BlockFi vs CoinRabbit Comparison
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An editor at Coincrop
29 Sept 2022 | 22 min read
f you're like most people, you probably consider cryptocurrencies to be a speculative investment, something to buy and sell in the hopes of making a quick profit. However, you may be unaware that you can earn interest on your cryptocurrency holdings.
Like a bank savings account, you can keep your digital currency in a wallet and earn interest on it over time. Of course, there's more to it than that.
In this article, we'll go over everything you need to know about earning interest on your cryptocurrency assets, including how it works and what you should be aware of before you begin.
So, whether you want to earn a little extra money on your digital currency holdings or you're just curious about how this process works, keep reading to find out everything you need to know.
BlockFi vs CoinRabbit Summary
How Does Crypto Saving Work?
A new method of putting money away is through cryptocurrency. It's a method of saving money that is unrelated to the established banking system. You can store your money in a digital wallet by investing in cryptocurrencies. Although it is not linked to any conventional banks, this wallet functions similarly to a bank account. Instead, it is linked to the network for cryptocurrencies.
Cryptocurrency saving allows you to save your money in a variety of different cryptocurrencies. These cryptocurrencies include Bitcoin, Ethereum, Litecoin, and many others. Each cryptocurrency has its own unique features and benefits.
Your money is safe and secure, which is one of the major advantages of bitcoin savings. Your money is not at risk of theft or loss because it is not kept in a conventional bank. Your money is also shielded from stock market swings. For those looking for a secure and reliable way to store their money, bitcoin savings are an excellent choice.
The ability to earn interest on your savings is just another fantastic advantage of using cryptocurrencies. Depending on the currency you choose to save in, the cryptocurrency network may pay you interest, which may be extremely substantial.
You can reduce your overall risk by investing in a variety of cryptocurrencies. This diversification can help you maximise your returns while minimising your losses.
You can find about more about high-yield crypto alternatives to low interest rates here.
In the sections below we examine both companies as part of comparing BlockFi vs CoinRabbit.
What Is BlockFi
BlockFi is a financial services company that offers crypto-backed loans and interest-bearing accounts. BlockFi was founded in 2017 by Zac Prince and Flori Marlow. BlockFi is headquartered in New York City, with offices in Denver, Colorado and San Francisco, California. BlockFi is backed by investors such as Galaxy Digital, Peter Thiel's Valar Ventures, Sofi CEO Anthony Noto, and Akuna Capital.
BlockFi offers crypto-backed loans and interest-bearing accounts. BlockFi allows you to use your crypto as collateral for a loan, or to earn interest on your holdings. BlockFi also offers a credit card that rewards you with cryptocurrency cashback.
BlockFi has offices in New York City, Denver, Colorado, and San Francisco, California.
When comparing BlockFi vs CoinRabbit, we should look at the background of each company.
BlockFI has been growing rapidly since it was founded in 2017. In March of 2019, the company announced that it had raised $52.5 million in Series B funding led by Galaxy Digital Ventures LLC., with participation from other leading venture capitalists including Valar Ventures LLC., Akuna Captal LP., Sofi CEO Anthony Noto, ConsenSys Ventures LLC., and Brian Kelly Capital LLC.
BlockFI offers three products: a) Crypto-Backed Loans b) Interest Bearing Accounts c) Credit Card Rewards Program.
BlockFi offers interest-bearing accounts that allow you to use your crypto as collateral for a loan, or to earn interest on your holdings. BlockFi also offers a credit card that rewards you with cryptocurrency cashback. Their team is experienced and BlockFi is backed by major investors.
BlockFi has been gaining popularity lately as a go-to spot for anyone interested in earning interest on their cryptocurrency holdings or taking out a loan using crypto as collateral. BlockFi also offers a credit card that allows you to earn cash back in the form of cryptocurrency.
So, let's take a closer look at what BlockFi has to offer and see if they're worth your time.
One of BlockFi's most popular products is their interest-bearing account. This account allows you to deposit cryptocurrency and earn interest on it. The interest rate depends on the currency you deposit, but BlockFi currently offers rates up to 8.6% APY for BTC and ETH deposits.
