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In this interview, Brad Michelson Director of Marketing at BlockFi explains how BlockFis new feature is a cryptocurrency account which generates interest. Brad was the Director of Strategy at a boutique NYC agency, he managed 30+ clients, receiving published industry-recognized case studies on strategy, execution, and campaign performance. He was most recently part of the team that launched AirSwap, a decentralized cryptocurrency marketplace.
What is BlockFI?
BlockFi is the leading financial services provider in the crypto ecosystem. We currently offer crypto interest accounts and USD loans backed by cryptocurrency, with more exciting products coming in the near future.
What is the BlockFI Cryptocurrency interest account?
The BlockFi Interest Account (BIA) is a way for crypto investors to earn more crypto while they hold. By storing their Bitcoin or Ether at BlockFi, BIA clients can earn 6.2% compounding interest APY. Interest is paid out monthly and in cryptocurrency, meaning if you store your BTC with us, you will earn interest in BTC.
Who can apply for one?
BlockFi supports clients worldwide, except for people living in sanctioned counties of where legally restricted.
Is there a minimum or maximum investment?
There is no minimum or maximum deposit for the BlockFi Interest Account. However, only deposits over 1 BTC or 25 ETH will accrue interest. Additionally, 6.2% interest will only be earned on balances below 250 BTC or 7500 ETH.
Will investors in the Cryptocurrency interest account need to undergo KYC?
Yes, all BlockFi clients undergo KYC before funding their account.
In what cryptocurrencies is the interest account available in?
The BIA currently supports BTC and ETH, with more options coming soon.
In what currency will the cryptocurrency interest be paid back to depositors?
BIA clients earn interest in their deposited currency. So if you store BTC with BlockFi, you’ll earn interest in BTC. The same thing goes for ETH.
Are there any lockup periods?
There are no lock-up periods with the BlockFi Interest Account.
How does BlockFi ensure that the funds are safe and are the funds still safe in wild market swings?
First, all client funds are stored at Gemini, a New York trust company regulated by NYDFS. To generate yield for our customers, BlockFi lends the funds to trusted institutional and corporate borrowers. These deals are typically over-collateralized in USD, which provides security to our clients and our business in the case of market swings.
In your opinion what are the differences in risk and returns between lending to margin traders on exchanges and using BlockFi’s Cryptocurrency interest account?
The risk exposure when margin trading are significantly higher than the risks associated with using a BIA. For people looking to access this sort of tool, we often point them to services like Bitmex to receive that kind of leverage. When we lend out to our institutional counterparties, our deals are often over-collateralized, meaning we get more value in USD than we are lending out in crypto. This gives us the ability to place margin calls on our borrowers, providing security for the funds. That kind of security is not available when margin trading.
What other products can we expect from BlockFi in the future?
We’re currently working on a few new products that we’re excited to offer our customers. We believe that for the industry to grow and attract new users, there need to be base-level services that already exist in the traditional financial world that they can easily adapt to the crypto ecosystem. For example, later this year we’re planning on launching crypto-backed credit cards that earn users cash-back rewards in Bitcoin. There are a few other products and functionality we’re working on but are not quite ready to discuss yet.
For more information please visit: BlockFi
We thank Brad Michelson for the interview.
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