blockfi review

BlockFi Review 2022: Is This Cryptocurrency Platform For You?

Cryptocurrencies like Bitcoin, Ethereum, LINK, PAX Gold aren’t going anywhere despite the recent downturn in prices. Investors looking to maximize their returns may consider loaning their unused assets to make extra money while holding the asset for the long run.

BlockFI is one of the first crypto-lending platforms on the market. Check out this BlockFI review to see if this is the platform for you.

What Is BlockFi?

Founded by Zac Prince and Flori Marquez in 2017, BlockFi is one of the leading cryptocurrency exchange platforms worldwide. Its core service offering provides credits and loan facilities to individuals and companies with limited access to financial facilities. Key features such as high-quality rating, quality financial resources, and independence set it apart from its competitors.  

How Does BlockFi Work?

BlockFi works as a crypto exchange, wallet, and bank for individuals and businesses around the world. It offers loans, interest-earning accounts, and trading.

BlockFI makes money as a crypto lender. It borrows money (i.e., crypto holdings) from interest-bearing account holders for a low-interest rate and lends it to borrowers at a higher interest rate. 

Pros of BlockFi

Interest on Deposits 

BlockFi has set up features like its interest-bearing account that works like a traditional savings account in financial institutions. However, BlockFi offers protection to every account type irrespective of the amount of resource it holds.

One can earn between 3% and 9% compounding interest on their cryptocurrency holdings in a BlockFi Interest Account. In addition, the account has no hidden transactional fees, no minimum balance requirement, and daily interest rates are disbursed based on currency type and fluctuate with the current market price chart. 

Interest accrues daily with monthly deposits in your account– you’ll earn interest on your deposits each month. U.S. investors will get a report from BlockFi at the end of each year stating how much interest they received. However, international customers are responsible for their tax calculations.

Collect a Loan Above Your Portfolio Value

BlockFi’s BlockFilet allows its users to borrow money with interest as low as 4% in situations that require cashing out your portfolio. This feature saves the user the stress of calculating and reporting capital gains recovered and tax deductibles.

Regulated By Verified U.S. Financial Organizations

There is always a battle between crypto exchange sites and government bodies, i.e., SEC, etc., on various matters around approval, verification, and other regulatory policies. However, BlockFi is regulated by the New York State Department of Financial Services. 

Free Trading and Transaction Fees

Unlike other platforms, BlockFi does not charge exorbitant fees on trading, allowing users to earn higher returns without being ripped off in the name charges and hidden fees.

Digital Wallet Services

For new crypto users who do not own external hot or cold wallets, BlockFi provides each user a unique, secured, and personalized digital wallet to safely store their cryptocurrency tokens.

Easy Trading

Users can easily set up recurring trades that automatically buy and sells the desired token immediately with deposited funds in the interest account. It is a perfect feature for individuals with little to no time for active trading. This way, they can set up trades that can recur weekly, monthly, or even yearly, allowing them to make gains effortlessly.

Crypto Reward Credit Card

BlockFI is the original crypto reward credit card issuer. Now, you don’t have to buy Bitcoin to become a crypto investor. With the VISA credit card, you earn 1.5% back in Bitcoin with no annual fee when you make purchases with the card. Just make sure you pay it off every month to avoid the interest-bearing fees.

Cons of BlockFi 

Limited Services Based on Geographical Location

BlockFi’s vision and novel approach to the cryptocurrency ecosystem challenges have been subjected to strict review by several financial bodies. Hence, the limitation of their services and offerings in some states or countries.

Poor User Interface and Website Interaction Design

For a website with millions of active users, BlockFi UI navigation is difficult. Users find it difficult to perform certain tasks, e.g., account closure or setup, etc. On Google Play and iOS app stores, users gave the platform’s outlook a three-star rating.