They also offer GUSD stablecoin deposits at a 4% APY interest rate. BlockFi recently added support for Litecoin (LTC) deposits as well, though the interest rate is currently lower at 5.25% APY.
To get started with a BlockFi interest-bearing account, simply deposit cryptocurrency into your account. BlockFi will then lend out your deposited crypto to other users who are taking out loans. In return for lending out your crypto, BlockFi pays you interest.
It's important to note that your deposited cryptocurrency is always backed 1:1 by USD, so you don't have to worry about the value of your crypto fluctuating while it's deposited with BlockFi.
Another popular BlockFi product is their crypto-backed loans. With BlockFi's crypto-backed loans, you can borrow USD by putting up cryptocurrency as collateral. BlockFi currently offers loan-to-value (LTV) ratios of 50% for BTC and ETH, meaning you can borrow up to 50% of the value of your deposited crypto.
BlockFi also offers GUSD stablecoin loans at a 70% LTV ratio. So, if you have $10,000 worth of BTC deposited with BlockFi, you could borrow up to $5,000 against it.
The interest rate on BlockFi loans depends on the LTV ratio and the length of the loan. For example, BlockFi currently offers BTC loans with a 6-month term at a 4.5% interest rate for 50% LTV loans and 5.9% interest rate for 70% LTV loans. The interest rates on ETH and GUSD loans are slightly higher.
BlockFi also charges a one-time origination fee of 2% on all loans.
In addition to their interest-bearing accounts and crypto-backed loans, BlockFi also offers a rewards credit card that allows you to earn cryptocurrency cash back on your purchases. The BlockFi Rewards Visa® Credit Card gives you 1.5% cash back in the form of BTC, ETH, or LTC on every purchase you make. BlockFi also doesn't charge any annual fees on their credit card.
To get started with the BlockFi credit card, simply apply for the card and once you're approved, you'll need to deposit crypto into your BlockFi account to serve as your credit line. BlockFi will then convert your crypto into USD at the current market rate and give you a credit limit based on that amount.
So, if you have $5,000 worth of BTC deposited with BlockFi, you'll have a $5,000 credit limit on your BlockFi Rewards Visa® Credit Card.
Is BlockFi Safe?
BlockFi is a regulated financial institution, with industry-leading security measures in place to protect your account and data. BlockFi is also a member of the Crypto Finance Association, which sets standards for the cryptocurrency industry.
BlockFi has implemented multiple layers of security, including 2-factor authentication, cold storage for crypto assets, and email and SMS alerts for account activity. BlockFi takes security seriously, so you can rest assured that your assets are safe.
BlockFi invests your cryptocurrency assets in a number of ways. BlockFi uses a proprietary algorithm that takes into account a number of factors, including market conditions and your individual risk tolerance. BlockFi also employs a team of experienced traders who actively manage your investments.
Using BlockFi, you can earn interest on your crypto holdings, or use your crypto as collateral for a loan. BlockFi also offers a credit card that rewards you with cryptocurrency cashback. BlockFi is a regulated financial institution, with industry-leading security measures in place to protect your account and data. BlockFi is also a member of the Crypto Finance Association, which sets standards for the cryptocurrency industry.
What Is CoinRabbit
CoinRabbit is a cryptocurrency exchange that was launched in 2018. The exchange is based in Estonia and offers a variety of digital assets for trading. Some of the coins that are available on CoinRabbit include Bitcoin, Ethereum, Litecoin, and XRP.
The exchange offers a variety of fiat currencies, such as USD, EUR, and GBP.CoinRabbit has a very user-friendly interface that makes it easy to buy and sell digital assets. The exchange also offers 24/7 customer support in case you have any questions or problems.
When comparing BlockFi vs CoinRabbit, lets look at the background of the second company.
CoinRabbit is a cryptocurrency exchange that allows users to buy, sell, and trade cryptocurrencies. The platform is easy to use and offers a variety of features, making it a great option for those looking to get started in the world of cryptocurrency trading. CoinRabbit also has a mobile app, which makes it convenient for users who want to trade on the go.
CoinRabbit offers a variety of features that make it a great choice for cryptocurrency traders. These features include:
-A user-friendly interface: CoinRabbit has a sleek and user-friendly interface that makes it easy to navigate. All the features are clearly labelled, and users can find what they're looking for quickly and easily.
