BlockFi is a blockchain fintech startup that enables clients to save, borrow, and earn interest from their cryptocurrencies. The company offers four products, that are all geared to revolutionize the world of finance as we know it. BlockFi has raised more than $78.7 million from investor, making it one of the most valued crypto company.
In this review, we will look at how to invest in BlockFi and everything else you need to know about the company.
Quick BlockFi Review
- BlockFi was started in 2017 by Zack Prince.
- In the first few months, the company has more than $35 million of customer deposits.
- BlockFi customers can earn an annual interest rate of 8.6%.
- No minimum balance is required to have a BlockFi account.
What is Crypto Banking?
The cryptocurrency industry is seeing significant changes. The industry, which was started in the past decade, has become one of the fastest-growing industries in the world. Indeed, the number of people who have invested or who own cryptocurrency has continued to increase. Many retailers have also started to accept cryptocurrency.
At the same time, there are many developers who are coming up with products to take advantage of the blockchain technology. There are companies like Coinbase that have developed quality crypto wallets and Voyager that allow people to trade in cryptocurrency. Also, companies like Facebook and Square are coming up with blockchain-related products.
Another industry that is coming up is crypto banking. This is an industry whose goal is to disrupt the financial industry by coming up with an alternative bank. These online banks enable people to deposit, save, earn interest, and also borrow crypto. BlockFi is one of the best-funded and one of the best-known companies in the new industry.
What is BlockFi?
BlockFi is a startup that was started in 2017 to help crypto enthusiasts to save their cryptos and also borrow money. Today, the company offers 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 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 loans. The company extends loans that are backed by cryptocurrencies to customers. Crypto-backed loans 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 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.
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. 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. You can deposit by clicking the buttons shown below.
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.
How BlockFi Makes Money
BlockFi is pioneering a new way of virtual banking. 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.
How safe is BlockFi?
In recent years, we have heard stories about crypto that has been stolen. Billions of crypto have been stolen. We have also heard about crypto that has been lost because the user forgot the password. Therefore, a common question that we get is whether BlockFi is a safe way to invest.
Our research shows that BlockFi is a safe company. 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.
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 Loan Interest Rates
BlockFi offers an attractive 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.
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. he 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.
Final Thoughts: Is BlockFi Legit?
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.
Crispus is a finance professional with more than a decade experience in the industry. Over the years, Crispus has written in-depth articles on leading platforms like CCN, Marketwatch, and Seeking Alpha. He also runs a Forex education and managed account company called WestEndFx.