Although the hype surrounding cryptocurrency peaked just a few years ago, digital currency still has a strong following.
BlockFi is another platform that’s worth exploring in the crypto and blockchain game.
BlockFi is not another crypto trading platform. BlockFi does offer a higher rate of interest than most other savings accounts.
Although I have been reluctant to invest in cryptocurrency, it is still very interesting and I’ve done a lot of research on the subject lately. When I came across BlockFi, it only heightened my interest.
The BlockFi review below will cover the company’s offerings, how the system works, and more.
Quick Review: BlockFi offers a high-interest trading platform with solid crypto investment features. It gets a 7.8/10. Sign up here and get a deposit bonus of up to $250.
Table of Contents
What is BlockFi?
What does BlockFi offer?
What are the BlockFi fees?
BlockFi Features
The Pros and Cons Of BlockFi
Is BlockFi safe?
How do I open a BlockFi account?
What is BlockFi?
BlockFi allows you to earn interest from your cryptocurrency. This account is both an exchange as well as a high interest account. You can buy and sell cryptocurrencies and earn more interest than you would with a normal checking or savings account.
BlockFi was established in New York in 2017 by ZacPrince and LoriMarquez. The service is described as a wealth-management service that helps crypto investors earn interest. It aims to mimic the role of banks, but within the cryptocurrency industry.
The CEO is active on podcasts and social media. Members of the management team come from different backgrounds, including banking and crypto.
Investors include SoFi, Winkelvoss Capital and Galaxy Digital Ventures.
BlockFi Investments
You can add multiple crypto wallet addresses to your BlockFi account so that you can select which wallets you want when withdrawing cryptocurrency.
Each investor has their own unique wallet addresses to buy and trade crypto.
BlockFi stores all the crypto currencies in their exchange in a hardware wallet that is secure on the Gemini infrastructure.
What does BlockFi offer?
While I briefly mentioned their product offering, let’s dig a little deeper into their main features.
Earn Interest
BlockFi’s main product is a cryptocurrency account that pays interest. This account lets you earn interest on BTC and other cryptocurrencies.
You can convert USD into cryptocurrency if you do not own any.
You can choose the cryptocurrency that you’d like to receive your interest and then diversify between different types. BlockFi claims that you can earn annual interest rates of 8+%.
BlockFi has an entire article on how to earn interest with crypto.
Borrow and Hold
You can now use crypto to secure a loan if you need cash now or are looking for a way to borrow money. BlockFi allows you to borrow USD while using cryptocurrencies as collateral.
You can borrow 50% of the crypto value and use it for any purpose, including buying a home, paying a mortgage or anything else.
You can pay your entire balance or just a portion of it early when you borrow money from BlockFi. No prepayment fees or penalties!
The minimum amount of the loan is $5,000. It has a 12-month duration and an interest rate 4.5%.
Trade Crypto
BlockFi is also an exchange. You can use it to trade crypto. You can trade major digital currencies such as BTC, ETH LTC USDC USDT GUSD PAX PAXG PAXG, GUSD and USDT.
You’ll also earn compound interest as you trade. You can buy and sell cryptocurrency without losing out on currency gains.
When you trade with BlockFi, the only thing you pay is the displayed price for each trade.
What are the BlockFi fees?
BlockFi allows you to withdraw your money any time. However, BlockFi provides one withdrawal free per month. BlockFI will charge a flat fee for withdrawals after that period.
The following is a list of their total fees, taken directly from their site (which could change in future).
BTC100 per 7-day period0.0025 BTC
ETH5,000 per 7-day period0.0015 ETH
LTC10,000 per 7-day period0.0025 LTC
Stablecoins1,000,000 per 7-day period$0.25 USD
PAXG500 per 7 Day period0.0025 PAXG
Also, there are withdrawal minimums. You must withdraw at least 0.003 BTC or 0.056 Ethereum. The withdrawal period is seven days, but they usually only take 24 hours.
BlockFi Features
What makes BlockFi a good investment platform? Here are some of the main features you might find appealing.
BlockFi app
BlockFi has launched an app that allows you to trade cryptocurrency, track interest rates and account rates and even take out loans from your phone.