-A mobile app: CoinRabbit also has a mobile app, which is convenient for users who want to trade on the go. The app is available for both Android and iOS devices.
-A wide selection of cryptocurrencies: CoinRabbit offers a wide selection of cryptocurrencies, including Bitcoin, Ethereum, Litecoin, and more.
-Competitive fees: CoinRabbit charges very competitive fees, making it a great option for those who are looking to save on trading costs.
CoinRabbit ProductsCoinRabbit offers a variety of loan and savings products that can help users save money and earn interest on their deposited funds. These products include:
-A high-yield savings account: CoinRabbit's high-yield savings account offers users a 2% annual percentage yield (APY) on all deposited funds. This is one of the highest APYs offered by any cryptocurrency exchange.
-A short-term loan: CoinRabbit's short-term loan allows users to borrow up to $1,000 with no credit check required. The loan has a fast approval time and comes with competitive interest rates.
Is CoinRabbit Safe?
CoinRabbit is one of the most popular cryptocurrency exchanges, and it is also one of the safest. The company is licensed and regulated in multiple jurisdictions, including the United States, Japan, and South Korea. It has also been audited by a top accounting firm.
CoinRabbit keeps assets safe by using cold storage for all user funds. This means that the vast majority of user funds are stored offline in secure wallets. Only a small amount of user funds are kept in online wallets, and these funds are constantly monitored by CoinRabbit staff.
BlockFi Vs CoinRabbit Interest Rates
The following table shows products offered by both organizations on a flexible term basis. In comparing BlockFi vs CoinRabbit, we show the APY rates of each product. Such products do not require any notice period and deposits can be withdrawn at any time.
|USD Coin (USDC)||8.5%||10%|
Data provided by Seedling
What Are the Risks of BlockFi Vs CoinRabbit?
Before you decide to earn interest on your crypto assets, you should be aware of the risks involved. Here are some of the most important things to remember:
1. Security: One of the biggest risks associated with earning interest on your crypto is the threat of theft or hacking. Make sure you only use trustworthy platforms with a proven track record of security.. This is especially important when comparing BlockFi vs CoinRabbit.
2. Volatility: The value of cryptocurrencies can be quite volatile, which means that your earnings can fluctuate dramatically over time. Make sure you're okay with the possibility of both losses and gains.
3. Taxation: The tax laws surrounding cryptocurrency are still relatively murky, so it's important to consult a tax professional before making any decisions about earning interest on your crypto assets. Your earnings could need to be reported as income, and capital gains taxes might apply as well.
4. Liquidity: In some circumstances, it could be challenging to sell your crypto assets when you need to get your money out. Losses may result if you have to sell your investment for less than you paid for it.
5. Fees: Most platforms that offer interest-bearing accounts charge fees for their services. Make sure you understand how these fees work and how much they will cost in total.. Fees are a significant consideration when comparing BlockFi vs CoinRabbit
Regulation: Because the cryptocurrency sector is still in its infancy, it's not always apparent how the various regulatory bodies will handle its various constituent parts. This would imply that it's illegal in some countries to earn interest on your cryptocurrency holdings. Before making any choices in this matter, be sure to consult a legal expert.
BlockFi Vs CoinRabbit Facts
In the following table, we illustrate some key facts regarding BlockFi vs CoinRabbit
Data provided by Seedling
BlockFi Vs CoinRabbit Conclusion
Cryptocurrencies are a novel and exciting investment class, but they are prone to volatility. Earning interest on your investment is one way to mitigate some of that risk. There are several companies that provide this service, but it is critical to do your research before investing. Remember, only invest what you can afford to lose. Thank you for your time!
Disclaimer: All of the information written on Coincrop is without influence and based on our analysis. No guarantee is offered concerning the accuracy of this information and therefore, any individual following up on it does as such completely at their own risk. Rates are correct at time of publication.
ChrisAn editor at Coincrop
Chris is a Coincrop staff writer based in the UK, covering the best rates for cryptocurrency earning and borrowing products. When not at work, he's likely assembling lego models.
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