BlockFi Review: Earn Interest On Your Crypto

Important Update: On November 10, 2022, BlockFi announced that it had to suspend withdrawals from its platform due to the FTX liquidity crisis. As a result, consumers should not be using the BlockFi platform. As of November 28, 2022, BlockFi officially declared bankruptcy.

BlockFi is a cryptocurrency exchange and platform that offers a crypto wallet, crypto trading, crypto-backed loans, and a crypto rewards credit card. Non-US customers can also open a BlockFi Interest Account and earn interest on their assets.

Another advantage of BlockFi is that you can borrow against your coins. Instead of selling them when you need funds, you can take out a loan. This avoids having to sell into a down market. In this article, we’ll go over how BlockFi is able to offer loan services while allowing you to earn interest on deposits.

Who Is BlockFi?

BlockFi is a cryptocurrency custodian that allows its customers to take out USD loans against their cryptocurrencies. Its founders are Flori Marquez and Zac Prince. BlockFi was founded in August 2017 and is based in Jersey City, New Jersey. The company has raised $158.7 million up to a Series C.

“We are in very early innings in this sector, and everyone is working together to increase the size of the market and make it accessible around the globe,” Prince said to Crunchbase. “We are lucky to be in a position where our business is growing rapidly as cryptocurrency has momentum and relevance right now.”

What Do They Offer?

BlockFi allows you to earn interest on your cryptocurrency and take out USD loans against it as well. You can also trade cryptocurrencies on BlockFi. They currently offer a limited number of cryptocurrencies for trading, which include BTC, ETH, LTC, USDC, and GUSD.

BlockFi Wallet

With the recently-launched BlockFi Wallet, users can buy, sell, trade, and hold cryptocurrencies and stablecoins. You can also use the wallet to store the crypto rewards that you earn from your BlockFi Rewards Credit Card.

Just know that you won't earn any interest for assets that are held inside the BlockFi Wallet. To earn interest, your tokens must be held inside a BlockFi Interest Account.

Crypto Loans

BlockFi allows you to borrow USD against your coins on deposit. The minimum loan amount is $10,000. The LTV (loan-to-value) ratio is 50%. That means 50% of your coins will need to be put up as collateral.

Coins that can be used include BTC, ETH, or LTC. The loan duration is 12 months and the interest rate works out to 4.5%. Origination fees may also apply.

As cryptocurrencies are very volatile, you can quickly fall outside of the 50% LTV. When the LTV reaches 70% (called a trigger event), BlockFi will send a notification that you must put up more collateral to bring the LTV back down to 50%.

BlockFi Bitcoin Rewards Visa Credit Card

BlockFi launched a Bitcoin Rewards Visa Credit Card. Similar to cash-back credit cards, the BlockFi Visa will earn you rewards in Bitcoin!

The card is set to earn 1.5% rewards rate in Bitcoin on all card purchases with no annual fee, and then you can get 2% back after $30,000 in annual spend. Plus, BlockFi cardholders can now earn up to 10% back in crypto rewards at thousands of brands! That's a pretty sweet deal that puts it ahead of most other Bitcoin rewards products.

You can open a BlockFi Bitcoin Credit Card here.

See how the BlockFi Bitcoin Rewards Visa Credit Card compares to other crypto-rewards credit cards here.

BlockFi Interest Account (BIA)

Note: “BlockFI Interest Account (BIA) are no longer offered to new clients who are U.S. Persons or persons located in the United States. Existing clients that are U.S. persons or located in the United States will be unable to transfer new assets to their BIAs. The BIAs have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States, to U.S. persons, for the account or benefit of a U.S. person or in any jurisdiction in which such offer would be prohibited.”

The interest-bearing account is called the BlockFi Interest Account. You can earn interest in BTC, ETH, LTC, USDC, GUSD, and PAX. A minimum balance is not required.

This account is only available to non-US persons, and is offered through BlockFi's subsidiary, BlockFi International (Bermuda).

