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What is BlockFi
A provider of financial services, BlockFi provides goods and services based on cryptocurrencies. The business is headquartered in New Jersey, USA, and was established in 2017.
By putting their bitcoin assets into an interest-bearing account, BlockFi members can earn interest on their cryptocurrency investments. Its competitive interest rates when compared to those of conventional banks have made it a well-liked choice for cryptocurrency holders looking to generate passive income from their assets.
In addition to interest-bearing accounts, BlockFi also provides loans backed by cryptocurrencies that let customers borrow money using their bitcoin holdings as security. Additionally, it offers a trading platform where users can purchase and sell cryptocurrencies.
For people and organizations seeking access to the cryptocurrency market in a more conventional financial services environment, BlockFi has grown to be a popular choice. As of 2021, the company had amassed over 1 million users and had raised over $500 million in funding.
The history of BlockFi
Zac Prince and Flori Marquez, two seasoned financial professionals with experiences in trading, venture capital, and private equity, created BlockFi in 2017. The company’s goal was to offer cryptocurrency investors financial services and products that were more in line with conventional financial services.
BlockFi received $1.55 million in seed funding in August 2017 from backers including as ConsenSys Ventures, SoFi, Fidelity, and Kenetic Capital. A $52.5 million Series A fundraising round, led by Valar Ventures and including Winklevoss Capital, Fidelity, and others, came after that in 2019.
The company has since launched interest-bearing accounts for Bitcoin (BTC) and Ethereum (ETH), and has since added support for additional cryptocurrencies. At that time, the company has proceeded to diversify its offerings. Moreover, a loan product backed by cryptocurrencies was introduced, enabling users to borrow money and use their bitcoin as security.
BlockFi completed a $350 million Series D fundraising round in March 2021, valuing the business at $3 billion. Tiger Global Management, DST Global, and other investors also took part in this investment round, which was organized by Bain Capital Ventures.
BlockFi has more than 1 million subscribers as of the beginning of 2023 and provides its services in more than 100 nations. The business intends to introduce a credit card with Bitcoin rewards and a cashback program backed by Bitcoin in the future as it seeks to diversify its products.
How BlockFi works
BlockFi is a financial services company that offers a range of cryptocurrency-based products and services. Here is how some of its key offerings work:
- Interest-Bearing Accounts: BlockFi offers interest-bearing accounts for a range of cryptocurrencies, including Bitcoin, Ethereum, and others. Users can deposit their cryptocurrency into these accounts and earn interest on their holdings. The interest rates offered by BlockFi are typically higher than those offered by traditional banks, which has made it an attractive option for crypto investors seeking to earn passive income on their holdings. The interest rates offered are variable and can change over time based on market conditions.
- Crypto-Backed Loans: BlockFi also offers cryptocurrency-backed loans, allowing users to borrow money using their cryptocurrency as collateral. Users can borrow up to 50% of the value of their cryptocurrency holdings, with interest rates starting at 4.5% per year. The loans are typically funded within 90 minutes and can be used for a variety of purposes, such as paying off high-interest debt or making a large purchase.
- Trading Platform: BlockFi also offers a trading platform that allows users to buy and sell a range of cryptocurrencies, including Bitcoin, Ethereum, Litecoin, and others. The platform is easy to use and features a clean, intuitive interface. Users can also set up recurring purchases to automatically buy cryptocurrencies on a regular basis.
- Credit Card: BlockFi has plans to launch a Bitcoin rewards credit card, which will allow users to earn Bitcoin rewards on their purchases. The card will have no annual fee and will offer a range of other benefits, such as no foreign transaction fees and unlimited trading with no trading fees.
Overall, BlockFi’s offerings provide a range of options for crypto investors who are looking to earn passive income on their holdings, borrow against their crypto assets, or trade cryptocurrencies in a user-friendly and convenient way.
Does BlockFi charge a fee
Yes, BlockFi does charge fees for some of its services, but the fees are generally competitive with those of other financial services companies. Here are some of the fees that BlockFi charges:
- Interest Account Fees: BlockFi charges no fees for opening or maintaining an interest-bearing account. However, there may be fees associated with certain transactions, such as withdrawals.
- Crypto-Backed Loan Fees: BlockFi charges an origination fee of 1% to 2% on crypto-backed loans, depending on the loan amount and loan-to-value ratio. There may also be fees associated with late payments or prepayments.
- Trading Fees: BlockFi charges fees for buying and selling cryptocurrencies on its platform. The fees vary depending on the currency and the size of the transaction. BlockFi also charges fees for converting one cryptocurrency to another.
- Withdrawal Fees: BlockFi allows one free cryptocurrency withdrawal per month. Additional withdrawals may be subject to a fee, depending on the currency and the withdrawal amount.
- Wire Transfer Fees: BlockFi charges a fee for incoming and outgoing wire transfers, although some customers may be eligible for fee waivers.
It’s important to note that the specific fees charged by BlockFi may vary depending on the user’s location and other factors. Users should review BlockFi’s fee schedule carefully before using its services.
