As more and more internet users become initiated into the world of cryptocurrency, options for buying, trading, and investing crypto have become more accessible and widely known. Today, you can earn interest on your crypto without much effort through a method called crypto staking.
While many avenues for earning interest on invested crypto have existed, the most widely known is BlockFi. The popularity of this site is unsurprising, as you can earn up to 8.6% interest if you choose to invest in crypto on BlockFi.
This article will shed light on how you can earn interest on BlockFi by investing in a cryptocurrency of your choice today. By the end, you will have a much better understanding of what BlockFi is and how to use the platform.
What is BlockFi?
Founded in 2017, BlockFi is a New York City-based online lending platform that offers competitive interest-bearing savings accounts for many cryptocurrencies. The list includes Bitcoin, Litecoin, Ethereum, and U.S Dollar Stable Coins.
BlockFi generates interest on cryptocurrency assets that lending funds hold to borrowers. Once the platform receives your funds, in the form of a deposit, those assets begin to earn interest from the very first day onward. Moreover, BlockFi is backed by some of the world’s top investors, including Coinbase, Morgan Creek, and Peter Thiel’s Valor Ventures, who founded PayPal and was the very first investor in Facebook.
Interestingly, unlike nearly all of BlockFi’s competitors, the site does not offer native tokens. Rather, BlockFi offers simple products with even simpler terms that are chiefly designed to help cryptocurrency holders do more with their digital assets.
Why Choose BlockFi?
You might be surprised to find out that BlockFi is not a decentralized platform. Despite this, BlockFi is one of the most popular companies offering cryptocurrency-backed loans, which might have something to do with the fact that they are registered with the U.S Department of Treasury Financial Crimes Enforcement Network (FINCEN) as a money services business. FINCEN keeps the crypto reserves stored with the crypto-custodian Gemini, a New York-based trust company.
With BlockFi interest, you can earn on cryptocurrencies such as Bitcoin, Ethereum Litecoin, and U.S Dollar Stablecoin. This feature is great for those who have crypto sitting idle in a wallet or an exchange as it provides the ability to earn more crypto simply while holding your assets. Moreover, you also get to choose the currency that you are going to receive that interest payment in, which is then paid monthly on a compounding basis.
All this is done by collateralizing your cryptocurrency. Previously if you wanted to free up some of your cryptocurrency funds, you’d need to sell your crypto in exchange for Fiat currency. However, with BlockFi, you can simply use your Bitcoin, Ethereum, or Litecoin as collateral to borrow funds. With BlockFi, you can borrow from $5000. However, the limit that you borrow up to will obviously depend on the amount of collateral you will deposit.
You can also exchange and manage your crypto assets with the likes of Bitcoin, Ethereum, U.S Dollar Stable Coin, and Litecoin. What’s more, trading on BlockFi is simple and easy, and you can start doing so as soon as your funds are deposited into your account. Finally, BlockFi has a Bitcoin reward credit card on which you can earn 1.5% interest back in Bitcoin.
How to Earn Interest on BlockFi
To get started earning interest on BlockFi, you’ll first need to open up a BlockFi account. As mentioned, BlockFi is not a decentralized platform, so when you are signing up, you’ll need to enter your address and contact info along with a photo ID to verify the account.
Step One – Log in
Once you are logged in, if it is for the very first time, you will be prompted to deposit funds into your account so that you can begin earning interest. Before doing so, however, it is highly recommended that you set up two-factor authentication on your BlockFi account to ensure that the account is as secure as possible before depositing any funds. You can do so under the security settings of your profile.
From the main account summary on your BlockFi dashboard, you can view the total dollar value of your crypto. You can view the interest that has been paid and any active loans that you may have. You can also view some market data here concerning some of BlockFi’s supported tokens, as well as your transaction history.
Step Two – Deposit Funds
To deposit funds, click the button marked ‘deposit’ located in the top right-hand corner of your account summary screen. You can deposit crypto from any external platform, or you can deposit U.S dollars to purchase Stable Coins, which you can then wire as long as the name matches the name on your BlockFi account. Alternatively, you can choose to deposit an already existing currency like Bitcoin or Litecoin.
Once you select your chosen cryptocurrency from the dropdown menu, BlockFi will show you a wallet address and a QR code to which you can send your funds. Just make sure that you send the correct type of crypto to this address, or else you could risk losing your funds.
Step Three – Earn Interest
Once you finalize your deposit and it has been received, you will instantly start earning interest on it. Interest accrues daily, and the payments go out on the first business day of each month along with a statement.
With BlockFi, the ability to earn interest on your crypto has never been easier. The process is extremely simple and straightforward and you can easily earn up 8.6% in interest on your crypto. Those who grow tired of having their crypto sitting idly in a wallet or on an exchange should hold some of their assets on BlockFi to ensure that their crypto isn’t simply sitting around without accruing any real value.
To earn interest on your crypto, visit BlockFi and open up an account today!