We know people are either intrigued or scared when something that is new is presented. Humans fear change!
But when it comes to people handling cryptocurrencies, we know that they are embracing what is new and frightening for others. If you are one of them, you may be wondering if opening a BlockFi account is a good idea.
Or, you may have heard the name before but have no idea what it is. The bottom line is... Can your crypto be trusted with BlockFi?
Let's find out.
BlockFi
Putting your crypto into a savings account and earning interest from your holdings sounds far from the present. Well that is exactly what BlockFi is offering. It may have existed for a few years now, but is being normalized just now.
BlockFi helps crypto holders maximize their profits for holding their currencies in their bank.
You don't have to hold on to your crypto, spend it, or leave it on your wallet. Once you open an account with BIA (BlockFi Interest Account), you can start earning returns after depositing your crypto into your account.
It's important to keep in mind that BlockFi has received support from different groups in the crypto industry, including Galaxy Digital, Morgan Creek Capital, Coinbase Ventures, Susquehanna, Winklevoss Capital, Valar, and Capital Management.
Its Features
BlockFi numerous and helpful tools including but not limited to:
Security
Being able to manage your funds anywhere
Having full control over your account
Multiple streams of income
Easy deposit and withdrawal
With BlockFi, you have to verify your identity and deposit your crypto, and only then will you receive complete transparency. There are no hidden obstacles, which allows you to be in control.
Benefits
Even though the unique features sound like the benefits, here are some more elements to keep in mind when considering opening an account with BlockFi:
Referrals (being referred gives the user $250)
Secure encryption, links, and personal information
Upfront fees
To elaborate, BlockFi takes multiple and important steps to make sure that your account and data are secure your account. First, BlockFi uses an HTTPS connection security to prove that you are on BlockFi and not a weird website.
Once you're registered on BlockFi, you can't continue until you open another link on your email, adding another layer of security.
Additionally, it goes above and beyond to verify your identity and prevent hackers from using your account and even more importantly, having access to your address, social security number, phone number, and date of birth.
We understand how stressful it can be to provide your personal information online, especially when it's a new platform. But, BlockFi states that its platform uses secure encryption for your information.
Very similar to when you're applying for a job position online, the company will most likely ask you to post a video of you holding your I.D.
The same thing happens with BlockFi right before granting you access to the various ways of managing your crypto, only that they require a copy of it rather than a video.
Upfront Fees
Instead of hiding fees like the majority of financial management industries, BlockFi treats its users with enough respect to be upfront with their fees. They are found and listed on their website.
You can rest assured as the fees are mostly for withdrawals, meaning that you will be able to trade without having to pay extra.
Of course, the fees depend on what currency you are withdrawing, and therefore, they vary.
Here they are listed so you don't have to look them up:
Stablecoins: a $0.25 fee per withdrawal and $1,000,000 withdrawal limit per 7-day period.
ETH: a 0.0015 ETH fee per withdrawal and 5,000 ETH withdrawal limit per 7-day period.
PAXG: a 0.0025 PAXG fee per withdrawal and 500 PAXG withdrawal limit per 7-day period.
BTC: a 0.0025 BTC fee per withdrawal and 100 BTC withdrawal limit per 7 days.
LTC: a 0.0025 LTC fee per withdrawal and 10,000 LTC withdrawal limit per 7-day period.
The App
BlockFi provides its users with a mobile app that’s available on both iOS and Android devices.
With it, you can manage your BlockFi account anywhere. This means that you'll be able to trade, track, and, or leverage your holdings from anywhere you want.
In terms of security, BlockFi utilizes a two-factor authentication as well as identity verification to protect your account so your crypto remains safe. Additionally, the exchange platform uses Gemini's custodial system to hold your money.
But you can always access it from your desktop as well, and it's as fast and reliable when it comes to transferring funds.
How It Works
Look at it this way: BlockFi is a bank. The same way you would use a bank to store your fiat. It functions as a modern and decentralized bank account.
Trading is instant
Crypto-backed loan system
8.6% return on investment
Currency holding
24/7 access
In other words, you can place your crypto as collateral for same-day cash. And, of course, you can access your account any time, anywhere.
Equally important, BlockFi claims that it can help you product 8.6% ROI by simply storing your crypto in their platform. In contrast to fiat banks, you won't be able to find any that offers more than 1% ROI for the majority of saving accounts.
