrower.
Lenders have a significant benefit in thus having the ability to lend to people with verified collateral available. CoinLoan acts as the custodian for a safe and clear experience.
It’s worth noting that CoinLoan is licensed in Europe and well regulated. The platform also implements an AML policy.
Constant
Constant is a U.S.-based platform, but is open to investors worldwide. They have offices in Hong Kong, Vietnam and Malta as well. All your investments are fully secured and fully backed. The protection comes in the form of a combination of FDIC insurance, Ethereum smart contracts, and crypto collateral.
The Constant algorithm matches investors with borrowers glad to pay their rates. It then secures investor funds and borrower collateral in an unstoppable smart contract, and facilitates the entire transaction from beginning to end.
I’ve used this platform and it works as promised, however, I find the overall marketing and app UI to be targeted towards a young audience with lots of childish graphics and meaningless bonuses. While the platform works fine, I’m just not a fan of the branding and usability, but I guess it works well for a younger audience that is just getting started with investing and needs to see some fun stuff rather than the usual dry interfaces that characterize financial platforms. The best way to note the contrast is to open the BlockFi account and see how barebones and to the point that is when compared to a platform like Constant or even Celsius.
Celsius
The Celsius Network was founded in 2017 with the mission to harness blockchain technology to provide unprecedented financial freedom, economic opportunity, and income equality for the 99%. They currently have more than $300M Assets under management from over 40,000 users.
Celsius lend out responsibly from their community’s pool of assets. This means that Celsius only does collateralized loans, and your coins are never “locked up” and you can withdraw at any time.
Interest rates are based on market demand, if borrowing demand is high, Celsius are able to pay a higher rate on that coin. If demand is low, they will be paying a lower rate. Celsius are dynamically changing these rates according to supply and demand. All interest earned on Bitcoin is compounded and paid out weekly.
I’m not a fan of the branding used by Celsius, but the app and lending platform itself work perfectly fine. I’ve been using them and have always received the interest payments on time.
Bitwala Bitcoin Interest Account
This is a one-of-a-kind product: it allows you to earn interest on BTC inside a regular bank account.
The interest rate changes weekly, but at the moment, if you deposit your BTC in this account you stand to earn up to 3.95%.
Generating a passive income is automatic; every Monday, you’ll receive interest payments on your bitcoin investment. There’s no minimum investment period to start reaping your rewards and making withdrawals or deposits.
How does this work? Bitwala has partnered with Celsius, a network that specializes in Defi loans. Through this partnership, you can put your coins to work. Instead of holding your bitcoin in your wallet, you invest them for interest.You can start investing with as little as €10 and you’ll only need to cover the small network feel from the interest received. There are no other fees and you can cash out at any time.
You can withdraw from the BTC Interest Account any time you like, however, interest payments are made weekly on a Monday. Interest is calculated every second, and you will not receive any penalty for withdrawing early – you just will not earn any further interest on the amount you withdraw
All transfers from your Interest Account go directly to your non-custodial wallet – where you keep your private keys.
Sign up for a Bitwala Interest Account
Lendabit
Lendabit is a platform that offers loans secured by crypto collateral provided by borrowers. The platform has been designed to remove all unnecessary steps from the lending process, thus more attractive terms and conditions to both lenders and borrowers. The customer interface and data processing behind it are structured so as to support prompt and secure transactions.
Interest is calculated based on the formula: Daily Interest = (Loan Amount × Interest Rate) / 360, where 360 is used for the number of days in the year no matter what the actual number (365 or 366) is.
Lendabit partnered with BitGo for secure custodianship of the crypto you deposit.
BitGo is an industry leader of multi-signature encryption technology and a qualified custodian with a primary focus on cryptocurrencies. BitGo eliminates risk and increases transparency in the crypto markets by providing the most secure and compliant custodial and liquidity solutions.
Earn interest on crypto with Lendabit
Binance Savings and Staking
With Binance, you have several ways of earning money on your cryptos.
Flexible Savings
The easiest way is probably using their Flexible Savings product. Flexible Savings is your Crypto savings account. Subscribe your crypto to earn interest, with the flexibility to redeem your funds at any time.
To quote a few estimated annual yields available at the moment, we have:
- BUSD at 2.44%
- USDT at 2.11%
- DASH at 1.83%
There are 24 coins you can use for the flexible savings account.
