BlockFi Updates Interest Rates for Its Bitcoin and Ether Deposit Accounts

Siamak Masnavi

On Tuesday (May 21), FinTech startup BlockFi  announced that it had decided to adjust the interest rates (effective June 1) on deposits held in its Bitcoin (BTC) and Ether (ETH) interest accounts.

BlockFi, which is based in New Jersey, United States, was founded in July 2017 by Zac Prince (CEO) and Flori Marquez (VP of Operations) and launched in August 2017. Among others, it is backed by ConsenSys Ventures, Fidelity subsidiary Devonshire Investors, Morgan Creek Digital, and Mike Novogratz's Galaxy Digital. 

In April 2018, BlockFi started offering USD loans collateralized by your cryptoassets (Bitcoin and Ether). Roughly six months later, it expanded the range of cryptoassets that it accepts as collateral to Litecoin and stablecoin Gemini dollar (GUSD).

Then on March 4, BlockFi launched the BlockFi Interest Account (BIA):

"... users can securely store their Bitcoin or Ether at BlockFi and receive 6% annual interest, paid monthly in cryptocurrency. Interest earned in a BIA compounds monthly, delivering an industry-leading APY of 6.2%. The program has been in private beta since the beginning of 2019 and already holds over $10 million in assets from retail, corporate, and institutional crypto investors."

At the time, BlockFi CEO Zac Prince made the following comment:

"The launch of BIA is another significant step in BlockFi’s goal of becoming the go-to provider of financial services for crypto investors. Lending and borrowing is readily available at the institutional level, and we’re excited to leverage our relationships and capital markets expertise to provide utility and yield on digital assets for all crypto investors.”

The company also said that the BlockFi Interest Account "is available to customers worldwide,"and that "client assets are custodied at Gemini Trust Company."

BlockFi said that this product offered the following advantages over competitors:

  • compound interest;
  • institutional backing;
  • interest paid monthly in crypto (i.e. in BTC if you have a Bitcoin interest account and in ETH if you have an Ether interest account); and
  • no-notice withdrawals.

We also found out via the FAQ section of the BlockFi website that although "there is no minimum or maximum deposit for the BlockFi Interest Account," only "deposits over 1 BTC or 25 ETH will accrue interest" and that "6% interest will only be earned on balances below 250 BTC or 7500 ETH."

Sadly, on March 20, there was some bad news announced for holders of the BlockFi Interest Account with large balances (over 25 BTC or over 500 ETH). 

BlockFi said that since the launch of the BIA program, it had discovered that "approximately 75% of BIA clients have a balance of less than 5 BTC or 150 ETH," and that the "median account balance is $7,000 USD."

Furthermore, it had seen "unanticipated demand from businesses like crypto hedge funds and VC firms," and realized that these firms open large BlockFi interest accounts "as a way to bolster their returns." 

BlockFi added that "starting April 1st, only BIA balances of up to and including 25 BTC or 500 ETH (equivalent to roughly $100,000 and $70,000 respectively) will earn the 6.2% APY interest rate," while "balances over that limit will earn a tiered rate of 2% interest."

The second bit of bad news—this one affecting everyone not just BTC/ETH whales—was that from April 5, it will be "adding a flat withdrawal fee of 0.0025 BTC and 0.0015 ETH." 

In today's blog post, BlockFi says that:

  • BlockFi interest accounts now have "over $100 Million in assets under management";
  • While the Bitcoin "borrowing and lending markets have developed into a vibrant and growing field," the Ether "lending market over the last couple quarters has become as stagnant as we’ve ever seen it." 
  • Last month's Q1 report by Genesis Capital showed that only 3% of their loan portfolio is in ETH.
  • ETH borrowing rates at Poloniex and Compound have gone as low as 0.01%.

Therefore, effective from June 1, BlockFi is adjusting the interest rates offered for its interest accounts:

  • BTC Interest Account: Interest rate on balances above 25 BTC is being increased from 2% to 2.15% (APY), while balances between 0.5 BTC and 25 BTC will continue to earn 6.2% (APY). 
  • ETH Interest Account: Interest rate on balances between 25 ETH and 100 ETH is being decreased from 6.2% to 3.25% (APY), and balances above 100 ETH will continue to earn 0.2% (APY). 

Featured Image Courtesy of BlockFi

Craig Wright Accuses Satoshi Nakamoto of Plagiarism

Michael LaVere
  • Craig Wright says if he is not bitcoin's creator then Satoshi Nakamoto plagiarized him.
  • Wright is in the midst of a $10 billion settlement with the estate of his late partner Dave Kleiman. 

Australian tech entrepreneur Craig Wright, who claims to be the original creator of bitcoin, says that Satoshi Nakamoto, the pseudonymous author of the Bitcoin whitepaper, plagiarized. 

Wright, who adamantly defends his position as bitcoin’s creator, was forced to enter settlement talks with the estate of his late partner Dave Kleiman following a judge’s ruling that he owed over $10 billion in the dispute. 

Now, the Australian computer scientist is altering his story slightly saying that Satoshi Nakamoto must have plagiarized his work in creating Bitcoin’s white paper. Speaking at the CC London Investment in Blockchain and AI Forum 2019, Wright told audience members that he intends to release a thesis written in 2008 which will confirm him as bitcoin’s rightful founder. 

He said, 

Either I am Satoshi or Satoshi plagiarized me. You can make the choice, I don't really care because he actually took whole paragraphs from my LOM. So it’s either me or… I don’t really care if you like it.

Wright has previously said that the name ‘Satoshi Nakamoto’ was a moniker for his collaboration with the late Dave Kleiman as the original inventors of bitcoin. 

Featured Image Credit: Photo via