Similar to fiat financial institutions, BlockFI's mission is to provide a stable and safe way of holding currency. Moreover, BlockFi offers a loan service for users where they have the opportunity to leverage their crypto for USD
BlockFi's Loans
With this loan service, users can use their crypto as collateral for a loan in USD that’s accessible the same day! Specifically, BlockFi gives loans at a 50% to value ratio, meaning that the value of your loan will need crypto collateral worth twice as much.
Allowing flexibility in the way you'd pay off the loans, this seems as a great choice. You can pay off your loan through smaller payments as well with rates as low as 4.5 APR. Besides, it doesn’t charge prepayment fees or penalize you as long as you pay it back.
The Unstableness
Even though the loan service is easy to use and extremely helpful, it's vital to remember how volatile crypto is.
Its price is known for fluctuating often and you should keep track of your collateral and how much it's worth as you may lose access to the loan.
If you do decide to use the service, be alert and make sure to deposit more crypto.
Trading Your Crypto
Why should you trade with BlockFi rather than using your regular crypto exchange? Well, it may interest you to know that with BlockFi, you are able to do instant transactions.
Not only that but it has better pricing than its competitors. BlockFi's ability to buy and sell crypto is relatively new; The only thing required of you is signing up for a BlockFi account and fund it to start buying and selling.
Then, you'll have the chance of trading them from the comfort and security of your account. The best part of this is the fact that with the mobile app, you can track your coins. This way, you aren't worried throughout the day about not checking it.
Moreover, as soon as you do a trade, the crypto goes in your account, meaning that you'll start making interest in no time. However, BlockFi doesn't have as many available crypto currencies like other exchange platforms like WeBull and Coinbase.
What's Coming
In January 2021, the U.S. Securities and Exchange Commission (SEC) received registration from BlockFi for the "BlockFi Bitcoin Trust."
What does this mean though?
A Bitcoin exchange-traded fund could be on the making.
If this idea is approved, then the world’s first Bitcoin ETF would be launched by BlockFi, which would ultimately offer something completely new: investing in Bitcoin for individual investors and similar institutions.
This would create a relevant change and significant move for the cryptocurrency industry as it means that crypto will finally be recognized in a similar manner as fiat currencies.
Bitcoin Rewards Card
It's listed on BlockFi's website as an item that is "coming soon." It's believed to let users earn exactly 1.5% back in bitcoin on every purchase they make.
The rewards card will be associated with your BlockFi account, meaning that you will be able to spend money from your account wherever the card is accepted, earning rewards along the purchases.
The website, additionally, states an upfront annual fee of $200, but they help offset that with a $250 bonus in bitcoin if you spend $3,000 within the first three months.
If you're interested, you can always sign up for the BlockFi Bitcoin Rewards Credit Card by first signing up for a BlockFi Interest Account.
Then, you would have to complete your user profile, make a deposit, and put your name down for the waitlist.
Natural Risks
Like everything in life, there are pros and cons. In this case, there are incredible benefits and unique features, as well as big risks.
But if you've been part of the crypto currency community for a while now, you know exactly what we're taking about.
For instance, BlockFi does not insure your investments. This means that if for some reason there is a cyber attack against BlockFi and if as a result you lose your crypto, BlockFi doesn't owe you a dime.
Honestly, BlockFi’s lack of insurance is specifically problematic due to its history, which includes other attacks that date way back.
In May 2020, for example, a BlockFi's employee was attacked, causing a data breach, exposing half of the company's retail clients, including their contact information and account activity.
Luckily, no customer was affected and no funds were lost. But, is this something worth the risk?
With any investment, we all know it's high risk vs. high reward. Whether the reward is worth it... we'll leave that on you to think about.
It is, of course, advised to use extreme caution when investing and trading. But, many members of the crypto community and stock analysts see a future on BlockFi.
Should You Use It?
If this sounds like something you want to do but are unsure, you can always check which is the best savings account for you.
Now with the facts listed on your screen, it's easier for you to decide whether BlockFi is a good fit for your wants and needs.
To emphasize, BlockFi offers the ability to earn interest on your cryptocurrency while keeping it in a digital wallet that you have constant access to. Among their services include loans, crypto trading, and more to come.
It seems like BlockFi has a few new projects on the works and we can't wait to see what they end up doing.
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