Locked Savings
For higher returns, you will want to opt for the Locked Savings product. By subscribing your crypto to locked savings periods you will in return get higher interest earnings. You can choose from several durations depending on the coin you are using, but it’s typically one or more options from the following:
- 7 Days
- 14 Days
- 30 Days
- 90 Days
For example, with BUSD you get an annualized interest rate of 7.42% at the time of writing, while USDT gives you 6.79%. Both of these are stablecoins that can be easily bought from the Binance exchange itself.
The range of coins available for locked savings is more limited, we can only choose between 6 coins: BUSD, USDT, COCOS, ONE, EOS.
Staking
You might have heard of staking, which can be used for those coins that use a Proof-of-Stake mining mechanism. With Binance you can stake 24 different coins, with the returns varying significantly between one coin and another. Among the highest yielding are KAVA (14-16%), LOOM (10-12%) and ZIL (8-10%)
Earn money on crypto with Binance
Concluding Thoughts
I’ve tried out all these platforms and found YouHodler, BlockFi and Celsius to be the ones I liked most. The platforms mentioned in this post all work fine, but you’ll need to find the one that has the best branding and user interface for your tastes. Some of them also reward you in their native tokens, but in general, I prefer going for Bitcoin rewards.
What do you think of P2P lending platforms that provide crypto-backed collateral? I think it’s a nice upgrade on the traditional P2P lending platforms and as an investor it gives me more security.
For beginners, I will suggest you buy bitcoins worth of that price and you hold onto it. It’s a long scale investment as you watch your coin grow as time passes. This might not be the fastest way to make money but definitely the easiest way.
Do not invest more than you can let go. Bitcoin is independent of any commodity or currency which makes it unpredictable and as such, prices might change overtime. However, if you decide to invest it in Forex or any investment company out there, I advice you do proper research to avoid being scammed.
Hello there,
nice review but what about Nexo?
Cheers
I’m currently trying it out, will update the post when I have a solid opinion.
Thank you for the information.
I’ve been using MyConstant, Nexo, Block Fi and Ledn to earn on both crypto and stable. I tried using Crypto.com & Binance, but gave up as I couldn’t navigate their sites easily.
Is there a site that you’ve found which aggregates a majority of the sites out there with updated rates? I’ve tried both BitCompare & Loanscan but they seem to focus on those sites that pay for ads. More importantly, the rates are often incorrect.
I don’t know of any good aggregators, but let us know if you find one.
I’m curious why you found the ones you mention hard to navigate. BlockFi, for example, has a very simple interface.
Sorry for the confusion. The first four: MyConstant/BlockFi/Ledn/Nexo have been great….It’s the other two (Binance/Crypto) that I had trouble with their platforms.
Thank you, that makes more sense. BlockFi remains the leader at the moment in my opinion, but it’s still early days for all these platforms.
Do you feel confident in earning interest on stablecoins? As much as they function well now, I always have the feeling Tether and other stablecoins might just prove to be thin air one day, and lose their 1:1 value.
I prefer using Bitcoin rather than stablecoins. I think the risk with stablecoins is not big, but I’d rather avoid them if I can.
You mentioned ‘I think the risk with stablecoins is not big, but I’d rather avoid them if I can.’….anyway to show USDT as a stablecoin that’s not stable/secure? Is it due to the 1:1 pegged value not justifiable for what they actually own as fiat in the bank?
Yes, the lack of a serious audit and proof of reserves is the biggest question mark in my view.
I am glad that I found your blog. So much useful information here. Last few days I was researching lending platforms to split my investments and reduce individual risk, and it seems that at least 3-4 can be trusted.
You mentioned that you will also review blockchain.com platform. Any idea when we can expect this review?
Glad you found it useful. Re Blockchain.com, it’s not something that’s a high priority for me at the moment.
Bitcoin to the moon soon. It’s not too late to start investing in bitcoin. Just last I acquired a few bitcoins with my retirement funds and proceeded further to learn how to trade cryptocurrencies. Today I can proudly say I this has been the best investment in my lifetime and I am enjoying the bull run in as much as any bitcoin investor is enjoying it.
Great article thank you. Do you know of any platforms that offer btc interest while self custody your keys? I’m so hesitant of counter party risk. Cheers!
Unchained Capital should soon be releasing such a solution. You can also check out HodlHodl.
