So since I started investing in crypto for Coinpooper.com, I wanted to look into ways to let my crypto work for me. Because I am just starting I’m currently just expanding my crypto exposure and won’t be selling for a while. The cryptocurrencies will just sit in my ledger or on the exchange if I just bought it, so I was curious to see if there were any ways to make some money by not trading or selling. This is how I found BlockFi. I will continue to update this page with any new information I get and also how my experience with the platform evolves!
What is BlockFi?
BlockFi is an American peer-to-peer credit marketplace that was founded in 2017 by a number of thought leaders from the financial sector. Zac Prince (CEO and founder), Flori Marquez and Mahesh Paolini-Subramanya. All of which founded successful companies in the past or held management positions at well-known American banks.
BlockFi offers three different products at the moment. They offer a BlockFi Interest Account, a Trading Account and Crypto-backed Loans. In the near future, they will also offer a credit card with bitcoin rewards. I will explain all the different products further below.
BlockFi Bitcoin Rewards Credit Card
BlockFi will soon launch a credit card that lets you earn bitcoin with every purchase. We have seen these products launched a lot lately, and with some special promotions, they work quite nicely, check out my experience with the CRO Visa card. After applying for the card, you will receive a monthly credit limit. You can spend this and if you continue to pay your statement balance on time you won’t be charged any interest on the balance. You will receive a 1.5% cashback in bitcoin on each transaction made with the card.
There is a nice signup bonus of $250 in bitcoin after spending $3000 or more on the card within the first three months. An important note is that the card will cost you $200 annually in fees. (Once the product is launched, more features will be added, both on and off the BlockFi’s platform.
Some new benefits that have been added before the launch are:
- $250 in bitcoin sign up bonus if you spend $3,000 within your first three months
- 3.5% bitcoin rewards on all purchases in months 4-6 of card ownership, up to $100 in bitcoin
- 2% extra APY on your average daily stablecoin balance, paid in bitcoin, up to $200
- 0.25% back in bitcoin for eligible trades on BlockFi, up to a maximum of $500 in bitcoin each month
- $30 in bitcoin for every client referral, on top of the base Refer-a-Friend program
The card will only be available in the US at first but will expand to other countries in the future. Visa is the payment partner for this card.
BlockFi Interest Account
With a BlockFi Interest Account (BIA) you can earn interest on your cryptocurrencies. I think there is a market for products like this because the regular interest accounts at my bank vary between 0.01% and -0.5% interest, depending on the amount of cash you are storing. The BlockFi account allows you make money on holding your cryptocurrencies instead of having to sell them, and depending on the asset you are holding you will receive up to 8.6% annual percentage yield (APY).
You might wonder why the percentage is so much higher than regular banks, and that is because they lend the cryptocurrency to people wanting a loan against a high interest. The loans are generally to institutional traders and other forms of business loans. Think, hedge funds, venture capital companies and markets makers. They need crypto to trade, but the amounts they need are hard to come by. So generally, they are willing to pay a premium to satisfy their investors.
How to create a BlockFi account?
Creating an account on BlockFi is just a few minutes work and the verification of your identity is really quick as well!
Go to the BlockFi website.
Click the “Get Started” button.
Fill in the form with your details and verify your email.
Complete your profile (because BlockFi is a financial institution, they will have to comply with European regulations).
Upload proof of identity, such as a passport, driver’s license or ID and wait for approval.
The last step is to verify your identity with a selfie. After your account has been verified, you can immediately start with lending out your cryptocurrency or lending it yourself.