The One about Cryptocurrency: BlockFi (to deposit your crypto and earn interest)

Posted onAuthorDennis A. AmithLeave a comment

FULL DISCLOSURE:

I am not a financial advisor. This post is to provide information and not provide financial product advice. I discuss why I personally chose to invest in a stock, ETF, REIT, investment fund or cryptocurrency (which I have held for over a week) and also share information that is public about the following stock, ETF, REIT, investment fund or cryptocurrency and they are based on my own personal opinion.

I will not blog about any positions of stocks, ETFs or REITS and cryptocurrency which were initiated just within the last 72 hours of posting this blog article.

It is recommended that you should always consider visiting a financial advisor for independent financial advice before making investment decisions.

I do not work in the financial industry, so just because I write about it, doesn’t mean you should own it.  So, consult with a financial advisor and do your due diligence, RESEARCH!

I am not receiving compensation by the company for this blog post.

I have no working relationship with any company whose stock, ETF, REIT or cryptocurrency mentioned in this blog post.  Nor do I have a family member or friend who works with the company.

Back in 2017, the company BlockFi (based in Jersey City, New Jersey) was founded.  Created a cryptocurrency financial services provider, the idea is to trade and also hold your crypto in an account to gain interest.

The company has since grown to have offices in New York, Buenos Aires, London, Warsaw, Krakow and Singapore.

The purpose of using BlockFi is almost similar to a bank.

Keep crypto such as Bitcoin, Ethereum, Litecoin, Chainlink and PAX Gold, you can earn interest at up to 8.6% APY.  You can also borrow cash (as low as 4.5% APR) and buy or sell crypto.  There are no hidden fees, no minimum balances.

So, for those who store it in a wallet and leave it there, yes, that’s good.  BUT leaving it on there without gaining any interest?  Why not story it on the BlockFi financial service and let your cryptocurrency accumulate interest.

As of right now, the primary cryptocurrency BlockFi supports for deposits are:

  • USD (as a Stablecoin)
  • Bitcoin (BTC)
  • Ethereum (ETH)
  • Litecoin (LTC)
  • Chainlink (LINK)
  • PAX Gold (PAXG)
  • USD Coin (USDC)
  • Binance USD (BUSD)
  • Paxos Standard Token (PAX)
  • Gemini USD (GUSD)

Now transferring from a cryptocurrency exchange like COINBASE, Litecoin and Chainlink don’t charge all that much.  But it’s important to note that Bitcoin and Ethereum gas (transfer) fees may knock a chunk of what you own.

So, as a test, I used Coinbase to send the following:

I sent $9.08 worth of Bitcoin to BlockFi and a total of $5.07 was deposit.

Litecoin wasn’t bad, I sent about $18 worth as a test (.007664868 LTC) and the fee was only .00000420 LTC.

For Chainlink, I sent about 1 LINK coin and after the fee, what was deposit was .92301538 LINK.

For Ethereum, I’ve never liked the gas fees for transferring and I expected that I would lose Ethereum on the transfer.  You will get a message that you need to have at least 52,000 Ethereum.

As a test, I was going to send $9.08 of Ethereum and the deposit would be $5.61.

So, please note that after fees,with Bitcoin and Ethereum, you would lose quite a bit on transfer.  While things were much better with Litecoin and LINK.

And the last test, I sent $12.30 worth of USDC to BlockFi and there was a fee of $3.30, so only a total of $9.00 was sent.

If anything, I wish more cryptocurrency would be added, as the coins you can deposit are limited but I look forward to see BlockFi take advantage by allowing more cryptocurrency.

You can purchase cryptocurrency from BlockFi, but they prefer one to use GUSD (Gemini USD), BUSD (Binance USD), PAX (Paxos), USD Coin (USDC) to purchase any of the cryptocurrency listed.

But overall, I’m giving BlockFi a try and will report back in several months from now to see how much interest, I have accrued.

But the reason why I chose to use BlockFi is that during 2017-2018, when we saw the volatility of cryptocurrency, especially with Bitcoin, BlockFi continued to grow in those two years.

Zac Prince, the CEO of BlockFi told Finance Magnates in an interview at the time, “the ability to borrow money secured by your cryptocurrency as collateral, and the other being the ability to earn interest on your cryptocurrency holdings–[these] were things that didn’t really exist until we brought them to the market in BlockFi–at least, not on the scale that we’re doing it, and not for retail investors.”

Fastforward to 2001 and Prince tweeted:

A month later, former CFTC chair J. Christopher Giancarlo, the former Commodity Futures Trading Commission chairman joined the board:

 

Personally, I feel that BlockFi has grown a lot in the last three, going on four years and as much as I read about consumer confidence on social media, videos on YouTube, for me, doing the research and seeing the consumer confidence, how the company has grown, it’s been positive and now I look at it as another source of passive income.

With that being said, I know there is an anti-BlockFi group on Twitter, I know there are people trying rival companies and like any company that deals with financials, may it be traditional banks or fintech, you’re going to have people who like or dislike that company.

But as more and more people start to invest in cryptocurrency, we will see more and more companies begin, current companies grow but eventually, one has to keep their eye out on useful news about the company and its growth.

Last but not least, I’m also not going to risk all my cryptocurrency in one basket (cryptocurrency is not FDIC insured, because it’s in a different class of assets and the other reason is because the value of cryptocurrency coins are too volatile to be adequately underwritten), I wanted to give this a try by adding various crypto with an amount I am satisfied with testing and overtime, seeing the results and also, if you are willing to try the other competitors, you can and see which works for you.

Sure, as I would love to have my hodling crypto gain interest, I’m playing it safe especially when it comes to cryptocurrency, considering I have seen other platforms which I have cryptocurrency shutdown (or were severely hacked) and I no longer have access to that crypto.

I am not going to put all my Bitcoin or Ethereum but I’m willing to see how accrued interest grows on BlockFi.  So, we’ll see how things go overtime.

As always, due your research and see if BlockFi is for you.

Check out BlockFi and click here to go to the website.

 

facebookShare on Facebook
TwitterTweet
FollowFollow us
PinterestSave