I am using Celsius and it seems to be very good. I am using it for 3 months now. The Cel token is doing wonders and now ranked 17th in CMC/Coingecko. Lot of new things are coming up in 2021.
Looks decent enough but targeted towards younger people or beginners in investing. I don’t like their branding at all. The CEO/founder has had some weird moments as well. I also dislike the app requiring login every time you access it.
I agree. I should update my previous comments. I’ve now had more time to use Celsius and like it more and more and not only because the token value is rising. The CEO does a very good job at engaging with his customers. I feel that there is a level of transparency that I don’t see with NEXO.
With that said, I still like NEXO, despite the token value not going up as high. As you mention, Jean, I feel that Celsius might be more geared towards younger consumers, which has been a little annoying as an older user. NEXO makes me feel slightly more confident because they seem a bit more polished/mature.
Ultimately, I’ll continue using both NEXO and Celsius, given that they have unique advantages (primarily, higher interest rates). I also feel that given Celsius’ token rise, NEXO’s token is likely going to catch-up soon so I’ve loaded up.
Nexo has worked great for me and I like their 30% dividend and loyalty programs, but wish that I could buy coins directly within their platform. I think they have better interest rates compared to BlockFi, but things change so often.
Celsius and Crypto.com are not that good, in my opinion. Are the others mentioned in your article even available in US?
Why do you think Celsius and Crypto.com are not that good?
I should start by saying, they all have their limitations. As mentioned above, I wish their was an ability to buy crypto via nexo. Also, you can only earn interest on select coins – ADA and LINK are not included yet.
Compared to Celsius, the same issues exist. I found that buying their token had much greater fees associated with the process. The purchase of other coins through their app’s 3rd party affiliated exchange takes forever to show up in your account. They don’t have a website (unlike Nexo, Crypto.com, etc) – the app design is very amateurish. Finally, I am not confident in the CEO/company. If you go to their social media accounts, the posts appear to be directed at teenagers or 20-something crypto investors who like to party. The CEO doesn’t appear professional, in my opinion. Nexo posts, on the other hand, are more focused and about what’s important to me – making more money with my crypto!
Crypto.com may undoubtedly beat both Nexo and Celsius in diversity of coins that can interest and you’re able to purchase crypto in-app (with credit card). I think there is an ability to also purchase with bank account, but I couldn’t figure out how to do that. With that said, the ROI is not as high as Nexo, which is most important to me. Crypto seems to have some overly complex way of earning interest that includes buying a lot of their coin and getting one of their credit cards, which is annoying. Additionally, I’m not a big fan of their app/web design. The fees for purchasing with credit/debit card are much higher than just purchasing with Coinbase pro and moving into another wallet (like nexo or crypto.com).
All in all, I like Nexo’s model for earning more $$, it’s multi-layered, but I feel like they do the best job at clearly communicating how you will earn. In my opinion, they’ve built the best incentive-based system for getting newbies to join as well as keeping existing customers happy. I tried all of them out just this month and have only deposited a small percentage of my net worth. I’m currently feeling confident enough to put all of my savings (less stocks/retirement plans, of course) into Nexo likely as a stable coin, but may shift more and more to Bitcoin as we pass the $20k mark. I do have small stakes in both Celsius and Crypto tokens on their apps, just in case I’m wrong and they blow up. Crypto is also the easiest I’ve found to purchase/earn on non-Coinbase alt coins (eg ADA).
Thanks for your thoughts Sean. Alex Mashinsky the CEO of Celsius is definitely a polarizing guy. On the other hand, he has a long track record as a successful entrepreneur and I do believe he is building a long-term project at Celsius. However, I found some of his public declarations quite questionable and that reduces my trust as well.
The branding on the Celsius website is horrendous too in my opinion. The first thing you see on accessing the site is a teen blowing bubble gum in your face. I can’t understand how that is supposed to inspire confidence, and as you say the targeting of the platforms seems to be towards the young and gullible. It’s quite a pity as it doesn’t match up with Alex’s overall message. However, that’s probably where the money is at the moment.
I recently had to withdraw all of my assets from Binance, as I received notice that they cannot work with US citizens. Very frustrating!
Now I have discovered (via prompt and courteous reply to my inquiry) that BlockFi is not allowed to do business with New York State residents.
Do you know which of your recommended sites are available to a NY resident?Thank you!
