Update November 29, 2022: BlockFi has declared bankruptcy. You cannot use the platform.
Today, I’m partnering with BlockFI in this BlockFI review.
Welcome to my BlockFI review!
As I’m sure you have all noticed, basic savings accounts rates at banks are extremely low right now. However, if you have crypto or are interested in getting into crypto, then BlockFi is something you may want to look into.
Crypto is extremely popular right now, and I expect that demand to just continue to increase.
According to Finder*, an estimated 36.5 million Americans own some form of cryptocurrency.
I’ve also seen a growing trend amongst those who travel extensively or full-time putting at least some of their money into cryptocurrency, due to the ease of use when traveling around the world.
This is where BlockFi comes in.
BlockFi offers crypto interest-earning accounts, crypto-backed loans, and fee-free trading on crypto. Their services are available in most countries around the world and in almost every state, with some geographical restrictions.
Today, I’m going to go over common questions about BlockFi such as:
- How was BlockFI started?
- What is the BlockFI interest account?
- Can I buy Bitcoin on BlockFi?
- Is BlockFi safe?
- How long does it take to withdraw from BlockFi?
- Does BlockFi have an app?
- How do I sign up for BlockFI?
Continue below to read my BlockFI review.
How was BlockFi started?
BlockFi was created by Zac Prince and Flori Marquez in August of 2017.
Zac Prince first bought bitcoin in 2014 and has been writing about it pretty much ever since. Eventually, he had built a substantial amount of bitcoin, and went to a bank for a loan. However, that bank rejected his loan request and didn’t count his bitcoin as an asset, instead, valued it at $0.
This is when Zac came up with the idea to start his own crypto finance platform that would accept crypto as an asset.
Nowadays, BlockFi has customers from over 120 countries.
BlockFi has investors that include Fidelity, SoFi, Valar Ventures, Winklevoss Capital, Galaxy Digital, university endowments and more.
BlockFi also recently raised $50,000,000 in Series C funding, and is growing enormously (in total BlockFi has raised $160 million since it was founded in 2017.). There are over 50,000 funded accounts currently, with over $1.5 billion in assets on the BlockFi platform.
What is the BlockFi interest account?
The BlockFi Interest Account is a crypto interest-bearing account with a highly competitive interest rate.
BlockFi pays compound interest, which means that your crypto accrues interest daily, compounding on a monthly basis.
BlockFi rates on their BlockFi Interest Account are up to 8.6% APY.
Below, you can see the BlockFi rates as of October 1, 2020.
Can I buy crypto on BlockFi?
Yes, you can buy crypto on BlockFi.
So, if you don’t have crypto but are interested in getting into it, then BlockFi can help you make that happen.
You simply send a U.S. Dollar wire to the BlockFi platform and purchase Stablecoin.
Stablecoins are crypto tokens pegged 1:1 to the U.S. dollar. So one stablecoin equals $1. They were created to have a stable price and are therefore a way to turn your U.S. dollars into digital assets and earn a highly competitive interest rate.
You can choose to keep and earn interest on your stablecoin, or you can trade your stablecoin for other supported assets such as BTC, ETH, LTC, and PAXG.
Here are the steps:
- Sign up for a BlockFI account
- Select “Deposit” at the top
- Select “USD (wire transfer)” as your deposit currency
- Follow the “Wire Deposit info” steps
- Once BlockFI has received your wire funds, they will send you a confirmation email. This usually takes about 1 to 3 business days.
What are the risks of using BlockFi?
I’m sure you’re wondering if BlockFi is regulated and insured – that makes sense and is a good question to wonder about.
Here’s what BlockFi says about the risks of depositing crypto at BlockFi:
“Gemini is BlockFi’s primary custodian. To provide the highest levels of security to any assets safeguarded by Gemini, they keep a majority in cold storage wallets and only a small, operationally determined amount in hot wallets. These hot wallets are covered by an industry-leading insurance policy and the total value of assets stored there will never exceed that policy – this rebalancing is managed using both automated and manual controls. As a limited purpose New York trust company, Gemini Trust is a qualified custodian and regulated by the New York Department of Financial Services. Additionally, Deloitte completed a SOC2 examination of Gemini’s custody solution — you can read more about Gemini’s SOC2 compliance here and about their security here.
To earn interest on crypto, we lend out assets deposited at BlockFi to vetted institutional counterparties. Our risk and finance teams work collaboratively to review all of our counterparties before they become a qualified borrower. You can read about how we generate our yield for our interest accounts here. Additionally, here is a great resource to learn more on the intricacies of our crypto lending market.
Please also note that digital currency is not legal tender, is not backed by the government, and BIA accounts are not subject to FDIC or SIPC protections. This is not a risk free product.”
How long does it take to withdraw from BlockFi?
You can withdraw your funds at any time. While subject to change, BlockFi currently offers one free crypto withdrawal and one free stablecoin withdrawal per calendar month. Withdrawals are subject to a security hold but are typically processed as soon as the next business day after that hold clears. BlockFi reserves the right to take up to seven days to process withdrawal requests.
On BlockFi’s website, the company says:
“This security protocol is in place for the benefit of clients to protect your assets and ensure they are safely and correctly returned to your exact wallet. While we acknowledge this may cause a slight inconvenience, we have to find a balance between speed and security. This security measure has allowed us to identify fraudulent withdrawal requests in the past, and alert clients that their account may have been compromised. We are actively working to find ways to increase the speed of withdrawals while also remaining secure in order to protect our clients.”
Does BlockFi have an app?
Yes, BlockFi has an Android and iOS app.
Their app makes it easy to manage your BlockFi account while on the go.
What else can I do on BlockFi?
BlockFi also gives you the ability to exchange cryptocurrency pairs between BTC, ETH, LTC, PAXG, USDC, GUSD, and PAX.
BlockFi also has crypto-backed US dollar loans. That means that with BlockFi, you can use crypto as your collateral, and you can unlock up to 50% of the value of your assets in US dollars. With their crypto-backed loans, they also fund the same day through wire or stablecoin.
So, whether you need a crypto-backed loan to pay off your debt, to buy a home, or for something else, this could be an option for you to look into.
What do you think of BlockFI? What other questions do you have for my BlockFI review?