2021 seems to be the year for cryptocurrencies. Bitcoin hit an all time high of $60,000+, NFTs and meme stocks created thousands, if not, millions of dollars for investors, and yield farming became a great way for everyday investors like you and me to generate cashflow passively.
I was so eager in trying out these crypto projects again, and hopefully make some money, that back in May of this year, I found out I still had Bitcoin in my Coinbase wallet.
I held on to it for a while, trying to figure out what to do with it, until I came to know of BlockFi, a crypto-finance company in the US that provides financial services to individuals and institutions holding blockchain assets.
One of their products that really caught my eye was their interest account. This was back before I even learned about yield farming, so I thought this was a great place to park my BTC and let it earn interest.
BlockFi Services
Before looking at my BlockFi results, let’s take a look at what BlockFi offers. As of this writing, BlockFi offers four different services: Interest Accounts, Credit Cards, Loans and Trading.
Interest Accounts
By depositing your crypto in a BlockFi Interest Account (BIA), you earn interest up to 9% depending on which crypto you have.
Interest begins accruing the day after you fund your account, and accrues on a daily basis. Interest payments are then made on the last business day of each month, compounding monthly.
In addition, BlockFi uses a Tiered Interest Structure for their interest accounts. For BTC, they pay 4.5% up to 0.10 BTC. They pay 1% for 0.10 to 0.35 BTC. And finally, they pay 0.1% for anything beyond 0.35 BTC. Check there interest rates here!
Example Math
1 BTC deposited in a BlockFi Interest Account:
- 0.10 BTC would earn 4.5%;
- 0.25 BTC would earn 1%;
- 0.65 BTC would earn 0.1%
Interest: 0.0045 BTC + 0.0025 BTC + 0.000065 BTC = 0.007065 BTC
Total Balance: 1.007065 BTC
Effective Rate: 0.7065%
It’s a small rate, but we’re talking about Bitcoin here. So the value in USD is big.
Credit Cards
So BlockFi has a credit card called the BlockFi Rewards Visa® Signature Credit Card, with a tagline of “Earn Bitcoin on every purchase.”
- Unlimited Cashback: Earn unlimited 1.5% back in bitcoin on every purchase.
- Intro bonus: Earn 3.5% back in bitcoin on all purchases in the first 90 days of card ownership after activation, up to $100 worth of bitcoin.
- Trading bonus: 0.25% back in bitcoin on all eligible trades, up to a maximum of $500 in bitcoin each month.
- Spend bonus: Earn 2% back in bitcoin on every dollar over $50,000 of annual spend. Rewards rate increases from 1.5% to 2% after $50,000 of spend has been achieved and resets on the card anniversary date every year.
- Refer-a-friend bonus: $30 in bitcoin for every client referral, on top of the $10 reward from Refer-a-Friend program.
They even include these perks whenever you use your BlockFi Rewards Visa® Signature card:
- Enjoy special access to unforgettable experiences with your BlockFi Rewards Visa Signature card—from fine wine and food events, luxury hotels and premium car rental service to once-in-a-lifetime sporting events, shopping, and more.
- Your BlockFi Rewards Visa Signature card comes with 24/7 access to your Visa Signature® Concierge* for assistance booking travel, transportation, accommodations, event tickets—even restaurant reservations and golf tee times.
I don’t know much about those perks since it’s unclear how you get them, but I’ll leave it here so you can do your own research into it.
Loans
I don’t know much about lending, so I’ll keep it short for this part.
BlockFi offers crypto-backed loans. You can borrow money at rates as low as 4.5% APR using crypto as collateral. They have a minimum loan amount of $10,000 USD, and lending parameters may vary by jurisdiction.
When applying, the higher Loan-To-Value Ratio (LTV) you choose, the collateral you need will be smaller and the interest is higher. Lower LTV means, bigger collateral, and a lower interest rate.
Trading
Inside BlockFi, you can also trade multiple cryptocurrencies. It’s not the best trading platform out there, but it gets the job done. They don’t support many crypto as opposed to other exchanges, but the selection is a good enough list to get started with cryptocurrencies.
Here’s a list of the crypto they support:
- Bitcoin
- Ethereum
- Uniswap
- Litecoin
- Chainlink
- Basic Attention Token
- PAX Gold
- Dai
- USD Coin
- Binance USD
- Paxos
- Gemini USD
My BlockFi Results
I started BlockFi on June 23 and moved 0.01 BTC to the platform, which at that time, was valued at $330. Like I mentioned earlier, BlockFi Interest Accounts pay out every last day of each month. So if you look at my transactions log, the first payout you’ll see was on June 30 for 931 satoshis.
Month after month, I would receive more than 3000 satoshis. Since I keep the interest inside the platform and let it compound monthly, the interest I earn also grows, as you can see above.
I like what I’m seeing with BlockFi’s interface because it’s easier to understand how much I’ve earned. For me, the performance of cryptocurrencies are best calculated if you look at the number of tokens first rather than the fiat value. That way it’s easier to calculate.
My entire BlockFi portfolio is currently valued at $597.82, so my gain in USD is $267.82. That is an 81.16% growth compared to when I first started.
So in using BlockFi for 5 months, my 0.01 BTC had grown by 15,008 satoshis, $8.90 in rewards based on the price of BTC as of this writing — a 2.70% return so far, $258.92 was for the price appreciation.
That is not a bad return at all considering that I barely touch this account and do any work at all. If I had wanted to grow this further, I could’ve turn on repeat purchases and let the interest grow.
But this was an experiment to see if I can generate a passive cashflow from this platform and so far it has delivered some results.
If you want to try out BlockFi, use this sign up link to get a bonus of $10 of BTC!
But before joining BlockFi, I want to bring up something about this platform that needs to be given attention.
Note: BlockFi Lawsuits
Cryptocurrency is still considered a wild west. So it comes without saying that cryptocurrency platforms such as BlockFi would not be exempt from being targeted by the government, especially here in the US.
BlockFi has been served lawsuits from the states of New Jersey, Texas, Alabama, Vermont and Kentucky.
Basically, they’ve been given Cease and Desist orders and Show Cause orders in these states. If you want to keep up with these developments, please check BlockFi’s website.
Final Thoughts
For me, BlockFi is a decent platform to park your crypto assets and let it earn interest. Of course, there are better alternatives out there such as Cake DeFi and other yield farming opportunities, but BlockFi seems like a soft intro to passive crypto income.
It is easy to understand and get started with. Once you’re inside, you set and forget it. That’s how mine turned out to be.
As for my plans with BlockFi, even though the returns are lower compared to other opportunities, I’m going to keep my assets stored here. I want to make sure that while I’m pursuing other riskier projects, I also have safer projects on my basket.
Once I see that BlockFi’s value has grown beyond 100%, then I will take out my capital and let the profits generate more profits for me. This way, I can use the capital into other profitable projects and still have a stream of passive income from the platform.
Don’t forget your $10 BTC bonus when you sign up!