The ultimate goal of the crypto and blockchain niche is to emulate the traditional financial services industry alongside its products and offerings and strip down its drawbacks.
BlockFi is one of the industry movers that are the most dedicated to it. The service provider has concentrated its efforts on serving retail investors and institutions and easing their journey into the crypto assets world.
The crypto platform has various products and services, including a digital asset lending program, corporate treasury solutions, OTC trading and execution, investment products, and more.
This BlockFi review goes into detail to uncover everything you should know about BlockFi and how it can help your financial goals, depending on your personal preferences.
Transparency: We may get compensated when you click on links in this article.
BlockFi is a crypto trading and lending platform founded in 2017 by Zac Prince and Flori Marquez. Like many other lending solutions, the New York-based BlockFi also provides its users with the chance to earn interest on their crypto holdings.
The company started in January 2018 by launching its first product - crypto-backed loans. In 2019, it enhanced its product portfolio by also including a crypto-funded interest account. Over time, BlockFi managed to expand its offerings to a point where it also serves institutional clients by addressing their crypto management needs.
Think of BlockFi as a crypto bank-lite platform for the cryptocurrency community. Its products are tailored to the needs of beginner and advanced digital asset investors and traders from all profiles.
Today, the BlockFi team consists of professionals with a deep bench of expertise across financial services and technology. The company is operated from offices in New York, New Jersey, Poland, and Argentina.
Over time, BlockFi has established itself as one of the most reputable service providers in the crypto lending niche. Its potential was recognized by leading investors who have backed the project early, helping it reach the point where it is today. BlockFi claims it is "the only independent lender with institutional backing" from investors like Fidelity, Bain Capital, Coinbase Ventures, Galaxy Digital, Morgan Creek Capital Management, Kinetic Capital, HashKey Digital Asset Group, and more (the complete list is available here).
However, it is worth noting that BlockFi still has a long way to go if it wants to become the undisputed leader in this crowded niche. There are service providers that still offer better interest rates and general terms on their products, which, unless improved upon, would leave BlockFi in their shadow.
|👱 Founders||Zac Prince, Flori Marquez|
|🏢 HQ||New York|
|🚀 Products||Trading accounts, interest accounts, crypto-backed loans, credit cards|
|💰 APY||Up to 8.6%|
|💰 Minimum Deposit||$0|
|💻 Technology||Browser-based application and mobile apps|
|👛 Promotions||Up to $250 BTC bonus for new accounts|
BlockFi Products and Services
For its relatively short lifespan, BlockFi has managed to grow its product and service portfolio significantly. Today, it offers various solutions to retail and institutional crypto investors designed to ease their journey into the digital asset space.
With that said, however, not all products are equally successful and popular. While this isn't necessarily a drawback, it shows that the company has additional work to do if it wants to satisfy the needs of its clients better and grow its market share in an industry as competitive as this one.
Let's deep-dive in the products and services mix of BlockFi to see what it has to offer you and how it stacks with its competitors:
BlockFi Interest Account (BIA)
The BlockFi Interest Account (BIA for short) allows you to earn up to 8.6% APY per year. The supported assets include Bitcoin, Ether, Litecoin, GUSD, USDT, PAX, USDC, PAXG, LINK, and BUSD. You can also choose in what cryptocurrency to receive the interest payments.
Opening a BlockFi Interest Account is a straightforward procedure that takes just a couple of minutes. All you have to do is enter basic personal information and deposit USD by linking your bank or wire, crypto, or Stablecoin.
The interest account works similarly to the offerings of other service providers. However, the terms are quite different.
With BlockFi, the interest accrues daily and is paid to your account every month. There are no hidden fees and no minimum balances, making the interest-bearing account suitable for beginners with limited capital.
However, the interest rate isn't exactly the best in the online consumer lending industry. With BlockFi, you can earn a maximum APY of 5% for Bitcoin, 4.5% for Ether, and 5.5% for Litecoin accounts, but 8.6% with Stablecoins. All-in-all, the BlockFi interest account offerings are an exciting option and one of the best out there.
