Is it possible to earn passive income with cryptocurrency? Yes! Not only can you earn passive income but it also compounds and is paid to you in cryptocurrency.
This has become my favorite way to earn passive income with crypto and while also growing my cryptocurrency portfolio at the same time. Several months ago I began researching this company because of an ad I saw on my Brave Browser. I was a bit skeptical but definitely interested in earning interest on my crypto. After I watched a bunch of videos and researched everything I could find about Blockfi I decided to open an account and fund it with a few hundred dollars worth of Bitcoin. Now I find myself talking to people about this all the time. I love that we now have a consistent and conservative approach to increase our Bitcoin and Ethereum holdings.
Keep reading to hear more about my experience and also learn more for yourself about how you can benefit from this service.
What Is Blockfi?
Blockfi is a crypto wealth management company that is built on a blockchain and was launched in 2017. They provide the ability for individuals to take a loan using cryptocurrency as collateral. In addition, the company offers interest bearing accounts. Currently you can earn up to 8.6% interest for funds held in a Blockfi account.
How Does Blockfi Work?
Blockfi is similar to traditional banking in the sense that they are in the business of loaning money. In order to make loans they need to have funds available to do so. By opening an account, and depositing your cryptocurrency, you are helping provide liquidity for the company to make loans.
Which Cryptocurrencies Are Supported?
Bitcoin , Ethereum, and GUSD.
How Much Interest Is Paid?
At the time of this writing...
Bitcoin earns 6.1% Interest
Ethereum earns 4.2% Interest
GUSD earns 8.6% interest.
When Is Interest Paid?
Interest is paid to your account at the beginning of each month and compounds monthly.
Are There Minimum Or Maximum Deposits?
There are no minimum or maximum deposits, however interest rates do vary based on deposit size. Actually, the company wants to be a service for individuals and therefor offers higher interest rates if your account deposits are below a certain threshold.
Are There Withdrawal Fees?
You are allowed 1 free withdrawal per month. Beyond that there are small withdrawal fees.
How Long Has The Company Been In Business?
Inception was in 2017. The leadership team has many years of experience in traditional financing and blockchain development.
How Long Do I have To hold money in the account?
There is no minimum length of time required for you to hold funds in your account.
Are Withdrawals Instant?
Withdrawals generally happen within 2 business days.
How Does It Compare To Traditional Banking?
The operation of this business happens in a similar fashion as a traditional bank. However, because cryptocurrency is not recognized as legal currency in the US it is not guaranteed through FDIC or SIPC. Instead, BlockFi is the only independent lender with institutional backing from investors that include Galaxy Digital, Susquehanna, Akuna Capital, Fidelity, Recruit Strategic Partners, ConsenSys Ventures, SoFi, Coinbase Ventures, CMT Digital and Morgan Creek Digital.
Advantages / Disadvantages
How Do Taxes Work?
Us customers are provided a 1099 form shortly after the new year. It is then the customers responsibility to report taxes appropriately.
How Do I Take A Loan Through Blockfi?
- Create an account at https://app.blockfi.com/signup
- Click on the Loan tab
- Click Apply and fill out the application.
- You will receive a decision from our team in less than 24 hours
- Review your loan offer and sign the loan agreement
- Transfer collateral to BlockFi’s secure storage wallet
- Receive your loan the same day in USD via a wire to your bank account or stablecoin to your wallet address of choice.
- Make interest only payments monthly using USD, BTC, ETH or LTC
- Pay off the principal in one payment at the end of the term or refinance at current rates
How Do I Open An Account Or Get More Information?
Overall, I have had a great experience with Blockfi. Twice I have contacted their customer support with general questions and they have been very helpful. In addition, the interest promised has been paid on time and at the beginning of the month with no problems. My only concern would be that it is a newer company, but it seems to be well funded and supported by many large financial institutions. In addition, the leadership team is solid and has plenty of experience in the financial world. With that being said, I feel like this has been a great way to make additional passive income for my family.