August 2022 guide to BlockFi products

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inance, Coinbase, or Gemini user base keeps growing with new users, as for many people these are the go-to cryptocurrency exchanges. But their incredible complication often misleads beginner-level investors due to the sheer market size. And you are going to spend a significant amount on transaction fees and additional charges to make the trade.

Many crypto enthusiasts even look for costly loans from crypto deposits to meet their respective needs. It often demotivates and possesses severe financial problems for low-budget and short-time investors.

Not many effective ecosystems are in business to provide good interest rates on the deposits. But BlockFi gives the less-informed investors with low budgets an opportunity to make a fortune in cryptos. It offers products and services designed to serve intriguing purposes with optimum perfection.

What is BlockFi?

BlockFi is a whole crypto ecosystem consisting of an exchange platform, interest-bearing accounts, and low-interest loans. It charges no transaction fee while doing your business, making it an excellent choice for newbie investors. Also, there are no hidden fees or minimum balance issues to halt your intended transaction.

A BlockFi account holder can exchange regular currencies for cryptocurrencies that are available in the ecosystem. You can choose between several well-established cryptocurrencies to make the exchange. The crypto custodian even allows the clients to take interest-based loans in US dollars against their crypto assets.

BlockFi is great for reducing the gaps between traditional finance and the current crypto transaction system. Beginners don’t have to worry about hasty transaction fees to make their initial investments. Even many intermediate investors have been fond of BlockFi due to its considerable advantages the features.

Therefore, you can learn a lot about crypto trading from short-term investments. But advanced ones often find it unsuitable for its limited coin availability. There’s no way to make a bulk purchase in BlockFi. Exchanges like Coinbase, eToro, or Gemini can offer almost limitless coins for a high-amount investment. 

What is the history of BlockFi?

Flori Marquez and Zac Prince were credited with founding BlockFi in August 2017. And it bases in Jersey City, New Jersey, in the USA. It soon gained attention across the US and even overseas with high-yield interest rates. The clients were happy to invest in the platform, but their method went against the US SEC rules.

However, the ecosystem had to take action to resolve the issues associated with their lent services. But it wasn’t any problem for regular and low-budget investors who intended to take services long-term. Investors/analysts find BlockFi suitable for making profits from value growth on long-term investments.

The Securities and Exchange Commission (SEC) had to sue the company for not registering thier products. Recently, the ongoing dispute for registering retail crypto lending products was settled in February 2022. They had to pay $50 million fines to the SEC alone and an additional $50 million to 32 states in the USA.

Also, the settlement required the company to halt its offered services and products to anyone in the US. It’s applicable for new clients of the ecosystem currently in the US or US citizens. Even the existing US clients or ones inside the US cannot transfer their assets to their BlockFi Interest Accounts (BIAs).

It’s currently working to make the alleged retail crypto lending products registered under the SEC rules. But making the products in line with the regulations and their businesses may take some time. Registering under the appropriate statutes should let BlockFi release its services to US clients again.

The company signed a deal with FTX, another crypto exchange, on June 30, 2022. The agreement gives FTX an option to buy BlockFi for a maximum price of $240 million. The dealing price on the agreement had no least or minimum buying limit. And the deal is done based on BlockFi’s specific performance targets.

Despite the problematic issues, the platform still sticks to the current transaction approach. Lots of investors admire the simpler crypto trading facility. Especially, the way to fold its possible transaction fee is almost second to none. Hence, it remains the most beneficial point for the company to this date.

What is the BlockFi interest account?

An interest-bearing account in BlockFi is called BlockFi Interest Account or BIA. You can earn interests on the invested cryptocurrency without requiring any minimum balance. However, the circulating coins on the platform are considerably limited for purchase.

The available cryptocurrencies for trading through the ecosystem include –

    • Bitcoin (BTC)

    • Ethereum (ETH)

    • Litecoin (LTC)

    • Bitcoin Cash (BCH)

    • Uniswap (UNI)

    • Algorand (ALGO)

    • ChainLink (LINK)

    • PAX Gold (PAXG)

    • Basic Attention Token

    • Tether (USDT)

    • US Dollar Coin (USDC)

    • Binance USD (BUSD)

    • Gemini (GUSD)

    • DAI (DAI)

    • Paxos Standard (PAX)

There are certain withdrawal limits and specific withdrawal limits for every crypto. Also, the interest rate varies as per the company policy. However, the current interest rates may change at anytime without prior notice.

Please understand that BlockFi interest-related transactions are no longer available for US clients. But the standard crypto wallet service to trade digital assets are still available for every BlockFi user.

Instead of transaction fees, there is the cost of spreading of difference between the cost and your payment. BlockFi bakes this spreading price into the listing, and the charges may look higher than other exchanges.

Also, the price you’ll see listed on the platform can vary from the actual price due to extreme volatility. You better take notes of value differences to ensure a profitable transaction through the pricing stats.

How much can I earn from BlockFi?

The following table lists products that pay interest on a flexible terms basis:

What does BlockFi offer?