BlockFi Interest Rates
The range of supported assets is quite limited compared to traditional crypto exchanges like Coinbase, Binance, or Bitstamp. With BlockFi, you can trade BTC, ETH, LTC, PAXG, USDC, USDT, GUSD, and PAX. While those would appeal to the needs of beginners or crypto investors with more conventional preferences, investors looking for a broader Stablecoin range or more exotic altcoins might be disappointed.
So, with that said, should you consider trading on BlockFi instead of on a traditional crypto exchange? The truth is there is sound reasoning to do so if you also want to earn interest on the funds in your savings account. In fact, this is BlockFi's main advantage over the majority of the crypto exchanges - the minute you submit a trade, you will guarantee immediate interest accrual, which is a convenient way to optimize your returns. So, for example, if you buy ETH with USD, you will immediately start earning interest in ETH.
Furthermore, BlockFi claims to be ensuring instant transactions and better pricing than its competitors. While the former is true, the latter is questionable. Indeed, the prices are better than some crypto exchanges, but they are close to the industry's average in the general case.
There is also the option to set up recurring trades. You can tailor the frequency the way you like with daily, weekly, or on a monthly basis (1st or 15th every month) options available.
Borrow Funds Against Crypto Assets
BlockFi Crypto loans were BlockFi's first product. As such, one should expect them to be among the top consumer loan offerings in the industry.
However, the case isn't exactly that. BlockFi's crypto loans come at relatively high interest rate terms. Here is a basic comparison between BlockFi and Celsius Network's offerings:
- A loan with a 50% Loan-to-Value - BlockFi (APR 9.75%) vs. Celsius Network (APR 8.95%)
- A loan with a 35% Loan-to-Value (33% in the case of Celsius Network) - BlockFi (APR 7.9%) vs. Celsius Network (APR 6.95%)
- A loan with a 20% Loan-to-Value (25% in the case of Celsius Network) - BlockFi (APR 4.5%) vs. Celsius Network (APR 1.00%)
BlockFi's crypto-backed loans also charge withdrawal and origination fees that you can find more about here.
In a nutshell, BlockFi's crypto loan offerings fall behind the competition regarding their financial terms.
It also doesn't fare well when it comes to supported assets. For example, you can take out a loan from BlockFi only in Bitcoin, Ether, Litecoin, and PAXG. With Nexo and especially Celsius, for example, you have much more options.
However, one of the advantages of BlockFi (although it is also present with other service providers) is that you receive your loan on the same business day the company gets your collateral. You are free to pay your BlockFi loan the way you like - either in installments or at once. You can pay it the next day or at the end of the year - everything is up to you and your preferences.
BlockFi's range of services tailored to institutions is pretty extensive. The company offers everything from financing solutions and OTC trading to corporate treasury and access to alternative investment products. The company targets market makers, investment funds, crypto-native businesses, and conventional financial institutions through its wide range of solutions.
Let's start with the leading service tailored to the institutional investor or the traditional financial institution, called BlockFi Global Digital Markets. It is designed to enable big players to borrow digital assets or USD at negotiated terms and rates for hedging, market-making, shorting, or other working capital needs. The lending products are customized on a case-by-case basis to appeal to the needs of each corporate client. The BlockFi Global Digital Markets service supports U.S. Dollar loans, Stablecoins, and large-cap cryptocurrencies (Bitcoin, Ethereum, Litecoin) and other instruments based on demand and availability on the platform.
The BlockFi Trusts platform offers institutions passive exposure to cryptocurrencies through trust vehicles. BlockFi offers three trusts, namely the BlockFi Bitcoin Trust, BlockFi Ethereum Trust, and BlockFi Litecoin Trust. According to the company, the goal of each Trust is to give investors the freedom to implement strategic and tactical asset allocation strategies with cryptocurrencies by using the shares of that Trust. That way, institutions can take advantage of all the investment benefits of the asset class without having to worry about the associated costs or how to store the purchased assets.
