On January 23, 2020, Winklevoss twins-backed digital currency platform BlockFi announced that it had revised its rate of interest paid on the yield it generates from lending Bitcoin (BTC) and Ether (ETH). The new rates will be effective from February 1, 2020.
Reacting to Market Economics
BlockFi, one of the leading cryptocurrency startups which has become the go-to platform for people with idle digital currency savings to earn extra income has decided to revise its offered interest rates.
Per sources close to the matter, BlockFi’s new yields for those lending up to 10 BTC will be 5.1. percent. At present, customers loaning up to 5 BTC see a yield of 6.2 percent. Similarly, BlockFi’s ETH lenders will experience a rate cut from 4.2 percent to 3.6 percent on loans up to 500 ETH.
Interestingly, interest yields are set to increase form institutional investors as BlockFi noted that investors who have BTC balance of 5 or above will enjoy interest yield of 3.2 percent vis-a-vis current rate of 2.2 percent. For ETH investors, the rate will jump from the current 0.5 percent to 2 percent.
In an email to customers, Zac Prince, CEO, BlockFi, said:
“As market conditions change, particularly price sentiment, this has an effect on the prices in the crypto borrowing market which is a big driver of rates that BlockFi can offer to our clients.”
“Our rates are still way ahead of alternative options and we remain the only retail-focused interest-earning platform that is US-domiciled/regulated, institutionally backed and doesn’t have a utility token.”
Attracting More Institutional Investors
The new interest rate adjustments introduced by BlockFi suggest that the organization is trying its best to attract institutional money toward digital assets. In fact, for long, BlockFi has been steadily narrowing its business focus down to institutional investors.
As reported by BTCManager on October 19, 2019, BlockFi had launched BlockFi Institutional Services – a platform designed to give institutional investors such as market-makers, hedge funds, exchanges and family offices exposure to financing solutions for digital assets.
On a more recent note, on January 3, 2020, BlockFi announced that it will soon be launching a Bitcoin Rewards credit card to promote the use of crypto among the masses.