Check out nexo.io. I’m pretty sure they’re allowed in all US states. I’ve really liked them and it seems more professional compared to some of the others I use (I.e Celsius, Crypto.com). I never tried BlockFi or Compound Finance.
I find BlockFi to be very professional. What made you pass on them?
I never tried BlockFi and I’m not sure if they had an app when I began the process – I believe they do now. When I did some google searches on which had the best interest rates, Nexo came out on top + Nexo gives 30% profit dividend to its users/holders of Nexo token. Does BlockFi have a token? Thoughts on their platform and particularly their ROI compared to others?
In the past week, I’ve grown to like Crypto.com more and more for altcoins where I can’t earn interest on Nexo. I do think there interest earning program and CRO tokenomics needs to be improved – their token is currently hovering at $0.06 from a high of $0.20 a few months ago. Had I purchased their coin in August, I would’ve been very disappointed.
I don’t really care whether a platform of this sort has an app or not. A lot of emphasis on a mobile app usually means they are targeting beginners or those with a low level of financial knowledge, which actually is a warning sign for me.
Nexo also has two things that usually put me on the alert – the fact that they had an ICO and the fact that they have their own token that they push hard. Again, these are common traits with inferior and less trustworthy platforms.
Nexo having these attributes doesn’t automatically put it in my list of platforms to avoid, but it doesn’t put it at the forefront of options either. However, I have been reading with interest the content they have been producing via their blog, and overall the company seems quite solid. I will keep monitoring and evaluating further.
Hi,
I have a Nexo account for a few months now, didn’t have a single problem with them. Just to let you know. Why Nexo seems sketchy to you?
Nice Article!
Have you checked out Nexo and/or Celcius Network? Been out for a while now.
Yes, I’m aware of both. Haven’t used Nexo as I’m not 100% convinced of their trustworthiness yet. Celsius I’ve used without any problems.
Hello Jean, Came across your blog when searching info about ‘crypto interest accounts’ on the web. Went through several content on this blog and there are lots of very interesting and inspiring topics you’re covering.
As I’m trying to find out what is all out there in the field of crypto interest accounts I’m curious about your thoughts about the Blockchain.com wallet interest account (only available with verified identity) which is currently at 6% APY?
Another one I’m using for a while is btcpop.co which offer a wider range of products including kind of a ‘pooled’ lending account. I could not find any info about this site on your blog but still curious if anyone has also experience with this?
Hi Tim, thanks for your comments.
Btcpop.co looks very amateurish and fishy, and based out of the Marshall islands. I would automatically distrust such websites. Trust is very important with financial investments, and so I only invest with those platforms which clearly show who is behind them and are also based in jurisdictions I trust.
Blockchain.com on the other hand is a well-known brand and is a huge platform in terms of users. I haven’t delved deep into it so I can’t comment further than that. I hope I’ll have the chance to take a closer look at it in the future and review it on this blog.
Hi, do you know of a platform where you can earn interest on the eurs stablecoin? At the moment even nthe highest rate can’t keep up with the falling usd price against the euro. I’m just losing at the moment with my euros converted to usd stablecoins.
Youhodler added EURS as stablecoin with 12,%
Hi Jean,
Thank you for the writeup! Have you tried Ledn.io? They claim to have the highest interest paid for BTC and USDC with no restrictions?
Hi John,
I haven’t tried them yet. I expect many players to flood the market and interest rates to change very frequently, so I wouldn’t join a platform purely based on the current rate they promote.
Hi Jean, glad to stumble upon this. Just pulled out of Nexo as listened to a not so great vlog re their legitimacy, so glad to see there are more companies out there offering similar benefits.
Hi Fraser, what did you hear about Nexo?
Constant seems a little sketch. You said they partly have FDIC but I couldn’t find it anywhere on their site and the very first thing they asked me to do was do KYC. I’d definitely like to see more reviews with them first, especially after reading their FAQ about working with loan originators and how we could potentially lose our money.
I think they need to work a bit harder to prove that they are trustworthy, however, I have been investing with them for a while now and have had no problems.
Good. Informative.
Might also add comparison stats for eSier comparison.
Hodlnaut offers one of the best and most consistant btc savings rate since it started (6%). Vc funded, no ico. Not much marketed but Singapore regulated so high degree of confidance. (Full disclosure: I save with them.)
Thanks Simon, seems like a decent platform. It is still too small for my liking, but I’ll make a note to circle back to it in a year or so to see how things are going.