The company is both an exchange and a custodian at the same time. There are many great things about choosing this ecosystem as opposed to others. Advantages which  are aimed to attract beginner-level investors would include –

    1. BlockFi Wallet

It’s a somewhat recent addition to the platform to increase client transaction efficiency. Users can receive, store, buy, sell, and trade Bitcoin, altcoins, and stablecoins. Also, the wallet can hold your crypto tips from the BlockFi Reward Credit Card.

However, no interest is available in putting, having, or storing the cryptos in your wallet. In simple words, the wallet is more like a regular bank’s saving account. You must keep the assets in a separate Interest Account to get the interest. 

    2. Crypto Loans

You can get loans in US dollars against your current wallet’s or account’s crypto balance. The minimum loan amount as of writing the article was $10,000 US. Its loan-to-value (LTV) ratio of 50% indicates that 50% of the deposit is to be considered collateral.

BlockFi supports only 3 major cryptos against all tradable coins – Bitcoin, Ethereum, and Litecoin. The 12-month loan period comes with an interest rate varying from 9.5% to 4.5%. Also, you’re subjected to pay additional origination fees on certain conditions.

    3. BTC Rewards

The ecosystem has been offering users a Bitcoin Rewards Visa Credit Card for some time. It shares considerable similarities with modern-day cashback credit cards. But BlockFi Visa Card will get your cashback on Bitcoin instead of regular bank currencies.

The system is currently set to back a 1.5% reward rate in BTC on every purchase with the card. Spending over $30,000 BTC in one year will take the cashback or BTC-back to 2.0%. Also, its cardholders may earn up to 10% in cryptocurrency rewards at thousand brands.

    4. Bonus Offers

The platform even runs multiple bonus offers from time to time for a limited time. It keeps the users engaged, active, and satisfactory. New clients can get a certain amount of USD to continue their journey. Referring to a friend can also add some credits to utilize the rewards for later conversion and trading.

How to use BlockFi?

Visit the official website www.blockfi.com to access the login page for opening a personal account. You must upload a clear and full picture of the identification documents. In most cases, submitting your application should get approved by the authority within minutes.

Linking your bank account is available right after your account’s activation. You can transfer funds to the account through ACH or Automated Clearing House. However, making direct deposits can take up to 5 business days, depending on some facts.

The daily limit is $500 for new accounts and $1,000 for established ones. You can find, check, and purchase the supported cryptocurrencies within the ecosystem. BlockFi has plans to increase the limits to allow bulk trades in the future.

Interest-related transactions are only available with the BlockFi Interest Account (BIA). You need to fill up another form to become an interest-bearing account holder. Opening the account will make you eligible to achieve interests or take loans.

How to trade in BlockFi?

Trading cryptocurrencies through BlockFi is simple, intuitive, and engaging for almost everyone. You can access the online dashboard while using the platform from a browser. Also, a free smartphone app is available on the Play Store for installation and use.

Logging into the account from a web-based portal or the app will give you the details. The summary includes total interests paid on your current holdings and the account balance. Also, you can access different tabs to initiate a trading or loan-related action.

You can set the trades daily, weekly, monthly, and even half-monthly. The inclusion of the automated recurring trades makes BlockFi stand out among competitors. Users with BIA can set the recurring trade intervals to make crypto transactions.

Is BlockFi safe for my investments?

Sending US dollars to BlockFi converts the currency to a USD-based Stablecoin (USDT or USDC). Stablecoins are designed to follow as closely as possible to a 1:1 ration against the USD. You’re actually using the Stablecoin to purchase other cryptos using the personal account.

BlockFi holds your assets through trusted and regulated third parties like Gemini. Their partnership with leading crypto companies in the industry gains special security measures. A featured 2-factor authentication and the approved wallet address to make withdrawals confirmation complete protection.

It effectively reduces the chance of getting hacked by anonymous, white-listed addresses. Furthermore, your deposited cash is no longer traceable USD in the BlockFi system. The money exchanged for Stablecoins introduces completely secure and anonymous digital transaction from thereon.

However, your entire investment cuts ties with FDIC and SIPC insurance. The Federal Deposit Insurance Corporation (FDIC) and the Securities Investment Protection Corporation (SIPC) are in charge of securing investment money in any case. But your money goes out of their jurisdiction through BlockFi.

How is BlockFi’s customer service?

There are different options available on-site to support the customer. You can submit a ticket, chat from the chatbot, or talk with a representative over the phone. Live Chat and Phone service are available from 9:00 am to 8:00 pm EST, Monday to Friday.

You’ll find direct answers to some of the more frequently asked questions from the help center. It segregates the issues based on their product categories. An additional section, ‘Resources’, is on the top and bottom of its homepage for your information.

Conclusion

BlockFi is ready and waiting to take your trade experience to a newer level with its friendly services. Any beginner and intermediate investors will find it difficult to find an outmatching virtual ecosystem. This one keep profits considerably low while providing the best trading and lending services. Staying aware of its few drawbacks can unlock the full potential of your investment for more profits.

BlockFi FAQs

Jonathan

An editor at Coincrop

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Jonathan is a Crop Crop staff writer based in the UK, covering the best rates for cryptocurrency earning and borrowing products. When not at work, he's likely sailing.