BlockFi has a unique service for institutions that want to capitalize on cryptocurrencies' potential as treasury reserve assets to ensure additional liquidity and yield. The BlockFi Corporate Treasury Solutions can help organizations diversify and improve their balance sheets while also capitalizing on the profit opportunities of Bitcoin, altcoins, and Stablecoins.
All-in-all, BlockFi does a pretty good job regarding the depth of its institutional investor offerings.
BlockFi Bitcoin Rewards Card
While a bit late to the party, BlockFi also moves in the direction of offering a crypto rewards card. The Bitcoin-only card can be used to make payments at physical stores and online. The more you spend, the more rewards you will get on your card. In addition, the Bitcoin that you will be getting as a reward can automatically start earning you compounding interest.
Now, let's talk numbers. The terms of the BlockFi Bitcoin Rewards Credit Card are pretty straightforward - you earn 3.5% back in BTC on every purchase during the first three months of your card ownership. After that, the percentage drops to 1.5%. If you top $50,000 annual spend, you will start earning 2%.
Using the card can earn interest of up to 2% APY as a bonus in BTC on your BlockFi Stablecoin holdings. A trading bonus saves you 0.25% on all eligible trades (the chargebacks are in BTC). In addition, you can get $30 in BTC for every friend you refer to join the program.
The rewards are paid out monthly. You will receive the BTC you have earned directly into your BlockFi account, where they will be eligible to earn interest daily. BlockFi states that there are no monthly fees to use the card. Additionally, you won't be charged an annual fee or foreign transaction fees.
The Bitcoin rewards credit card is issued in collaboration with Visa and launched in Q2 of 2021. According to BlockFi, the card is available only to US residents in qualified states, but the company suggests keeping track of the updates on its site for more information.
BlockFi Mobile App
BlockFi has a dedicated mobile app for Android and iOS device users. The app supports all features, including cryptocurrency-backed loans, interest-earning savings accounts, trading features, and more.
The app has a clean and aesthetic design. The usability is good, and it will suit even complete beginners. However, in terms of functionality and reliability, BlockFi's mobile app doesn't seem to fare well in the market compared to the best crypto apps.
The app has a limited number of downloads on both markets, compared to the mobile apps of its main competitors. Furthermore, its rating isn't exactly stellar. Users report different issues like technical glitches, persistent bugs, inability to trade and being locked into a position, and more. While it is hard to conclude whether these issues are mainstream or rare, we would suggest avoiding relying entirely on BlockFi's app for using its services. Make sure to use the desktop platform and the mobile app together to prevent any potential functionality issues.
The BlockFi fee policy is well documented on its site. For example, the platform doesn't charge any trading (aside from those mentioned above), deposit, or account maintenance fees.
However, you will be charged a fee each time you want to withdraw funds. The policy is as follows:
- BTC - 0.00075 BTC
- ETH - 0.02 ETH
- LINK - 0.95 LINK
- LTC - 0.0025 LTC
- Stablecoins - $10.00 USD
- PAXG - 0.015 PAXG
BlockFi's users can enjoy one free crypto withdrawal and one free Stablecoin withdrawal per calendar month. You can find more about the maximum withdrawal limits here.
For loans, there are no prepayment penalties or fees. However, there is a loan origination fee set at 2% of the loan amount.
In terms of crypto trading, BlockFi claims not to be charging any trading fees. However, Reddit users report notable discrepancies in the prices they see when buying and selling a particular digital asset, which is, in fact, a hidden trading fee. This isn't anything new for the industry, though, as many other service providers also employ similar tactics to be able to promote their offerings as "zero-fee trading." That means that BlockFi makes money in the same way as other providers in the industry. One should simply be aware that there is always a fee connected to trading activities in the end. That's the case for stocks, options and also cryptocurrencies.
BlockFi Promotions and Promo Codes
New members currently receive up to a $250 BTC bonus when funding a new BlockFi account. The offer is available here.
Supported Crypto Assets
BlockFi supports a limited number of digital assets you can use as crypto collateral. Here is a list of the cryptocurrencies suitable for lending, interest-bearing savings accounts, and trading on the platform:
- Cryptocurrencies for borrowing - BTC, ETH, LTC, PAXG;
- Cryptocurrencies for interest-bearing accounts - BTC, ETH, LTC, GUSD, USDT, PAX, USDC, PAXG, LINK, BUSD;
- Cryptocurrencies for trading - BTC, ETH, LTC, PAXG, USDC, USDT, GUSD, PAX.
