BlockFi is a fintech platform that enables clients to save, borrow, and earn interest from their cryptocurrencies. In this BlockFi review, we will look at how to invest in BlockFi and everything else you need to know about the company.
Quick BlockFi Review
- Customers can earn an annual BlockFi interest rate of 8.6%.
- No minimum balance is required to have a BlockFi account.
- BlockFi offers a platform where customers can trade cryptocurrencies.
- 1 What is BlockFi?
- 2 BlockFi Features
- 3 BlockFi Products
- 4 How BlockFI Works: How to Invest in BlockFi
- 5 How BlockFi Makes Money
- 6 Is BlockFi Safe? Is BlockFi Legit?
- 7 BlockFi Loan Review
- 8 BlockFi Interest Rates
- 9 Pros of Using BlockFi
- 10 BlockFi Available Countries
- 11 Alternatives for Full Crypto Banking
- 12 Final Thoughts on BlockFi
- 13 More Information About BlockFi
What is BlockFi?
BlockFi is a startup that was started in 2017 to help crypto owners to save their cryptos and also borrow fiat currency using their cryptocurrencies as collateral.
Is there a BlockFi Wallet? BlockFi offers a Wallet Address Book that provides BlockFi clients the opportunity to pre-select and save your frequently used crypto wallet addresses.
- No taxation on crypto gains. The IRS defines cryptocurrency to be a property and for any gains, you have to pay a crypto tax. When you sell your cryptocurrencies, then you have to pay capital gain tax. However, when you lock your cryptos with BlockFi, you do not have to pay the capital gain tax.
- It can support different cryptocurrencies. BlockFi supports various crypto assets. Among them are Ethereum, bitcoin and Gemini Dollar. You can deposit these cryptocurrencies or use them as collateral for the loan.
- No minimum deposit. Initially, when BlockFi was launched, it had a minimum deposit of 0.5 BTC, 25 ETH, or 2,500 USD. However, since September 2019, the minimum deposit amount was scrapped.
- Savings accounts are available worldwide. BlockFi savings accounts are available to people aged 18 years and above worldwide. However, the accounts are not available to people within the EU or states of New York, Connecticut, and Washington. Also, they are not available in countries sanctioned by the United States, UK, and EU.
BlockFi offers the following four products.
BlockFi Interest Account (BIA)
BlockFi interest account (BIA) is a savings account where you can save your crypto and earn interest. The goal of this account is to discourage people from storing their crypto in a cold wallet or hard wallet without earning any interest. This is equivalent to an interest-earning savings account in traditional banks. The screenshot below shows how a BIA compares to other similar accounts.
BlockFi Crypto Loans
Another product offered by BlockFi is crypto backed loans. The company extends loans that are backed by cryptocurrencies to customers. Crypto-backed loans such as the ones offered by Unchained Capital are relatively easy to understand. Customers who own crypto can easily deposit in BlockFi and borrow fiat currency against this crypto. This is done by people who believe that the value of crypto will continue soaring. The screenshot below shows how a crypto loan works.
BlockFi Referral Code
- For every new friend that signs up using your unique BlockFi referral code and deposits $100+ worth of crypto to their BlockFi Interest Account, you and your friend will each earn a one time bonus of $10 in BTC. Join BlockFi referral program to get your BlockFi referral code.
BlockFi Crypto Trading
BlockFi offers a platform where customers can trade cryptocurrencies. The platform has all the tools you need to analyse and initiate crypto trades. The screenshot below shows how BlockFi trading works.
BlockFi Institutional Services
In addition to the above three products, BlockFi also offers other institutional services. These are customized lending and custody. In February, 2021, BlockFi launched BlockFi Bitcoin Trust, an investment vehicle for institutional investors seeking to invest in Bitcoin.
How BlockFI Works: How to Invest in BlockFi
The process of investing in BlockFi is relatively easy. First, you need to click the Get Started tab on the home page, blockfi.com. You can also do it on BlockFi app for iOS and Android. You can click the login button if you are already a customer. This will take you to this sign-up page where you will be required to enter your details. The details that are required are your name, your email address, and the type of account you are creating.