The app is available on Google Play as well as the Apple Store.
No Deposit or Balance Required
BlockFi accounts can be opened without any minimum deposit. You’ll receive better rates of interest if you deposit more, but this is not mandatory.
You can test the waters with a small sum of money before investing more.
Bitcoin Rewards Credit Card
BlockFi will release its credit card in 2021, not 2020. You can earn 1,5% in bitcoin for every purchase you make with the card. This is the very first card of its kind. It is an interesting feature that is sure to appeal to many people.
Insurance
BlockFi is a company that wants to protect its users’ money and data. The company provides insurance against cyber security breaches, including data breaches.
The company also works with some of the most famous names in the industry and follows the U.S. regulations to ensure that everything is legal and done according to protocol.
Interest Rates
The interest rates you can earn on your digital currency are very attractive. There are some things to be aware of.
These interest rates vary depending on which coin you invest in and in what tier. This is an excerpt from their website.
BTC (Tier 1)0 – 2.56%
BTC (Tier 2)> 2.53.0%
ETH > 0 5.25 %
LTC > 0 5%
USDC > 0 8,6%
GUSD > 0 8,6%
PAX > = 0 8.6%
PAXG > 0.5%
USDT > 0,93%
The Pros and Cons Of BlockFi
You’ll find pros and cons with any financial platform. BlockFi is not any different.
The pros and cons will depend on how you personally use cryptocurrencies, and what your opinion is.
Pros:
You can earn interest on your money if you leave it in a crypto-exchange. Even if you earn 0.1 BTC in interest, it’s a substantial amount of money when converted to dollars.
If interest rates change, BlockFi will give you a one-to-two week notice. This gives investors time to prepare for the changes and withdraw their cryptocurrency if they wish to.
No penalty for withdrawal: You are free to withdraw your crypto whenever you want and will not be charged a fee.
No minimum balance required: You won’t be forced to deposit a certain amount to earn interest. No one will stop a $1 deposit!
Trading fees are zero: You can trade between different cryptocurrencies without paying any fees.
Cons:
Hard wallets are better than crypto exchanges. There is always the risk of a hack. If you want to attract interest, you should put your crypto on an exchange.
Interest is only paid once a month. This may seem infrequent to some traders. It may seem like a long period of time because many competitors offer weekly or daily payouts.
High withdrawal fees. Although BlockFI provides many features free of charge, its withdrawal fees are high when compared with competitors.
BlockFi does not offer FDIC insurance or SIPC protection.
Is BlockFi safe?
BlockFi is an exchange and deposit platform that’s safe. Gemini is its primary custodian, a licensed financial institution regulated by NYDFS. 95% of assets remain in cold storage, which means they are offline. 5% of the assets are stored in hot wallets that are insured by AON. Deloitte recently conducted a Type 1 Compliance Audit.
BlockFi has also been backed by well-known firms such as Coinbase Fidelity, Morgan Creek. They also use comprehensive risk analysis and management for any institution investors who may default on their loans.
Has BlockFi been hacked?
In May 2020, hackers compromised the BlockFi systems for just over an hour, gaining unauthorized access to names, emails, birth dates and addresses of users, as well as their activity history. No funds, social security number, or financial data were lost.
Unfortunately, hackers and data breaches are often the target of cryptocurrency and financial institutions. BlockFi immediately logged the incident and implemented additional security measures in order to prevent it from happening again.
How do I open a BlockFi account?
It is very easy to open a BlockFi account. To get started, you’ll need to have a few items.
You can open a BlockFi account by visiting the website. Click the “Get Started’ button at the top-right.
You’ll be asked to fill in some basic information for the account creation.
BlockFi Sign Up
Then you’ll be asked to upload a picture of a valid ID. For financial records and to verify that you are who you claim to be. BlockFi will typically approve your account within minutes.
After you have opened an account, you are able to set up your bank and immediately transfer funds via ACH. There is a $500 daily deposit limit for new accounts and $1,000 for established ones.
BlockFi says that it may take five business days for your deposit to be cleared. Then you can invest in digital currency!
