Its No April Fools Joke, BlockFi Raises Interest Rates For BTC and ETH Holders Starting Apr 1st

The crypto lender BlockFi made the announcement that it will raise interest rates on holdings in Bitcoin (BTC) and Ether (ETH), starting with April 1.

Users that hold as much as 5 BTC are going to earn an annual percentage yield (APY) of 6%, a solid boost from the 3.6% that it is at the moment. On the other hand, ETH holders will get 4.5% APY bump for as much as 500 ETH, which is quite more than the 2-3.6% APY they can get now. The USD Coin (USDC) and Gemini Dollar (GUSD) will remain at the 8.6% APY.

2 Key Factors In Determining the Rise in Interest Rates

It can be said the move is rather unusual seeing interest rates in all traditional markets went down as a result of the risks brought on by the coronavirus (COVID-19). BlockFi’s CEO and founder, Zac Prince, had this to say about the factors that influence his firm to raise its interest rates:

“Supply constraint as other market participants have pulled back on their lending activities, and ample opportunities for market-making and arbitrage coming out of the extreme volatility that we experienced last week.”

He added that the balance sheet at BlockFi is very strong and the company’s margin has extended as a result of the shifts currently happening in the institutional lending markets.

BlockFi Also Had Fewer Loan Liquidations

During the BTC crash from last week, BlockFi had fewer loan liquidations and no loss in the lending book. It said its USD loan collateral wasn’t liquidated below approximately $4,500, in spite of the market having lows of about $3,800.

BlockFi crypto lending company was created back in 2018 and developed significantly in only 2 years. It had its revenues growing more than 20 times back in 2019, at the moment holding over $650 million in assets. Last week, it added cash transfers support for non-crypto users to buy crypto worth of $10 for the first time and to get interest on their investment. BlockFi is backed by Morgan Creek Digital and Valar Ventures. It raised more than $100 million in funding until now.

You can start using BlockFi by going to their official website.

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