BlockFi is a wealth management platform that focuses on crypto assets. For now, these assets mostly consist of Bitcoin, Litecoin, Ethereum and USD stablecoins like GUSD and USDC.
Unlike nearly all of BlockFi’s competitors, they don’t offer native tokens, they don’t wave the DeFi flag and they offer a simple product with simple terms.
After testing just about every competing product on the market, this is refreshing. Trust me.
We’re big fans of what Zac Prince is doing with BlockFi.
He’s the face of the company and he honestly comes across very professional and knowledgable.
In addition to Zac, the senior team includes his co-founder Flori Marquez who helped build, scale and optimize a $125MM portfolio for Bond Street (acquired by Goldman Sachs).
The rest of the team come from impressive, mostly finance backgrounds and they’re all based in NYC.
BlockFi was launched August 2017 after the founders Zac Prince and Flori Marquez identified the opportunity to apply what they had been working on to the blockchain industry. Both had significant experience in the lending industry and felt that the same mechanics could be applied to Bitcoin and the overall crypto industry.
With a wordpress-based MVP, and a successful launch, the team were able to raise $1.5m from Consensys Ventures, SoFi and Kenetic Ventures. Since then they've gone on to raise much more from Mike Novogratz at Galaxy Ventures, Akuna Capital and Anthony Pompliano's Morgan Creek Digital.
With this new injection of capital, they've grown the company exponentially with significantly more head-count in their New York based office and have also expanded to new products such as savings accounts, trading and apparently a crypto credit card is coming soon.
The company is based in the USA and has to adhere to local laws. Additionally, unlike much of the crypto industry, the team has relevant experience in the lending industry and they have a track-record that is much more trustworthy than others.
The company has been very transparent and customer-friendly to date. They are backed by some of the biggest names in the industry, so there’s a lot of top reputations on the line if anything goes wrong.
While they don’t necessarily have the best rates in the industry, the rates are competitive and they don’t mess around with risky things like being paid in another native token, or having to stake tokens.
They also use Gemini as their custody provider. This is a big deal because it’s insured and has industry leading security measures to ensure your assets are safe.
Interestingly, BlockFi use third-party custody solutions. This is a fancy way of saying that when you store your crypto assets with BlockFi, they don’t store them, someone else does. Their supplier of custody is a company called Gemini.Gemini was set up by the Winklevoss twins. You might remember them from the movie The Social Network. Gemini is the most regulated US based crypto company around. They’ve been doing this for a long time now and they’re doing an excellent job. Also, they’re insured for up to $100m per wallet.
BlockFi is also backed by some of the world’s top investors including Peter Thiel’s fund. In case you’re not sure who that is, it’s the guy who created Paypal, was the first investor in Facebook and also helped create Palantir. He’s track record is basically second to none.
They’re also backed by Anthony Pompliano at Morgan Creek Digital, Winklevoss Capital, Arrington XRP Capital, Akuna Capital and a number of other high-profile backers.
In our experience, they have been extremely responsive. Unfortunately they don’t have real-time chat or a number to call, however, they are quite responsive via email. You can reach them on email@example.com
If they want to become a mainstream wealth management platform, they may need to improve this and offer more support options. There’s nothing more scary than when something goes wrong with your money. You want to be able to pick the phone up and sort it out.
Overall, the usability of BlockFi’s website is pretty good. They recently did an overhaul of the design and it is definitely an improvement. It comes across more professional and they fixed some usability issues.
There are still some nagging problems like not displaying the amount of Bitcoin held. Instead they just show the USD value of the Bitcoin you hold.
They also don’t cater for international clients who deal in other currencies at all. This is a frustrating experience.
By far our biggest complaint is the fact that BlockFi don’t offer native mobile applications. This is a must and we hope they’re addressing this soon.
It really couldn’t be simpler. In fact, when we tested this with others, they were shocked at how fast and easy it was for them to start earning interest with BlockFi. All you do is create an account and deposit your assets. From that moment on, it’s earning interest. There’s nothing more to do.
It is a little more time consuming when it comes to withdrawing your assets. It’s also worth noting that there are fees to withdraw as well. If you’re not withdrawing very often, this shouldn’t concern you though because you can do one free withdrawal a month.
In our case it was dead simple to get a loan. It did help that we were already earning interest with BlockFi, so they could simply take that as collateral without us having to add any more. The approval process was straight forward and frighteningly fast.
They don’t need to do credit checks because you’re using your crypto as collateral. This means less risk all around and much faster decision making without impacting anyone’s credit scores.
People outside of the US and certain states had problems with their loan functionality which was disappointing, so that worth noting.
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.
In our experience, it was a total breeze. It only took a couple of minutes to sign up and once deposited, our assets were earning interest instantly.
1. Go to the BlockFi website
2. Click on ‘Earn interest’ or ‘Get started’
3. Enter your email and a very secure password
4. You should be logged in now. Click on ‘deposit’. You may need to verify your identity
5. Use a passport or your driver’s license to be approved
To sum up, BlockFi is probably the best option out there if you’re looking to earn interest or get a crypto loan.
It’s simple, secure and honest. You’d be surprised how hard that is to come by in this industry. Now all they need to do is create a great mobile app, support more states and countries, add additional currencies and they will be miles ahead of their competition.
We definitely recommend using their service.