In today’s economy, people are looking to save money in whatever method they can. Traditional savings accounts are one option, but most savings accounts barely top the 1.0% APY rate.
Cryptocurrency is on the rise, and there are companies out there that allow traders to capitalize on the asset. However, with so many out there, it’s hard to know which company to choose.
The Stock Dork reviews these companies from top to bottom and shares our insights with you.
Check out this BlockFi review to see if the platform is right for you.
BlockFi Review: Overview
BlockFi is a cryptocurrency service that lets you store crypto, get a high interest rate, and take out USD loans against your cryptocurrency. The company was founded in 2017 and is based out of New Jersey.
The crypto service has managed to raise over $150 million up to a Series C and has been working to make its crypto technology more accessible to people around the globe.
BlockFi lets you create a trading account for buying and selling cryptocurrency. The company makes money by loaning out your crypto and through withdrawals.
What is BlockFi?
BlockFi is a neat take on the savings model that allows you to save money in cryptocurrencies and get a favorable interest rate. The platform currently allows you to yield up to 8.6% annually on your money, which is nearly eight times higher than the best high-yield savings accounts.
The service works just like a standard bank. For example, with a 6% compound interest rate, if you deposited 1 BTC, one month later you would have 1.06 BTC in your account.
Each account is compound monthly to maximize profit potential. It’s possible to add more crypto at any time to boost the amount that gets compounded.
In addition, users can take out loans against your cryptocurrency in USD denomination. BlockFi allows you to put crypto assets up as collateral at interest rates as low as 4.5% APR.
How Does BlockFi Work?
The service is straightforward at its core. It is basically an ultra-high-yield savings account for cryptocurrency. With a BlockFi account, you can turn your money into crypto, deposit it and gain a very high interest rate, then convert that crypto back into cash when you need it.
Like a regular bank, BlockFi earns interest on your savings by loaning it out to other institutions. In addition, the company lends overcollateralized crypto assets to make sure that its loans are backed.
The crypto in your account is subject to the same ups and downs of the market, so there is the potential to lose money if a cryptocurrency you’re invested in suddenly takes a dive.
BlockFi also has trading accounts for cryptocurrency, so users can buy and sell currencies with other traders. Trading is instant, and you get immediate interest accrual on trades.
Currently, users can use BlockFi to trade in BTC, ETH, LTC, PAXG, and USD-backed stablecoins.
Is BlockFi Legitimate?
BlockFi has been in business since 2017. They are licensed and regulated by the SEC, and they follow all legal regulations when it comes to trading cryptocurrency and issuing loans.
The company also takes great pains to protect your personal information. For example, they employ 128-bit encryption accounts and offer extra security features such as 2-factor authentication.
Unfortunately, BlockFi accounts are not FDIC or SCID insured, which means it’s not as safe as investing in a bank. BlockFi’s custodians do keep most funds in cold storage, so they are out of sight offline.
BlockFi Products & Services
Here is a quick rundown of the products and services BlockFi offers
BlockFi Interest Rates
BlockFi’s premiere features are their interest accounts, which are basically savings accounts for cryptocurrency. BlockFi lends out your currencies and pays you interest, just like a regular bank does with savings accounts.
Interest rates depend on the currency and change daily. At the time of writing, BTC has a 5% APY, and ETH has a 4.5% APY. The highest rate crypto is currency USDC with an 8.6% interest rate.
There is a small fee for withdrawing from this account.
BlockFi allows you to take out loans with your crypto assets as collateral. You can borrow against your crypto assets with APR as low as 4.5%. This allows you to effectively turn your crypto into cash without having to sell it.
The platform allows you to receive your funds the same business day, and there are no early pay-off penalties or fees. BlockFi lets users borrow up to 50% of the value of their crypto assets.
Margin calls happen at 70% loan to value (LTV), after which the borrower has three days to post more collateral or pay off a portion of that loan. If LTV hits 80% or more, BlockFi will liquidate a portion of the loan.
