Tier 1 rates remain unchanged at 6% APY for BTC and 5.25% APY for ETH; introducing changes to BTC Tier 2 rate and adding new tier for both BTC and ETH.
Investment markets are never static—they shift and grow and contract based on economic factors ranging from the obvious to the obscure. The cryptocurrency market is no different, as we’ve seen from dramatic swings in the past year alone. To stay competitive, crypto platforms have to adapt to these changing conditions, and that’s why BlockFi is announcing new rates and tiers for Bitcoin (BTC) and Ethereum (ETH) holdings in the BlockFi Interest Account (BIA) starting April 1, 2021.
Almost all clients will continue earning the same rates on their crypto and will be unaffected by the changes. BlockFi will make the following adjustments.
Making Adjustments That Make Sense
These adjustments are part of BlockFi’s ongoing mission to continue delivering high-quality, long-term service for our clients while expanding our innovative product offering in a competitive and scalable way.
Rates can change due to market conditions, and while that doesn’t happen often at BlockFi, these shifts can go in either direction. The last time we adjusted the rate for BTC was in April 2020, when Tier 1 rose from 4.9% APY to 6% APY back when bitcoin was worth approximately $7,000.
Over the past 12 months, we have maintained steady interest rates even as bitcoin has appreciated to over $55,000. As our track record shows, rates may rise or fall, but earning potential remains high at BlockFi.
Source: BTC-USD Monthly Open Price. Apr-21 BTC-USD estimate based on price data on March 16, 2021
So why are these shifts happening now? Well, pricing is influenced by a number of factors, including conditions in the crypto lending market
, supply and demand, and BlockFi’s goal of offering a high rate to as many folks as possible.
As a general rule, the interest we pay to our clients is based on the yield that we can generate from lending, which directly correlates to market demand in the space. That demand is set by the rate that financial institutions are willing to pay to borrow specific crypto assets, and it can vary between different asset types.
Bitcoin, in particular, has increased in value considerably this past year, hitting a peak of more than $61,000 in mid-March. The recent price fluctuations, coupled with shifting demand in the lending space, are the main reasons we’re introducing this latest round of changes.
If you’d like to learn more about the crypto lending market and how BlockFi manages risk, take a listen to this interview
with our Chief Risk Officer Rene van Kesteren, and this interview
with our Founder and CEO Zac Prince. Want to know more about how we’re building a path to the future? Check out the details about our latest Series D fundraising round
Disclaimer: Nothing contained in this announcement should be construed as a solicitation of an offer to buy or offer, or recommendation, to acquire or dispose of any security, commodity, investment or to engage in any other transaction. The information provided in this announcement is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. This announcement is not directed to any person in any jurisdiction where the publication or availability of the announcement is prohibited, by reason of that person’s nationality, residence or otherwise.
Neither BlockFi nor any of its affiliates or representatives provide legal, tax or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.
Digital currency is not legal tender, is not backed by the government, and crypto interest accounts are not subject to FDIC or SIPC protections. For more information, please see BlockFi’s Terms of Service.