Blockfi is a crypto lending provider that offers two products to investors:
- BlockFi Interest account
- Crypto-backed loans
Earning Interest on Your Crypto
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.
You are given one free withdrawal per month, however, which should be sufficient for most long-term crypto holders who just want to place their money in secure custody and earn interest. They wouldn’t be doing many withdrawals anyway.
Getting a Crypto-Backed Loan
Crypto-backed loans allow you to access liquidity without selling, which has great tax benefits and lets you stay in the crypto game. By using your crypto as collateral, you can unlock up to 50% of the value of your assets in USD. BlockFi funds within the same day through wire transfer 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.
In 2020 alone, BlockFi distributed more than $50 million in monthly interest payments to their clients.
BlockFi Credit Card
They also announced a game-changing new product: the first-ever Bitcoin Rewards Credit Card. Cardholders are be able to earn 1.5% back in bitcoin on every transaction. It’s an intuitive and easy way for people to access a new asset class, and it’s going to fundamentally change the way credit card rewards work. BlockFi clients have an exclusive opportunity to join the waitlist and be first in line to receive the card. In 2021, this card will be more widely available in the US.
The BlockFi mobile app empowers clients to take the BlockFi platform with them everywhere they go. You can transfer funds using ACH and wire payments, and they’ve added support for a wide range of currencies, including Litecoin (LTC), USD Coin (USDC), Tether (USDT) (USDT is available to non-U.S. clients only), and PAX Gold (PAXG), the first cryptocurrency that lets you directly invest in gold.
BlockFi is also building new bridges with institutions. In 2020, BlockFi became the first crypto company to join Symphony, one of the top collaboration platforms for the world’s leading financial firms, introduced lending on tokenized assets to help investors become more capital-efficient, and partnered with Fidelity Digital Assets to enable clients on Fidelity’s institutional-grade digital assets custody platform to pledge bitcoin as collateral in a transaction.
But what does this all mean for BlockFi and the future of crypto? In a word: inclusion. Every new product, feature, and partnership is intended to bring more people into the crypto community, giving access to a thriving financial market for those who didn’t—or couldn’t—participate in it before. Crypto is a big tent, and BlockFi is inviting the world inside.
One of BlockFi’s core values is “Transparency Builds Trust,” so they strive to teach first-time users (and even savvy investors) about the crypto market to help them understand what they’re investing in. With BlockFi, what you see is what you get. And that’s why everyone who signs up with us is a valued client, not a “customer.”
I’m very excited about the next innovations that are coming from BlockFi, and I regard this platform as one of the very best ways to make money on crypto. If you’re not a trader but you’re happy to hold your cryptos long term, this is one of the best ways to make profits off your cryptos, especially in the case of cryptos like Bitcoin that do not inherently provide any kind of returns for holders.
Summary
BlockFi is one of the most serious and reliable crypto lending platforms, and it allows you to earn interest on the cryptos that you hold. You can also take out loans using crypto as collateral.
Pros
- Regulated in the U.S.
- High level of transparency
- Solid team
- Great track record
Cons
- You need to put your crypto in BlockFi’s custody while using their products.
Even though their website states that profile verification usually takes 1-2 days, even after 10 days my verification is still pending. I tried to contact them, but received only generic reply.
I can only imagine what would happen if I had to contact them about some problem with my funds.
Anyway, I will give them a chance when / if I get verified.
Must be a one-off case, try pinging them on twitter.