What is BlockFi?

BlockFi is a whole ecosystem for experienced bitcoin traders. Over 1 million verified members and more than $10 billion in assets make up the company.

BlockFi offers a variety of options that platform users might find helpful. Besides its cryptocurrency exchange, BlockFi offers low-interest loans, credit cards with cryptocurrency incentives, and interest-bearing accounts with up to 8% APY.

Cryptocurrencies Available

The only cryptocurrencies that BlockFi is compatible with are BTC, ETH, LTC, PAXG, USDC, USDT, GUSD, and PAX. Unfortunately, Fiat money is also not supported by BlockFi. Instead, you can create GUSD, a stablecoin, through a wire transfer or bank transfer. 

Trading Experience 

BlockFi offers bitcoin trading at an affordable price. In addition to currency pairings, users can also purchase individual coins. Bitcoin/Litecoin (BTC/LTC) is an example of a pair trading in which one coin is traded for another.

In a similar manner to traditional banking, BlockFi allows customers to set up automated bitcoin purchases. The BlockFi Wallet instantly displays the true price without additional fees by combining quick execution from several exchanges.

BlockFi offers tax-loss harvesting, a method for reducing taxable income by using losses rather than profits.

BlockFi Wallet

To store cryptocurrency, BlockFi Wallet is used as the default storage method. Your crypto assets and stablecoins can be purchased, traded, held, and safeguarded through this interest-free account. In addition, your assets are protected by BlockFi and will never be lent out.

In most cases, external cryptocurrencies can be deposited into the wallet and assets held within BlockFi Wallet can be moved out. However, it is essential to note that this function is restricted to users who use specific cryptocurrencies within the United States.

There are three assets in this group: Dogecoin (DOGE), Bitcoin Cash (BCH), and Algorand (ALGO). Unfortunately, it is impossible to withdraw or deposit these cryptocurrencies using a personal wallet.

BlockFi Credit Card

The use of reward credit cards is widespread among customers. For example, during the first 90 days of use, BlockFi rewards cardholders up to $100 in bitcoin back on all purchases.

In addition to the particular period, users will continue to receive 1.5% in coin prizes. If you spend more than $50,000 annually, the cryptocurrency incentive rate increases to 2%.

An additional advantage of the card is that it does not require yearly membership fees, and there are no restrictions on overseas purchases.

BlockFi Interest Rates

Customers residing in the United States cannot access interest-bearing accounts. However, with the SEC, BlockFi is registering a similar product called BlockFi Yield. Therefore, purchasing a version of this new product in the United States would be possible if the Securities and Exchange Commission approved it.

Fees

BlockFi does not charge trading commissions. Since the cost of the spread is already factored into the advertised price on other exchanges, you might be able to find cryptos for cheaper there. Rather than focusing on the advertised price, pay attention to the real price you’re trading at. Prices you may exchange may differ from the market prices you see displayed. This will improve your record-keeping and allow you to keep track of your transactions.

Withdrawal Fees

You will not be charged a fee if you withdraw funds to a bank account using an ACH transfer, but domestic wire transfers will cost you $20.20.

Depending on your external wallet, you may be subject to a withdrawal limit and a minimum withdrawal amount. In addition, cryptocurrency withdrawal fees vary depending on the type of cryptocurrency. For example, it is possible to withdraw up to 100 BTC every seven days, even though this won’t affect many regular investors.

There are a few assets on BlockFi that allow a single free withdrawal every calendar month, such as BTC, USDT, USDC, LTC, and DAI. However, you will always have to pay a withdrawal fee for other assets like ETH, LINK, PAXG, UNI, and BAT.

Withdrawals are charged in the cryptocurrency corresponding to the withdrawal. Therefore, withdrawing ETH requires paying 0.015 ETH. It is important to review the conditions before transferring assets from BlockFi to your own wallet, as fees and limitations may change in the future.

BlockFi Loan

The BlockFi Loan is similar to other margin loans in that you receive US cash deposited into your bank account while your bitcoin holdings are leveraged as security. The method is practical because it doesn’t require a credit check and doesn’t require you to sell your cryptocurrencies. As soon as your loan is repaid, you receive the cryptocurrency used as security.

Your Bitcoin can be used to borrow US dollars through BlockFi. A minimum amount of $10,000 must be provided to qualify for a loan. Approximately 50% of the loan value is financed by the loan-to-value ratio (LTV). Therefore, your coins will need to be collateralised to the tune of 50%.

BTC, ETH, and LTC are among the coins that can be used. A 12-month loan will cost you 4.5 per cent in interest. Origination charges may also apply.

Cryptocurrencies tend to be highly volatile, so it is easy to go outside of the 50% LTV range. If the LTV reaches 70% (also known as a trigger event), you will receive a communication from BlockFi asking you to add more collateral.

Is BlockFi Safe?

BlockFi uses different security procedures for users and platforms. Users must confirm their identity when registering to prevent fraudulent behaviour on the BlockFi network. You’ll need a government-issued photo ID and some basic personal information to do this. In addition, BlockFi offers two-factor authentication to further secure user credentials. Although two-factor authentication is not currently required, it is highly recommended.

BlockFi maintains its money in cold storage with the help of partners, including Gemini. Because cold storage facilities are not connected to the internet, assets are often more secure.

Signing up 

The process of opening a BlockFi account is fairly straightforward. BlockFi asks for personal information such as your legal name, country of residence, and address as part of the registration process. Before you can trade on the platform, you must undergo an identity verification process, so make sure you have your photo ID on hand.

Customer Service

With BlockFi, users can open a ticket, speak with a professional, or chat with a chatbot to get in touch with customer service. This might benefit customers who have questions or need assistance. In addition, users can access BlockFi’s help centre and support options for answers to frequently asked questions.

There is still no clear indication of which ADA-specific services users can now access. For example, BlockFi Loan borrowers have access to a different site to communicate with the loan department.

Pros And Cons

Pros

• Crypto-backed loan
• Reward credit card
• User-friendly crypto trading

Cons

• A limited selection of cryptocurrencies
• Withdrawal fess
• No withdrawals on some cryptocurrencies

Is BlockFi Right For you?

Cryptocurrency lovers who want to use cryptocurrency to manage various aspects of their finances will find BlockFi to be the perfect solution. You can swiftly and conveniently buy, sell, and trade restricted coins from a custodial wallet while using other services, such as rewards cards.

A more experienced user may find BlockFi unsatisfactory due to the limited currencies available for trading compared to Coinbase, eToro, and Gemini.

Final Verdict

Cryptocurrency exchanges that offer distinctive features, such as cryptocurrency-backed loans, cryptocurrency rewards credit cards, and a simple user interface may find BlockFi to be a viable option. However, the importance of being aware of some of the issues customers have encountered with delayed customer service response times and late withdrawals cannot be overstated.

***