BlockFi Review – Trustworthy Crypto Platform to Use in 2021?
BlockFi is your one-stop-shop for crypto storage, leveraging, and management. It advertises an 8.6% APY (interest gained per year) just for holding your crypto on their platform, much like a bank does with fiat. BlcokFi’s website also offers financial tools for experienced and rookie investors alike. You can buy, sell, and trade major coins like Bitcoin and Ethereum from their website along with USD-based coins like USDC, USDT, GUSD, ad PAX.
Trading is instant, and it’s stored in your account on BlockFi. There’s also a crypto-backed loan system where you can place your crypto as collateral for same-day cash. BlockFi acts as a crypto-bank that you can access 24/7 from your computer and another hot wallet to store your crypto in. Of course, with the constantly evolving nature of crypto, it’s hard to separate legitimate projects from those offering lucrative rewards without having the ability to deliver.
BlockFi’s claim that it can produce an 8.6% return on investment simply for storing your coins on their platform is undoubtedly enticing. Banks won’t even give an APY greater than 1% for most savings accounts, making the days where placing your hard-earned cash into a savings account was a viable and safe way to earn easy money. If BlockFi shows itself to be a reliable platform for crypto management and can match its APY claim to reality, it will undoubtedly be a worthwhile investment.
So, is BlockFi a crypto hero or a crypto zero? We’ve done the research and have put it here to decide whether or not you want to use BlockFi for your cryptocurrency needs.
The BlockFi Interest Account
BlockFi aims to fill a void within cryptocurrency which is the stable and secure holding of currency that fiat financial institutions have been offering for years. The aim is to deposit your crypto into BlockFi like you would with a bank or a credit union using fiat.
The main feature that BlockFi advertised when it launched and continues to promote is its BlockFi Interest Account (BIA). Users can quickly open an account and deposit their crypto there, earning interest while being stored. The user is then paid consistently for their deposit, generating a consistent stream of revenue from their account. This account offers a level of security for more wise investors who are willing to place their crypto in a BlockFi account rather than holding it on their own without any guarantee of profit in the future.
But what can you make with a BlockFi Interest Account? At the time of writing (April 2021), BlockFi offers an 8.6% APY for USD-backed stable coins, including USDC and GUSD deposits. It also advertises a 6% APY on BTC and 4.5% APY for ETH deposits. That money doesn’t just sit there. BlockFi makes it possible to use the crypto that you deposit into it in novel ways that haven’t been available for crypto users for quite some time.
While the BlockFi Interest Account is the primary feature of BlockFi, its expansion into crypto trading, leveraging, and institutional services have made it a more versatile tool for crypto management.
BlockFi’s Financial Services
BlockFi launched as a simple Bitcoin savings account platform, which at the time was a groundbreaking idea. Unlike fiat currency, Bitcoin couldn’t be placed into a savings account where it could accrue interest. Fast-forward to 2021, and BlockFi offers the same financial services you would expect from a traditional fiat institution.
Leveraging Crypto Assets for Fiat
BlockFi offers a loan service for their users where they can leverage their crypto for USD. This is different from selling your assets for fiat because the coin is still accessible to you after paying off the loan. With Blockfi’s loan service, users can use their crypto holdings as collateral for a loan in USD that’s accessible the same day that the collateral is received by BlockFi, offering quick access to fiat without having to sell your cryptocurrencies. At the time of writing (April 2021), Blockfi gives loans at a 50% loan to value ratio (LTV). This means that whatever the value of your loan is will need crypto collateral that’s worth twice as much. So, if you were to take out a loan for $10,000 today, you would need to place crypto worth $20,000 as collateral on a 12-month term. BlockFi allows for flexibility in paying off loans with rates as low as 4.5% APR. You can pay off your loan through many smaller payments or wipe out the entirety of the balance all at once. BlockFi doesn’t charge prepayment fees or penalize you for how you pay off your balance as long as it gets paid for the total amount and on time.
While this loan service is easy to access, it does have a level of volatility to it. Since the price of crypto fluctuates often, it’s essential to keep track of your collateral’s worth, so it doesn’t fall below the 50% LTV ratio; otherwise, you could lose access to your loan. If you decide to take out a loan, be prepared to deposit more crypto as collateral if there’s a significant price change in the market.
BlockFi also supports buying and selling major cryptocurrencies and stablecoins using your BlockFi account. BlockFi has a smaller number of available cryptocurrencies than other mainstream exchanges like Coinbase and WeBull. Only BTC, ETH, LTC, and PAXG can be bought or sold along with stablecoins like USDC, USDT, GUSD, and PAX. But, what BlockFi lacks in variety makes up for with features like instant transactions, competitive pricing that matches or beats its competitors, and immediate accrual of interest once your coins are deposited.
