You can earn interest on the platform because BlockFi also charges interest on its loans to consumers. When you deposit your crypto into the BlockFi platform, you’re sending it to one of their secure and regulated custodians, like Gemini. At that point, BlockFi can lend cryptocurrency to multiple institutions like Fidelity Investments or Susquehanna. The institutions then use those assets to make gains from arbitrage transactions.
Because BlockFi is not an actual bank, it doesn’t have the overhead costs of maintaining capital reserves and bank regulations. To generate revenue, BlockFi purchases regulated equities, futures and lends crypto assets.
BlockFi Overview
BlockFi offers interest-earning accounts, low-cost loans secured with crypto and fee-free trading. BlockFi has excellent interest rates, flexible structures and a high degree of security available on their crypto lending ecosystem.
Some of BlockFi’s key features and benefits:
Simple account management: Once your funds are deposited, BlockFi provides complete transparency and control over the assets in your account.
1-Mobile app: The BlockFi app gives you full access to your digital asset holdings from any smart device. The mobile app allows users to fund their BlockFi account using their crypto wallet or bank account.
2-Flexible payments: BlockFi allows users to choose the cryptocurrency in which they receive interest payments.
3-Outstanding security: The BlockFi platform supports 2-factor authentication and other layers of security to protect your account. In addition, your money is held with its regulated custodian Gemini when you deposit your funds on the platform.
No hidden fees or minimum balances: The platform does not charge any hidden fees or require you to maintain a minimum balance.
Interest Rates on BlockFi
The two most reputable platforms offering cryptocurrency interest accounts are BlockFi and the Celsius Network. Since Celsius and BlockFi take custody of your digital assets, they are centralized companies that use decentralized assets. So, they are referred to as centralized finance (CeFi). Their interest-earning accounts are different from savings accounts because they come with the risk that neither your principal nor your interest is guaranteed.
Let’s compare some of the interest rates on each platform:
BlockFi:
* 4.5% on 0 to 0.1 BTC, 1% between 0.1 to 0.35 BTC and 0.1% on any amount over 0.35 BTC
* 5% on 0 to 1.5 ETH, 1.5% between 1.5 to 50 ETH and 0.25% on any amount over 50 ETH
* 8% on 0 to 40,000 USDC and 5% on any amount over 40,000 USDC
Celsius:
* 6.2% for the first BTC and then 3.51% for any amount over 1 BTC
* 5.35% for the first 100 ETH and then 5.05% for any amount over 100 ETH
* 8.8% for USDC