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BlockFi Is a $3 Billion Startup That Lets You Earn Compound Interest on Crypto

It's changing the way people think about digital currencies.

Sep 28 by Futurism Creative
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Image by Unsplash

By now it’s obvious cryptocurrencies are not a fad. In fact, with the world crypto market now worth over $2 trillion, a lot of financial advisors are telling younger clients to allocate anywhere from 1 to 5 percent of their portfolios to crypto. And the good news is that now there’s actually a smart way to do it thanks to a trailblazing crypto startup called BlockFi.

Founded in 2017 by Zac Prince and Flori Marquez, BlockFi is an online crypto investing and management platform. It was specifically created to bridge the gap between the worlds of traditional finance and crypto. To do that, the company has used multiple rounds of venture capital funding over the last four years to make traditional financial products and services available to crypto investors for the first time.

How are things going so far? Well, a year ago BlockFi was valued at $435 million. Today they are valued at $3 billion, and there’s been talk that yet another round of funding could push them to $5 billion. So things are going pretty well.

Today BlockFi offers crypto investors a variety of wealth management services. However, their marquee product is still the BlockFi Interest Account. And it is changing the way people invest in crypto.

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The BlockFi Interest Account

Image via BlockFi

The BlockFi Interest Account (BIA) is the world’s first compound interest cryptocurrency savings account. With compound interest savings accounts, the interest you earn over a specified period of time is added to the principal balance, which ultimately allows you to earn interest on interest and grow your wealth exponentially. Compound interest has been available in traditional finance for centuries. However, it hasn’t been available for crypto investors until now.

The interest rates offered on BlockFi Interest Accounts are pretty impressive. Right now you can earn:

  • 4.5% annual percentage yield on Bitcoin deposits up to .1 BTC
  • 5% annual percentage yield on Etherium deposits up to 1.5 ETH
  • 4.75% annual percentage yield on Litecoin deposits up to 20 LTC
  • 8% annual percentage yield on Gemini deposits up to 40k GUSD
  • 8% annual percentage yield on USD Coin deposits to 40k USDC

The rates for GUSD and USDC are especially notable. GUSD and USDC are “stablecoins” that are permanently pegged to the U.S. dollar. These high interest rates thus provide crypto investors with a built-in way to mitigate some of the risk that comes with trading in other cryptocurrencies.

Other Services

Image via BlockFi

Earning compound interest on your crypto holdings might be the most obvious reason to sign up for BlockFi, but it’s not the not the only reason. BlockFi is a comprehensive crypto platform that lets you easily manage your crypto assets and optimize portfolio allocation. Users can add funds to their account with their local fiat currency, making deposits and withdrawals straight from their checking accounts.

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BlockFi also offers crypto-backed loans. Using your crypto holdings as collateral, you can get loans worth up to 50 percent of the value of your assets at a highly competitive 4.5% APR. This lets you put your crypto holdings to work without cashing out. And it means you won’t be left kicking yourself when the value of a particular currency you used to have in your portfolio skyrockets down the road.

Last but not least, BlockFi’s newest product is the BlockFi Rewards Visa Signature Card. With no annual fee and no foreign transaction fees, this credit card lets you earn 3.5% in Bitcoin for every dollar you spend for the first three months, then 1.5% on every dollar you spend up to $50,000 per year, and 2% on every dollar you spend over $50,000 per year. It also lets you earn 0.25% in Bitcoin on all eligible trades up to $500 worth of Bitcoin per month, plus $30 in Bitcoin for every client referral.

Given all the growth we’ve seen over the past few years, one could make a pretty strong case that crypto is the asset class of the future. If you’re looking for a smarter way to build and manage your portfolio of digital assets, you need to take a look at BlockFi.

Futurism fans: To create this content, a non-editorial team worked with an affiliate partner. We may collect a small commission on items purchased through this page. This post does not necessarily reflect the views or the endorsement of the Futurism.com editorial staff.

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