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BlockFi review

Meet BlockFi. The crypto industry’s favourite lender and savings account. Our expert review look into what it is and how it can be beneficial to you.
BlockFi
By
Dean Fankhauser
Posted
12th November 2019
Our review

What is BlockFi?

BlockFi is a wealth management platform that focuses on crypto assets. They offer crypto asset loans and savings accounts with industry-leading interest rates and terms. BlockFi uses third-party custody solutions from Gemini Custody who provide cold storage, insured wallets for every client, ensuring your assets are safe. They’re based in New York, United States and they’re backed by some of the industry’s leading investors and advisors.

How does BlockFi work?

Savings accounts

BlockFi offers GUSD, Ethereum and Bitcoin savings accounts. They have industry-leading interest rates across all three assets. When you store your crypto assets with BlockFi, they’re stored with Gemini Custody which has industry-leading security measures such as cold storage and wallet insurance. Gemini is a New York based, regulated financial institution that specialises in crypto currencies.

While BlockFi has high interest rates and great security measures, they've have been criticised for their high withdrawal fees and interest payment policies.

When saving with BlockFi, you can have your interest paid in GUSD, Ethereum or Bitcoin, no matter whether you’re savings in that asset or not. This is particularly useful if you’d like to diversity your assets in an automated way, or if you see an opportunity to earn a higher interest rate than the asset you’re accruing the interest in.

There’s no minimum amount of GUSD, Ethereum or Bitcoin you need to deposit in order to earn interest. There also isn’t a maximum deposit.

Important to note

  • Industry-leading security with Gemini Custody
  • Some of the industry's best interest rates
  • Compounds monthly instead of weekly or daily

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Loans

BlockFi offer loans in GUSD, Ethereum and Bitcoin. You can use your crypto assets as collateral to borrow any of these assets. The crypto assets they accept are GUSD, Ethereum and Bitcoin. Interest rates vary, depending on the asset you’re borrowing and the collateral you’re using. They generally have very competitive interest rates.

Collateral is stored with Gemini Custody which is regulated in New York and insured.

They offer up to 50% Loan to Value (LTV), interest rates start at 4.5% and most loan durations are 12 months. You do have the option to prepay, or refinance and the end of the loan duration.

Decisions are usually very prompt and they offer good, responsive support. Decisions can be made in less than 2 minutes, in some circumstances. BlockFi claim the speed at which they make decisions for Bitcoin and Ethereum loans are the fastest in the industry.

How crypto loans work

In order to get a crypto loan with BlockFi, you need collateral (BTC, ETH, LTC) and enough of it to de-risk the loan for BlockFi. In most cases, it’s usually at-least 50% of the loan you want to take out. For example, let’s say you want to borrow 2 Bitcoin. In order to do this, you’ll have to offer at least 4 Bitcoin in order to obtain the loan.

Once you’ve got enough collateral, you’ll also need to pay interest on that loan and it’ll be for a minimum duration of approximately 12 months.

This is a rough guide and exact estimates should be clarified on the BlockFi website.

Pros

  • Insured wallets by AON and stored by Gemini which is regulated in NYC, United States
  • Created by reputable team with highly regarded US based investors
  • Competitive interest rates with flexible, transparent terms
  • No need to use or stake native currencies to get higher interest rates

Cons

  • No app and very basic website. They have told us they will be releasing the app in a couple of months.
  • Monthly compounding interest instead of weekly
  • One free withdrawal per month with a 0.0025 BTC withdrawal fee after that

BlockFi summary

BlockFi is a favourite amongst the crypto community. It’s backed by some of the industry’s most respected people and it offers a high-quality, transparent and fair product that doesn’t make the user jump through hoops with native tokens in order to get the most out of it.

If you’re looking for an easy-to-use, safe, high interest paying savings account. It’s difficult to go wrong with BlockFI. While they could do more to reduce withdrawal fees, it’s difficult to fault them beyond that.

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