Home Cryptocurrency Using BlockFi as a Savings Account – Should You?

Using BlockFi as a Savings Account – Should You?

by edward

Using BlockFi as a savings account would be a smart move. Since cryptocurrency is still in its early stages the interest rates for simply holding onto certain cryptos is incredible. The growth of cryptocurrency does not come as a surprise, owing to the many benefits received. Today, users have access to many of these digital currencies and respective endless opportunities, including the ability to save money via BlockFi. Should you care about cryptos? What potential does BlockFi have for its users? Keep reading to learn more.

Why Get Involved In Cryptocurrency

There are many reasons why you should care about cryptocurrencies. Some of the benefits of participating in digital currencies include:

  1. Faster Transactions

The traditional business dealings often incorporate agents, legal entities like banks, and brokers, all of whom introduce unnecessary complications to transactions. Their involvement means that you have to pay them a commission and perform lots of paperwork.

However, in cryptocurrency, most transactions are executed on a one-on-one basis, effectively getting rid of the proverbial middle man. That ensures transactions are completed much faster and without complications.

  1. Ascertains Your Privacy

Before you can conduct a transaction through any financial institution such as the bank, you must provide all your personally identifying documentation. The specific personal information that these financial institutions require varies, but typically includes (1) government-issued ID to prove identity, (2) taxpayer identification card, (3) home address, and so on. Anyone who gains access to these details can use them to track you down.

On the other hand, participating in cryptocurrency offers a high level of privacy and anonymity. Users do not have to reveal their personally identifying information because such details are not relevant to executing a cryptocurrency transaction. All that you need is your crypto wallet address to send and receive payments.

  1. Secure transactions

Many online transactions have been marred with allegations of fraud and reversals. When using the traditional currency to pay for a purchase, the individual could dispute with the bank or financial institution, reversing the genuine money sent to your account. Additionally, online bank accounts have been the subject of cyberattacks in recent times.

The same cannot be said of cryptocurrencies. Once a crypto transaction has been executed and authorized, no one can reverse it. Such transactions are based on trust. The notion in the blockchain network is that once you send money, you do so because you received a service in return. Additionally, cryptos have not registered cases of fraud, as is the case with fiat currency.

  1. Ability to trade cryptos any day, any time

Cryptocurrency users can trade in the market 24 hours a day, all week long, because the market is open at any time. These transactions are not centralized or governed by the government. They can go on whether or not people are asleep. The occasional brief downtime’s during infrastructural updates are not much of a bother compared to fiat currencies that open specific days of the week and timelines.

Why Use BlockFi

We have seen, from a general perspective, the benefits of participating in cryptocurrencies. BlockFi is one of the most versatile financial services providers in crypto that allows you to earn interest, trade crypto, and borrow cash.

Consider using BlockFi for the following reasons:

  1. Value for clients

Based on BlockFi’s actions, one can see that both customers and partners are highly valued as clients. The platform’s support service is admirable and ensures that user issues are tackled in record time.

  1. Improved liquidity

Generally speaking, the cryptocurrency market is illiquid since transactions are dispersed across multiple exchanges. That means small trades may have a significant impact on the market prices. However, trading on BlockFi provides improved liquidity that ensures faster execution of your trades at a lower cost.

  1. Quick account creation

BlockFi does not subject you to complicated steps when you want to create your account. New users get started with the platform within a short time – an average of 5 minutes. That’s because you do not need to set up and manage an exchange account.

How To Use BlockFi as a Savings Account

One crucial service that you can get at BlockFi involves savings. The platform functions as a non-traditional savings account.

To leverage this service, you should deposit cryptocurrency that you currently hold from which you can earn a designated interest rate – 8.6% Annual Percentage Yield (APY). You can confidently save money via BlockFi and take advantage of the higher returns than traditional financial institutions.

The cryptocurrencies that you can currently use as savings options in BlockFi include:

  • Bitcoin
  • Gemini
  • USD Coin
  • Pax Gold
  • Ethereum
  • Tether
  • Litecoin

Apart from the mentioned, BlockFi also supports self-directed IRAs.

Interest Rates for Cryptocurrency

When clients make deposits in their accounts, they become eligible for Annual Percentage Yield at a rate determined by the currency in question. The compounding interest gets paid at the beginning of each month. It ranges from a high of 8.5% to a low of 1.4%. Kindly follow this link to learn more about the Interest Structure.

How Often Is Interest Paid?

BlockFi pays interest at the beginning of each month, and this is calculated using the compounded interest approach. The approach ascertains clients of a high annual yield.

Borrowing Money On BlockFi

BlockFi empowers its users by allowing them to use their cryptocurrency as collateral to borrow money. The application process is easy and fast, and the funds get deposited in the borrower’s bank account.

The current minimum loan that you can borrow stands at $5,000 and a maximum of $10,000,000. Borrowers who want more than this are advised to speak with the team at BlockFi regarding their desired amount.

Benefits To Borrowing Money

Should you consider borrowing money from BlockFi? Definitely yes. Here are reasons why:

  1. Decent loan amount awarded

The platform allows you to borrow sufficient funds using your cryptocurrency as collateral. The maximum $10,000,000 loan is enough for most people. But if you feel that you need more, you can always contact the team to discuss the same.

  1. Transparent collateral calculation

BlockFi shares clear steps on how it calculates the collateral in question while awarding you the designated loan.

  1. Collateral is returned

Borrowers receive back their collateral after paying off their loan. Borrowing money empowers you to explore the benefits of fiat currency without missing the upsides offered by cryptocurrency. As much as you have borrowed money, you still own the crypto appreciation.

  1. No need to report capital gains

When you borrow money against your crypto assets instead of selling, you get to avoid the hassles of reporting capital gains. That can significantly help save you tax money. Remember, there is the possibility that the interest could be tax-deductible, further lowering your tax bill.

Final Thoughts

Cryptocurrencies undoubtedly provide more benefits than we ever imagined they could. The emergence of crypto financial services platforms like BlockFi helps fuel the growth of cryptos. They introduce various services like using crypto assets to save and borrow money. As seen above, you stand to gain more when you borrow money against your crypto assets than traditional loans.

BlockFi Up To $250 Free


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