Currently, BlockFi is winning more attention in the cryptocurrency market, and it is not the first lending startup firm in the market. Meanwhile it is also facing some heat from community members.
BlockFi is based in New York and is a verified bank moneylender that provides loans in USD to crypto asset owners who secure the loan along with their crypto resources. The products of crypto asset owner provide more liquidity to the blockchain resource segment and also resolve issues of the people and institutions maintaining blockchain resources.
BlockFi was established in 2017 and started making fiat loans in January 2018, along with crypto collateral. In recent time, the company had gained a lot of attention when the company introduced an interest-bearing deposit account. The BlockFi product invites investor offering returns of up to 6.2 percent per year for maintaining their bitcoin or any other digital currency. BlockFi holds Ether and Bitcoin of users with a registered executive and issues loans to their specific bank’s accounts in USD. As of now, the product of BlockFi is operating in the beta version which provides loans to retail financial experts and organizations of the US.
The main objective of the BlockFi is to offer liquidity, productiveness and transparency to the digital markets.
The product as of now seems to be getting an attraction. The founder and CEO of BlockFi, Zac Prince said that more than 35 million dollars of crypto have been deposited by the users and 80 percent of the deposit is in bitcoin, into their interest-bearing accounts ever since when the beta testing of the product was started in January. Out the total $35 million, almost $25 million was collected after March 5 launch.
Caitlin Long, Wall Street veteran said that depositing crypto with BlockFi will allow people to open themselves to risk. BlockFi may open itself to legal problems in some parts of the US as well.
Few others said that the deposits are not secured because they are not in the bank, the advantage is limited to 6.2 percent, and if the BlockFi fails, then your setback is 100 percent.
Although the controversies over the products have signalled that there is clear market interest in the product.
Objectives of BlockFi
- The important feature of the product is the ability to use one’s crypto portfolio as security for loans. The loan interests are moderate along with flexible repayments plans.
- BlockFi is the lending system that is designed with high-security standards which are important when controlling cryptocurrencies. The team that is handling the system is highly professional who have involved themselves a lot in digital funds.
BlockFi as of now is providing two types of products to retail customers namely, cryptocurrency based loans and interest accounts funded by crypto. With the help of the loans, the customers can borrow US dollar for a period of one year at an interest of 4.5 percent by depositing Bitcoin, Litecoin or Ether as a guarantee. The customer can only borrow up to 50 percent on the crypto’s worth, promised at that time.