Trading is quick and easy to set up. All you need is to sign up for a BlockFi account and fund it to buy any of these cryptocurrencies or stablecoins. After that, you can trade them and sell them all from your secure account. It’s even possible to trade and track your coins through the BlockFi mobile app, so you never have to worry about being away from your crypto.
The BlockFi Mobile App
BlockFi offers a mobile app that’s available on both iOS and Android devices so you can access your crypto on the go. With the app, you can create and manage your BlockFi account, view your balance, buy and sell crypto, and borrow money just like you can on their desktop platform. The app has a sleek and straightforward design entirely independent of the desktop website, meaning you don’t even need to have a computer to access BlockFi’s full functionality. With the BlockFi app, you’re in complete control of your account no matter where you are.
The BlockFi Bitcoin Rewards Card
Believe it or not, BlockFi is currently taking preorders for access to a credit card with Bitcoin Rewards. The Bitcoin Rewards Card will work as a traditional credit card and give users access to a credit limit in USD, which they can spend each month. Timely payments will also prevent any interest from being charged for the balance, and each transaction will give 1.5% cashback placed in your BlockFi account in the form of Bitcoin.
New users will pay an annual fee of $200, but right now, BlockFi has announced that if you spend $3,000 within the first three months, you’ll get a $250 bonus in Bitcoin to help offset this.
This innovative idea not only fills a void within the crypto-financial industry but offers lucrative rewards that fiat credit cards cannot match. The 1.5% cashback means that you will earn 1.5% back on every purchase in Bitcoin. This means that you never have to stop earning Bitcoin, even at the grocery store or when you’re filling up gas. BlockFi’s Bitcoin Rewards Card is great for anyone looking for a credit card backed by crypto instead of fiat.
While the card isn’t available yet, a post from March 2021 on BlockFi’s website has outlined how it will work and offers a link to their waitlist. Getting on it is pretty simple. All you need to do is sign up for a BlockFi Interest Account, complete your profile, make a deposit, and then you’ll be able to sign up. Once the card launches, we expect that process will be the same. We also suspect that it has the strong potential to be a sought-after product based on the features that it offers. And its sturdy metal design could make it more challenging to produce, which could cause shortages. Because of this, it certainly would be worthwhile to order one sooner rather than later if you’re interested.
BlockFi’s Institutional Services
While BlockFi is a tool marketed for the individual trying to make safe and secure streams of revenue with their crypto, it has been making strides to bridge the gap between institutional finance and cryptocurrency. BlockFi advertises the same secure crypto trading, returns on investments, and loans that large institutions expect to make safe investments.
BlockFi has been shoring up its lending inventory and gained institutional backing to make it an enticing financial tool for institutions looking to get into crypto or want a better tool to manage it. This, alongside enterprise-grade regulatory compliance, makes BlockFi a legitimate option to offer traditional financial services to large crypto-based traders and companies.
Right now, investment funds, crypto-based businesses, and market makers work with BlockFi for loans, storage, and gaining secure streams of revenue backed by crypto. These include large institutions like Akuna Capital, CMT Digital, the HashKey Digital Asset Group, Morgan Creek Capital Management, Susquehanna, and Valar.
BlockFi’s Bitcoin Trust
In January 2021, the U.S. Securities and Exchange Commission (SEC) received registration from BlockFi for something labeled the BlockFi Bitcoin Trust. This could mean that a long-awaited Bitcoin exchange-traded fund (ETF) could be on the horizon. If the SEC approves this request, then the world’s first Bitcoin ETF could be launched by BlockFi, offering a new way to invest in Bitcoin for individual investors and institutions alike. The ETF would provide shares based on its Bitcoin-based holdings, making or losing money as Bitcoin rises or falls. If a BlockFi Bitcoin Trust is coming in the near future, that would be a big deal for the cryptocurrency community and be a significant step in crypto being recognized at the same level as fiat currency.
BlockFi Exclusive Benefits
Along with the secure financial features that BlockFi advertises, there are a few extra benefits that BlockFi users can gain access to when they sign up.
The first is a referral code that BlockFi’s users can give out and that you can use when signing up for an account. The benefit of being referred gives the user access to $250 in funds with a $100 transfer to their BlockFi account. This is large compared to comparable services like Coinbase, which offers a $100 bonus when you deposit $100, and fiat exchanges like Robinhood and WeBull, who instead give a few stocks which could be worth as little as a few dollars or as high as around $100. BlockFi has an advantage over other services in this regard, and new users can jumpstart the investment with a more significant cash infusion that can be used to trade or hold in their account.