BlockFi Pros and Cons
Now, let's take a minute to summarize the advantages and drawbacks of the platform to help you determine whether it is a good fit for your needs.
- A trusted and popular service provider, backed by leading institutional investors
- Partners with leading companies like Gemini custody to ensure the secure storage of its clients' funds
- Flexible interest rates and terms for loans and savings account offerings with no minimum account balance requirements
- No need to stake native tokens to ensure better interest rates or APY
- One free withdrawal per month
- A promising crypto credit card offering
- Extensive institutional investors-tailored services
- Competitive fee policy
- Advanced brokerage account features with instant trades
- Global availability.
- A limited number of supported cryptocurrencies
- Mobile app ratings range around 3/5 and can be improved upon
- The help center and FAQ sections on the site are not that extensive
- Loan duration is limited to 12 months.
How to Sign Up for a BlockFi Account
Signing up for a BlockFi account is easy and straightforward and provides a seamless financial and banking experience - just follow the steps mentioned below:
- Visit the website or download the mobile app;
- Enter your personal information (name, email, password, and referral code if applicable). Read and accept the terms and conditions and click "Submit";
- Go through the KYC/AML identity verification procedure. You will be required to prove your identity (a photo of an official document like a passport or ID).
After you complete these steps, you will have to wait for your account to be approved. Usually, this takes no more than a business day for individuals. However, if you are setting up a business account, it might take you up to 15 business days.
If everything is okay with your application, you can start using BlockFi's services.
BlockFi Review Summary
BlockFi is a worthy option for beginners who just want a solution provider that can ease the process of taking crypto loans as low as 4.5% APR and earn high interest of up to 8.6% APY on the money deposited in the platform with no minimum balance requirements. Considering the heavy backing of leading investors and the experienced team behind the project, we have all the means to believe that BlockFi will continue to grow and enhance its products and services.
But the BlockFi review also revealed that the bid-ask spread is a bit wider compared to other vendors. That's okay for HODLers and swing traders, but it may make a difference for crypto day traders with high trade frequency.
What is BlockFi?
BlockFi is a leading service provider in the digital assets space that provides users access to a cryptocurrency exchange, interest accounts, and crypto-backed loans. The platform offers an extensive set of services tailored to the needs of institutional investors. BlockFi is headquartered in New York, USA, but serves clients from all across the world.
Is BlockFi legitimate?
BlockFi is a legitimate business with clear and transparent history. It is registered with the U.S. Department of Treasury Financial Crimes Enforcement Network ("FinCEN") as a money services business. BlockFi has offices in New York, New Jersey, Buenos Aires, London, Warsaw, Krakow, and Singapore. It is licensed by several institutions.
How to open a BlockFi account?
You can open a BlockFi account in three easy steps. First, you have to download the mobile app or visit the website. Next, you have to specify the required personal details, including name, email, and password. Last, you have to pass KYC/AML verification by providing proof of identity. Once your account is approved, you are good to go.
Do I need a bank account to use BlockFi?
Not necessarily. It depends on how you want to process your withdrawals. If you don't plan on withdrawing in fiat like USD, for example, then you don't need to have a bank account. BlockFi allows you to make withdrawals in cryptocurrencies or Stablecoins directly to your wallet.
How much interest do I earn on BlockFi?
aIt depends on the amount and the type of cryptocurrencies you deposit on the platform. The interest rate can range between 0.5% and 9.3%. For smaller BTC, LTC, and ETH deposits, you will earn between 4.5% and 5.5%. For Stablecoins, the APY varies between 4% and 9.3%.
Can you lose money on BlockFi?
Yes, you can. Like all crypto-related trading platforms, you can expect to lose money if you don't ensure the proper risk management of your funds or trade recklessly. You can also lose money from extreme changes in crypto prices when you have taken out a loan.