Lucrative Interest Rate Becomes the Talk of the Town
The lines between traditional financial institutions like banks and digital currencies seem to be blurring at an astounding rate.
In a development that could make the idea of holding cryptocurrencies a tempting one, the Gemini-backed crypto loan platform BlockFi is now encouraging users to deposit bitcoin (BTC) and ether (ETH) into accounts that pay 6.2 percent annually.
Notably, the attractive rate of interest far surpasses the 0.8 percent rate that the majority of the banks offer to clients on their fiat deposits.
However, it’s worth highlighting that interest paid out by BlockFi will be in the same unit as the cryptocurrency deposited in the account – bitcoin or ether. The upside to this, however, is that digital currency enthusiasts will get the opportunity to accumulate as much crypto as possible to reap maximum harvest during the next bull run.
In its quest to become the “go-to provider” of financial services for crypto enthusiasts, BlockFi offers an array of attractive loan facilities. The lending platform offers loans against major cryptocurrencies such as bitcoin, ether, and litecoin at an interest rate of 4.5 percent.
BTCManager informed its audience on July 26, 2019, how Mike Novogratz’s Galaxy Digital Ventures invested $52.5 million in the cryptocurrency lending platform. BlockFi has so far bagged close to $58 million in various funding rounds and plans to launch a portfolio line of credit and crypto-backed credit card very soon.
Zac Prince, CEO, BlockFi, said:
“BlockFi is the first crypto challenger bank. Bitcoin and crypto lending, especially to retail investors, is a nascent market. It has though been pushed on by institutional interest over the last year or so.”
Huge Overnight Popularity
Although BlockFi launched the product only on March 5, 2019, it has quickly succeeded in attracting eyeballs of influential people and thought leaders in the cryptoverse.
Anthony Pompliano, the founder of Morgan Creek Digital, detailed in a blog post the nitty-gritty of BlockFi’s latest offering. “Pomp,” said that the product is getting popular on a viral level due to the lucrative interest rates being offered on crypto deposits.
Brad Michelson, the director of marketing at BlockFi, tweeted on March 6, 2019, that ever since the official launch of the product, BlockFi’s website has witnessed a colossal increase in traffic.
With that said, it remains to be seen whether the allure of enviable interest rates will attract more people to the nascent industry.