BlockFi Interest Rates

Here are BlockFi's current interest rates.

Note: They do charge different rates for US clients vs. international clients. International clients earn higher amounts.

• BTC Tier 1: 3.20% (for amounts of 0 to 0.10)
• BTC Tier 2: 2.00% (for amounts of 0.10 to 0.35)
• BTC Tier 3: 2.00% (for amounts over 0.35)

• ETH Tier 1: 3.50% (for amounts of 0 to 1.5)
• ETH Tier 2: 2.00% (for amounts of 1.5 to 5)
• ETH Tier 3: 2.00% (for amounts over 5)

• LINK Tier 1: 1.00% (for amounts of 0 to 100)
• LINK Tier 2: 0.20% (for amounts of 100 to 500)
• LINK Tier 3: 0.00% (for amounts over 500)

• LTC Tier 1: 2.00% (for amounts of 0 to 20)
• LTC Tier 2: 1.00% (for amounts of 20 to 100)
• LTC Tier 3: 0.00% (for amounts over 100)

• PAXG Tier 1: 1.00% (for amounts of 0 to 1.5)
• PAXG Tier 2: 0.00% (for amounts of 1.5 to 5)
• PAXG Tier 3: 0.00% (for amounts over 5)

• USDC Tier 1: 7.50% (for amounts of 0 to 20,000)
• USDC Tier 2: 6.00% (for amounts of 20,000 to 5,000,000)
• USDC Tier 3: 6.00% (for amounts over 5,000,000)

• GUSD Tier 1: 7.50% (for amounts of 0 to 20,000)
• GUSD Tier 2: 6.00% (for amounts over 20,000)
• GUSD Tier 3: 6.00% (for amounts over 5,000,000)

• BUSD Tier 1: 7.50% (for amounts of 0 to 20,000)
• BUSD Tier 2: 6.00% (for amounts of 20,000 to 5,000,000)
• BUSD Tier 3: 6.00% (for amounts over 5,000,000)

• PAX Tier 1: 7.50% (for amounts of 20,000 to 5,000,000)
• PAX Tier 2: 6.00% (for amounts over 20,000)
• PAX Tier 3: 6.00% (for amounts over 5,000,000)

• DAI Tier 1: 6.00% (for amounts of 0 to 20,000)
• DAI Tier 2: 4.00% (for amounts of 20,000 to 5,000,000)
• DAI Tier 3: 3.50% (for amounts over 5,000,000)

• USDT Tier 1 (non-US): 8.75% (for amounts of 0 to 20,000)
• USDT Tier 2 (non-US): 7.50% (for amounts of 20,000 to 5,000,000)
• USDT Tier 3 (non-US): 7.50% (for amounts over 5,000,000)

If you don’t own any of the above coins, you can buy crypto instantly using ACH bank transfers. Or you can set up recurring buys for automatic investing.

Interest in your BIA is paid out monthly in Bitcoin, Ether, Litecoin, USD Coin, or Gemini Dollar. You get to choose which coin interest is paid in. The benefit of choosing the payout coin is that you can diversify your portfolio across various coins.

Are There Any Fees?

Yes, there are fees for withdrawing currency from your BlockFi account. As of writing, these fees are:

• BTC: 0.00075 BTC
• LTC: 0.001 LTC
• Stablecoins: 50 USD
• ETH: 0.015 ETH
• LINK: 2 LINK
• PAXG: 0.035 PAXG
• UNI: 2.5 UNI
• BAT: 60 BAT 

With BTC, LTC, and stablecoins, users can make one free withdrawal per month. But on December 1, 2021, BlockFi announced that it was no longer offering free withdrawals for Ethereum blockchain tokens (ETH, LINK, PAXG, UNI, and BAT) due to rising gas costs.

How Does BlockFi Compare?

BlockFi's interest rates are competitive, but other platforms offer higher APYs for some coins. 

