Rajarshi Mitra
Independent Analyst
- Traders have reportedly moved $35 million in BTC and ETH to interest-bearing crypto accounts at BlockFi.
- BlockFi is introducing a 25 BTC and 500 ETH cap next month to discourage crypto whales.
As per Bloomberg, Bitcoin and Ethereum investors are moving their crypto to interest-bearing accounts by the millions. In the first week of March, Block Fi, a New York-based fintech startup providing interest-bearing accounts, was launched. Traders have reportedly moved $35 million in BTC and ETH to interest-bearing crypto accounts at BlockFi, in just three weeks.
Zac Prince, chief executive of BlockFi, said in an interview:
“We expect the interest rate in the account to be higher in times when prices are falling, and lower when prices are rising because demand to borrow Bitcoin is partially driven by market sentiment. We are bullish on the cryptocurrency market and on Bitcoin long term.”
In a blog post, BlockFi stated that its accounts are designed for retail investors and not crypto whales. In fact, they are introducing a 25 BTC and 500 ETH cap next month to discourage whales.
“…starting April 1st, only BlockFi Interest Account (BIA) balances of up to and including 25 BTC or 500 ETH (equivalent to roughly $100,000 and $70,000 respectively) will earn the 6.2% APY interest rate.
All balances over that limit will earn a tiered rate of 2% interest. To clarify, if you had 25.5 BTC in your BIA account, the first 25 BTC would earn interest at 6.2% and the remaining 0.5 will earn interest at 2%.”
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