We recommend that you read the terms and conditions that are available on this page. You will then be required to enter a verification code that is sent to your email address. You will then be taken to a dashboard where you are expected to fill your information. You can now deposit your fiat or cryptocurrency after you complete the account verification process.
After you deposit your crypto, you will start earning interest every month. The company is able to provide interest because it lends your saved crypto to other people who pay with an interest.
BlockFi Credit Card: Join BlockFi Bitcoin Rewards Credit Card waitlist. The BlockFi Bitcoin Credit Card replaces the traditional cash-back system.
How BlockFi Makes Money
The company earns money in the similar way to the traditional banks. It makes money by lending out money to borrowers. It takes money that is saved by savers and gives it to people who are borrowing. It then makes money from this interest. The benefit of this is that the loans it gives out are relatively safe because they are usually backed by crypto like Bitcoin, Ethereum, and Litecoin.
Is BlockFi Safe? Is BlockFi Legit?
We strongly advise you to take extra precautions when investing in BlockFi. In June 2022, the company secured a $250 million loan to boost its balance sheet following the recent crypto market downturn. Many crypto lending fintech are experiencing liquidity problems. In July 2022, Celcius Network, the crypto lending platform, filed for bankruptcy. It suspended withdrawals in June 2022. You are also advised not to invest into cryptocurrency more than you can afford or willing to lose. Generally, it is advisable not to invest more than 10% of your funds into crypto.
In recent years, we have heard stories about crypto that has been stolen. Billions of crypto have been stolen. We have also heard about some altcoins/shitcoins have lost 99% of their value. Therefore, a common question that we get is whether BlockFi is a safe way to invest.
Our research shows that BlockFi is a legit. It stores the crypto in Gemini, which is the leading licensed crypto custodian in the United States. Gemini is the company that was founded by the Winklevoss twins. In addition, BlockFi allows 2 factor authentication. This helps to ensure that the accounts are safe.
BlockFi Loan Review
Types of Loans Offered by BlockFi
BlockFi offers all types of loans provided that the user has provided a collateral. The most common type of loans that are offered are home loans, auto loans, emergency health loans, travelling loans, and loans to pay credit card debt among others.
BlockFi Interest Rates
With BlockFi savings account, users can make up to 6.2% annual interest of their bitcoins. They can earn up to 4.4% annual interest on Ethereum deposits and up to 8.6% of their Gemini dollars. As the terms and conditions say, the company can tweak these interest rates at will.
BlockFi Stock: Can I invest in BlockFi stock? Not at the moment but possibly soon. BlockFi CEO Zac Prince has revealed that the firm could go public as early as the second half of 2021. Coinbase was the first U.S. crypto company to be listed on the Nasdaq stock exchange.
Pros of Using BlockFi
There are several benefits that you get when you are using BlockFi services. These advantages are:
- No credit check. BlockFi does not check your credit score. It does not need to because all loans are backed by real assets.
- Fast disbursement. The process of taking a BlockFi loan is relatively faster.
- No early payment penalty. BlockFi does not charge a penalty when you pay money early.
- Safe company. BlockFi is a safe company that has not been reported for having any security lapses.
- Crypto is safe. If you are a believer in crypto, BlockFi gives you access to funds without risking your crypto holdings.
- Minimum balance. BlockFi does not have a minimum balance requirement.
BlockFi Available Countries
BlockFi interest accounts are available worldwide in any country that is not sanctioned by the U.S., the U.K. or EU. BlockFi loans are available in 47 states in the U.S.
Alternatives for Full Crypto Banking
If you want full crypto banking services, some of the alternatives are:
Final Thoughts on BlockFi
BlockFi is not the only company that offers these savings and investment products. There are other companies like CoinLoan, Nexo and Coinbase that offer similar products. Still, if you are looking for a company to save and borrow your crypto, you can consider using BlockFi. It is a company that is backed by high-profile companies like Susquehanna and Valar. It also has a long track record of success. Still, we recommend that you check the interest rates if you are borrowing the funds.