BlockFi trade is a cryptocurrency marketplace where you can buy and sell assets with other traders. This feature allows instant trades and offers better pricing than competitors.
The service also allows you to get immediate interest accrual on your trades. BlockFi trade accounts let you set up recurring transactions and accept BTC, ETH, LTC, PAXG, and USD-backed stablecoins.
Keep in mind that trading fees and interest rates vary depending on market conditions. At the time of writing, BTC is trading with an APY of 5%. It is also possible that market conditions might affect your ability to buy and sell assets at a given point in time.
BlockFi Credit Card
With the BlockFi credit card, you get unlimited 1.5% crypto back for every purchase that you make. You can earn up to $750 or more in bitcoin rewards.
Each card has a USD limit. You get instant crypto back on your purchases, deposited directly into your BlockFi account. You start to accrue interest on these rewards too.
BlockFi credit cards can be used anywhere Visa cards are accepted.
The credit card comes with some notable benefits too.
You get a $250 in bitcoin sign-up bonus for spending $3,000 in your first month. You’ll also get a special 3.5% bitcoin cashback reward during months four to six of owning a card.
BlockFi will also give you $30 in bitcoin for every client referral.
BlockFi Business Accounts
BlockFi also offers institutional services to bridge the gap between trading and market makers in the crypto industry. The company uses its lending inventory to give institutional backing and has enterprise-grade regulatory compliance.
With a business account with BlockFi, you get customizable lending, borrowing, and financing for any kind of company. BlockFi also has the backing of some of the biggest names in the investment industry.
BlockFi Cancellation Policy
If you want to cancel your Blockfi account, you can request a support ticket so that the team can assist you.
Expect to pay withdrawal fees for removing your crypto from BlockFi’s custodians.
How Much Does BlockFi Cost?
It is free to make a BlockFi account, and there is no monthly fee for having an account. BlockFi also does not have a minimum deposit, so there is no required amount to open an account.
BlockFi mostly makes money through lending your cryptocurrencies and charging fees on withdrawals. You have a limited number of withdrawals per month and a fee for each type of cryptocurrency.
Fees for withdrawals change daily but are usually very low compared to other crypto brokerages.
BlockFi trade also has fees for each transaction you perform. Fees change from day to day, but they are normally very low.
BlockFi Pros & Cons
BlockFi was a lot of cool features working for it. That being said, there are a few things to watch out for. Here are the pros and cons of the service:
- Very high interest rates
- Easy to use
- Loans with low interest
- No minimum deposit
- No monthly fees
- Trading platform
- U.S. based and regulated
- Accounts are not insured
- Rates change daily
- Limited withdrawals
Is BlockFi Right for Me?
BlockFi is designed for anyone with an interest in cryptocurrency. With no minimum investment and no monthly fees, even traders with the smallest amount of crypto can get started with BlockFi.
If you already have a decent amount of assets in cryptocurrency, BlockFi can help take your earnings to another level with their extraordinarily high interest rate.
The company’s loan service, trade platform, and other features work well in supporting traders for the long haul.
Traders will have to keep a watchful eye on crypto prices, as huge dips can wreak havoc on investment accounts.
BlockFi Reviews from Users
BlockFi currently has a 3.8 out of 5 rating from over 100 reviews on popular review site Trustpilot.
The majority of reviewers claim that BlockFi has reasonable fees and that they appreciate how responsive the platform is to changes in market conditions. A number of reviewers also praise how simple it was for them to move their assets into BlockFi from other platforms.
The biggest criticism is that the app currently does not have support in any language other than English. Another common complaint is that withdrawing funds can be a difficult process that takes a lot of waiting. Some people also mention the UI occasionally bugs out and crashes unexpectedly.
Final Review: Is BlockFi Worth It?
If you already have some crypto assets and do not mind a little bit of risk with your accounts, then BlockFi might be worth checking out.
The service is quite simple to use, and there’s no need to be a cryptocurrency expert to use it.
With a great interest rate, excellent loan terms, and a unique way to make your savings work harder for you, you may just want to give BlockFi a closer look.