BlockFi also takes many essential steps to secure your account and data when using their website and app. The first is BlockFi’s use of an HTTPS connection security certificate to prove that you are on BlockFi and not a fraudulent site. Once you register on BlockFi, you cannot continue until you open a secure link on your associated email, adding another layer of security that requires access to your email to use your account. It also uses your personal information to verify your identity and prevent imposters from using your account and funds through your name, address, date of birth, phone number, and social security number.
While it is undoubtedly anxiety-inducing to enter this personal information on the internet, BlockFi advertises secure encryption and storage of your personal information on par with major financial institutions and government services that require this same information. It would be best if you always exercised caution when any website asks for this information and always verify its authenticity before entering it. Once you’re verified with BlockFi, it will ask for a copy of your photo id for further verification and security before giving you access to its range of options for managing your crypto.
While BlockFi offers many features and ways to make money consistently, there are some fees. Unlike some lending and money management institutions, BlockFi has no hidden fees. Instead, every fee is listed on their website upfront. While trading cryptocurrency and stablecoins, depositing coins, or using the platform doesn’t come with a fee, there are fees for most withdrawals. This means that you can trade freely once your money is deposited into your account without having to worry about any fees.
BlockFi’s withdrawal fees vary based on the currency that you’re withdrawing. Here’s a list of fees that was pulled from their website:
- BTC: a 0.0025 BTC fee per withdrawal and 100 BTC withdrawal limit per 7 days.
- ETH: a 0.0015 ETH fee per withdrawal and 5,000 ETH withdrawal limit per 7-day period.
- LTC: a 0.0025 LTC fee per withdrawal and 10,000 LTC withdrawal limit per 7-day period.
- Stablecoins: a $0.25 fee per withdrawal and $1,000,000 withdrawal limit per 7-day period.
- PAXG: a 0.0025 PAXG fee per withdrawal and 500 PAXG withdrawal limit per 7-day period.
BlockFi also gives its users one free crypto withdrawal per calendar month and one free stablecoin withdrawal per calendar month. After you make your first withdrawal, you’ll pay the fees listed above per transaction, regardless of the amount.
Minimum Account Balance
While BlockFi used to have a minimum account balance to start earning interest, it no longer has one, meaning you can earn interest on your BlockFi account even if you have less than 1BTC.
While there isn’t an account balance minimum, there is a withdrawal minimum of 0.003 BTC and 0.056 ETH. If you withdraw an amount smaller than that, it will still go through but could take up to 30 days to process instead.
A Summary of BlockFi’s Features and Benefits
BlockFi offers a lot of tools on par with other financial institutions, but these are especially emphasized on their platform:
Full Control Over Your Account: Once you verify your identity and deposit your crypto or stablecoins on BlockFi, you are given full transparency and control over your account without any hidden fees or blocks.
Managing Your Funds Anywhere: The BlockFi mobile app allows you to access your entire account regardless of where you are, meaning you can trade, leverage, or track your holdings from anywhere.
Multiple Streams of Income: Whether you’re trading Bitcoin, Ethereum, or another cryptocurrency or stablecoin, BlockFi gives its users complete control over how they receive interest payments and trade or leverage their funds.
Maximum Security: BlockFi, like other trusted financial institutions, emphasizes your security. Using two-factor authentication, identity verification, and other security measures to protect your account so you can manage your crypto safely. BlockFi also uses Gemini’s custodial system to hold your money when you store it with them.
No Hidden Fees or Minimum Balances: With BlockFi, what you see is what you get, that’s shown with their features but also in their lack of ‘catches,’ hidden terms meant to get you to spend more money or sign up for something you didn’t see when researching it. The platform doesn’t charge hidden fees or require you to maintain a minimum balance to access its many features making it a safe and straightforward tool to manage your funds.
Deposit and Withdrawal Money with Ease: You can easily fund your BlockFi account on the desktop platform or from the app using your crypto wallet or bank account for fast and reliable transferring of funds.
How to Sign Up for a BlockFi Account
Creating a BlockFi account is similar to opening up an account with a fiat financial institution or exchange like Coinbase or Binance. You can open a BlockFi Interest Account if you are over 18. Most countries allow their citizens to sign up on BlockFi without any restrictions. BlockFi appears to enable users from most parts of the world except for countries sanctioned by the United States. In the past, users from New York, Connecticut, Washington, and the European Union were also blocked, but that appears not to be the case anymore.
Signing up is simple and can be summarized in five easy steps:
- Step 1: Download the BlockFi app from the App Store or on your Android Device.