However, realize that BlockFi is currently not available for US-based persons. As a result, other companies may be a better choice.

It should also be noted that to earn interest with BlockFi, you'll need to deposit and loan out your digital assets. But other platforms like Nexo allow you to simply deposit cash to earn interest and all of the crypto lending takes place in the background. If you're new to the crypto space, that kind of simplicity may be appealing.

BlockFi Bonus Offer

BlockFi runs various bonus offers from time to time. 

Open an account here >>

How Do I Open An Account?

You can visit the BlockFi website to open an account. You'll need to upload a clear photo of a supported identification document. Blockfi says that most applications are approved within minutes of ID being uploaded.

Once you open an account, you can securely link a bank account and transfer funds immediately via ACH. There is a daily limit of $500 for new accounts, and $1,000 for established accounts. Both limits are expected to increase in the future.

Is My Money Safe?

Money deposited with BlockFi is not as safe as being on deposit at a bank. BlockFi, or rather its custodian, Gemini, is not insured by the FDIC or SIPC.

Gemini does, however take measures to protect your funds. These measures include keeping the majority of funds in cold storage (i.e., offline). BlockFi also says that its client funds are placed ahead of any equity or employee funds in the event of a loss.

Gemini is a New York trust company regulated by the New York State Department of Financial Services (NYSDFS) and a licensed depository trust. Gemini is also SOC 2 Type 1 security compliant.

Important Notice: On November 10, 2022, BlockFi announced that it had to pause withdrawals due to the liquidity crisis caused by FTX's bankruptcy. As a result, it appears that BlockFi doesn't have the reserves on-hand to fulfill all customer withdrawal requests. This is a big issue and could result in customers losing money. As of November 28, 2022, BlockFi officially filed for bankruptcy. 

How Do I Contact BlockFi?

There are two ways to get in touch with BlockFi's support team. This first way is by submitting a support ticket here. But unlike many cryptocurrency platforms, you can also contact BlockFi by phone at 646-779-9688 from 9:30 AM - 5 PM (ET) Monday - Friday.

For a cryptocurrency company, BlockFi's Trustpilot rating of 3.7/5 actually isn't too shabby (By comparison, Coinbase's Trustpilot rating is 1.6/5). BlockFi has a B- rating with the Better Business Bureau (BBB).

Is It Worth It?

Certainly, you'll need a certain appetite for risk to use a company like BlockFi. However, if you're already trading cryptocurrencies, then you're probably already some with a fairly high tolerance for risk.

BlockFi risks are lower than those found at many other cryptocurrency exchanges. However, their main draw: the BlockFi Interest Account, is no longer available to US-persons. As such, if you're looking to trade crypto, there might be other platforms that are better suited.

However, any non-deposit (i.e., non-FDIC) or non-SiPC protected funds will always be at a higher risk of loss. Also, be careful when borrowing against your cryptocurrencies, as wide price swings could cause you to quickly violate the 50% LTV threshold.

Not sure that BlockFi is right for you? Check out our full list of top crypto savings accounts to see how it compares. Or if you prefer the safety of an FDIC-insured bank account, these are our favorite high-yield savings options.

BlockFi FAQs

Let's answer a few common questions that people ask about BlockFi:

Is BlockFi being shut down?

Yes, as a result of filing for bankruptcy, BlockFi will likely be forced to shutdown.

Does BlockFi have its own wallet?

Yes, but customers don't earn interest on funds held in their wallet. To earn interest, crypto holdings must be transferred into a Bitcoin Interest Account (BIA).

Does BlockFi charge trade fees?

Yes, it charges a spread which varies by coin but can go as high as 1%.

Can you earn a Bitcoin bonus with BlockFi?

Yes, BlockFi offers signup bonuses of $15 to $250 depending on your deposit amount. The $15 bonus requires a minimum deposit of $100. You'll need to deposit at least $100,000 to earn the $250 bonus.

BlockFi Features