Low Number of Tradeable Cryptocurrencies

Unlike other platforms with thousands of tradeable coins, BlockFi only provides trading services for only 17 crypto assets which are:

  • Bitcoin (BTC),
  • LINK (LINK),
  • Ethereum (ETH),
  • Litecoin (LTC),
  • Paxos Standard (PAX),
  • PAX Gold (PAXG),
  • USD Coin (USDC),
  • Gemini dollar (GUSD),
  • Tether (USDT),
  • Binance USD (BUSD),

However, the crypto-assets can be reduced based on the user’s location, and the low number of tradeable tokens has deterred people from using BlockFi.

Lack of Resources Concerning the Use of the BlockFi Platform.

BlockFi has a complex website interface that lacks detailed resources, i.e., videos, podcasts, etc. It needs interpretable technical documentation, audios, and videos, showing the platform features, operations, and user interaction.

Limited Free Monthly Withdrawals

BlockFi only allows its users to withdraw over a month for free. Surpassing this rule demands the user to pay a withdrawal fee of the total amount to be withdrawn.

No Custodial Account

Cryptocurrency is a long-term investment choice to store fiat currencies from inflation. With the volatility of the crypto market, there should be options for saving long term. However, BlockFi does allow custodial accounts for kids below the age of 18, making it difficult for parents to save up for their kid’s future.

Is BlockFi Safe?

BlockFi is one of the few cryptocurrency exchanges platforms in the United States. Although the financial entity is insured, government organizations like FDIC or SPIC do not back account holders. Nonetheless, BlockFi has employed several security measures to prevent cases of fraud or theft to ensure your finances are secure. These include the following: 

  • BlockFi keeps its financial reserves with highly trusted third-party cryptocurrency companies like Gemini and Coinbase.
  • A hidden 50% collateral carefully backs every loan to prevent loss and bankruptcy.
  • BlockFi diversified the users’ finances by buying Security and Exchange companies’ assets, also called investments. It allows BlockiFi to stabilize its resources and safeguards the users.
  • A list of reputable investors and investment companies like Coinbase Ventures back BlockFi and can render financial resources in a time of trouble back BlockFi.
  • Users can take extra security measures by creating a feature that enables them to ban or restrict shady addresses that may potentially harm their BlockFi account.

Is BlockFi Legitimate?

BlockFi is a good and legitimate exchange platform that is user-friendly in terms of charges. However, they do not possess a wide range of tokens to purchase, nor is their website or application suitable for trading in terms of user experience. Concerning other platforms, reviews, and reactions from other users, BlockFi is being awarded 3.5 stars out of 5.

Alternatives to BlockFI

As cryptocurrency lending is building in popularity, several alternative platforms have come to the market. Check out this list of alternatives to consider:

1. Nexo. The platform is simple and easy to use, with crypto savings, crypto-backed loans, and fiat-based loans with interest. Nexo allows you to borrow cash, cryptocurrencies, and stablecoins. 

2. Celsius. Similar to Nexo and BlockFi, Celsius offers crypto borrowing. The platform is easy to use, and rewards are paid weekly.

3. Hodlnaut. A valid alternative to BlockFi, Hodlnaut offers consumers crypto loans or saving options. In addition, the platform offers interest rates similar to BlockFi and no minimum deposits or lock-in periods.

The Bottom Line

BlockFi is more than a cryptocurrency exchange platform. They offer a wide range of add-on services that allows users to enjoy more. For example, it includes an automatic trading feature that allows users to set in a predetermined trading strategy without 24/7 monitoring, a high APY for every crypto deposit, and the ability to receive Bitcoin loans with little to no stress.

However, poor website and application interface, little to no documentation on the web site’s operation, and limited withdrawals are some of the drawbacks of BlockFi. Account holders will also need to pay close attention to the terms of service to prevent problems including extra fees from low loan-to-value ratios and more. 

If you don’t want to invest in a cryptocurrency directly, you can get the BlockFI credit card. Just remember to pay it off every month or it’s costing you more than its worth in interest fees. 

Overall, it is a good platform for intermediate to expert crypto traders, and it is also cost-efficient.

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Theresa is a personal finance blogger. She writes content for busy professional women to take control of their money and investments. She enjoys reading, traveling, cooking, and writing. Her work has been featured on GoBanking Rates, Your Money Geek, Savoteur, the Corporate Quitter, Thirty Eight Investing, and more.