- OR Visit https://app.blockfi.com
- Step 2: Create an account by giving information such as your full name, email address and by creating a unique and strong password. Also, use a referral code if you have one to gain $250 on your first deposit.
- Step 3: Verify your information through the KYC/AML process by providing proof of identity.
- Step 4: Use the Deposit tab to deposit funds into your account from your crypto wallet or bank account. Deposit $100 or more to claim your referral bonus.
- Step 5: Start earning interest on your account as soon as your money is added to your account. You can also use it as collateral to get a loan or trade for other approved cryptocurrencies and stablecoins.
After that, your account is set up, and you have full access to BlockFi’s many financial features and tools. BlockFi is designed to be straightforward, allowing even the new investor to thrive and start making money holding and trading crypto. As long as you can verify your identity and are 18 years old or older, you can create an account and start using BlockFi and earning interest.
It’s important to know what’s backing any institution or product that you trust with your funds, whether they be cryptocurrencies and stablecoin or fiat. Luckily, BlockFi’s backers and founders are well documented. BlockFi has received support from major groups in the crypto industry, including Capital Management, Coinbase Ventures, Galaxy Digital, Morgan Creek Capital Management, Susquehanna, Valar, and Winklevoss Capital. There are also plenty of smaller blue-chip venture capital firms backing BlockFi.
A report by the Block also states that BlockFi has over $8 billion in total client balances and more than 125,000 funded accounts as of the end of 2020.
From 2019 to 2020, BlockFi increased its total client balances by more than 30x and its number of funded accounts by 12.5x, going from only 10,000 funded accounts in 2019 to 125,000 in 2020.
Gemini also stores BlockFi’s accounts and their money. Gemini is one of the premier names in crypto storage and is known for its high level of security and high reputation that has been cultivated for years.
With this much backing from major firms and individual investors alike, many see BlockFi as the future of crypto finance. And the company appears to be one of the best options for funding, borrowing, and gaining returns on cryptocurrencies.
BlockFi’s Founder and CEO is Zac Prince, a man with experience producing quality tech startups before founding BlockFi. These include Admeld, which Google acquired, and Sociomantic, which DunnhHumby acquired. Prince also leads business development teams at Orchard Platform, a broker-dealer and the online consumer lender, Zibby showcasing his financial and banking experience.
There are other notable members of the BlockFi team, including Flori Marques, the Co-Founder, and SVP of Operations. Rene van Kesteren, (Chief Risk Officer), Mahesh Paolini-Subramanya, (Chief Technology Officer), Tony Lauro (Chief Financial Officer), David Spack (Chief Compliance Officer), and Adam Healy, (Chief Security Officer).
BlockFi’s headquarters is located in Jersey City, New Jersey, and it was founded in August 2017. Today BlockFi has offices worldwide, including ones in New York, Buenos Aires, London, Warsaw, Krakow, and Singapore.
You can contact BlockFi via:
- Phone: (646) 779-9688
- Support and Contact Info: blockfi.com/contact
While cryptocurrency, despite being a lucrative and popular form of currency, is very volatile and finding worthwhile and safe platforms to invest in is difficult. Based on BlockFi’s many features, straightforward service, strong backing from notable investment firms, and strong development and executive team, we feel worth considering. BlockFi has demonstrated that they have a commitment to serving the needs of their customers and have been transparent with its compliance with current regulations on the market so that its users know that it’s a platform that they can trust with its crypto. Signing up is simple and free, so anyone can see for themselves whether or not it’s a company that they want to do business with. And with new projects like the Bitcoin Rewards Card and BlockFi ETF on the horizon, there has never been a better time to get involved with BlockFi.
Before writing this, we researched BlockFi’s platform and spent some time using their services. This, along with the reviews, has shown that BlockFi offers safe and dependable returns for your cryptocurrency. While staking and swapping your crypto can offer lucrative rewards, nothing comes close to BlockFi’s reliable and stable returns on investments. Getting started with BlockFi sooner rather than later will pay dividends later on since its high APY will continue to compound over time. Whether you’re storing crypto for later use or looking to leverage it for fiat currency today, BlockFi offers the services you would expect from a reliable and popular financial institution.
To close, BlockFi is creating opportunities that no other companies are coming close to offering. The ability to earn interest on your cryptocurrency while keeping it in a digital wallet that you have constant access to. With their products such as loans, crypto trading, and more, their clients can connect their fiat and cryptocurrency to make it work for them in novel and profitable ways. BlockFi’s past innovations and upcoming projects make it a company to watch and get involved in the coming years.
Continued Reading: What is BlockFi?
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