Crypto lender BlockFi will increase interest rate payouts to their Interest Account customers starting April 1, they announced yesterday. The rates will increase to 6% APY (Annual Percentage Yield) for Tier 1 Bitcoin accounts, and 4.5% APY for Tier 1 Ethereum accounts. These are up from 4.9% and 3.2%, respectively.
BlockFi explained the move as a reflection of their strong fiduciary health, and wrote that “institutional lending markets have created opportunities that expand our margin.” BlockFi recently secured $1.55 million in funding from other crypto-focused firms, including ConsenSys Ventures.
2/ We are increasing our BIA rates for BTC and ETH, BTC back up to 6% and ETH back up to 4.5% for the first tier. This is driven by market dynamics which are discussed more in the blog post.
— Zac Prince (@BlockFiZac) March 17, 2020
The announcement has come amid one of the most eye-watering market sell-offs, not only in the history of cryptoasset markets, but even of traditional ones.
BlockFi touched on this elephant in the room in their announcement, emphasizing that their lending, trading, and withdrawal systems continued to function without a hitch despite their highest loads ever, and that “[they] did not liquidate USD loan client collateral below a price of ~$4,500, despite the market reaching lows of ~$3,800.”
One may speculate that, despite this stellar performance, BlockFi may be hurting for liquidity to bolster their books and are thus offering a high rate of return on Interest Accounts.
Whatever the case, things are likely to stay interesting in the crypto and traditional markets, and in all the industries connected to them, as unprecedented moves are made to bolster the global economy in the wake of COVID-19.
Featured image via Pixabay.