BlockFi Review 2022 | NextAdvisor with TIME


We want to help you make more informed decisions. Certain clearly marked links on this page may take you to a partner website and may earn us a referral fee. For more information, see How we make money.

BlockFi could be a good option if you are looking to trade your crypto without complicated fees and are interested in a crypto rewards credit card.

BlockFi is based in Jersey City, New Jersey, and was founded in 2017. BlockFi has gained attention from customers and the Securities and Exchange Commission for its high-yield crypto accounts. It has also had complications with its loan product, though that may not be a problem for most everyday investors who just buy and hold for long-term growth in value.

The company recently settled with the SEC after it was accused of failing to register its retail crypto lending product, among other issues. BlockFi has agreed to pay $50 million in penalties to the SEC and another $50 million to 32 states, the SEC said in February. The settlement also required BlockFi to stop offering BlockFi interest accounts to US-based users.

We reached out to BlockFi for comment on the SEC case, and the company said in a statement that it is working to align its product with regulations and register with the SEC under the appropriate statutes, after which it intends to re-launch its product. crypto interest. win product to US customers

“From the day we started BlockFi, we always knew that strong engagement with regulators would be critical to the adoption of cryptocurrency-powered financial services,” BlockFi CEO and founder Zac Prince said in the provided statement. “We intend BlockFi Yield to be a new SEC-registered interest-earning crypto security that will allow customers to earn interest on their crypto assets.”

Despite outstanding issues with its crypto lending and interest accounts, BlockFi offers a relatively simple crypto trading experience, especially with regards to how it incorporates its trading fees into overall crypto prices. Combine that with your BlockFi Rewards Visa Signature Credit Cardand could be an interesting option for cryptocurrency investors.

Pros and Cons of BlockFi

advantages

  • No business fees

  • Instant Trade Execution

  • rewards credit card

BlockFi at a glance

  • Less than 20 cryptocurrencies available
  • No trading fees, but there are withdrawal fees
  • Ability to borrow using crypto as collateral
  • Keep the coins in the BlockFi escrow wallet or move them to your own wallet
  • $20 minimum trade amount
  • Apply for a rewards credit card

Cryptocurrencies available on BlockFi

BlockFi does not offer many cryptocurrencies, although it does have some of the more popular ones, including:

  • Bitcoin (BTC)
  • Ethereum (ETH)
  • Litecoin (LTC)
  • Bitcoin Cash (BCH)
  • Pax Gold (PAXG)
  • Uniswap (UNI)
  • DAI (DAI)
  • Chain link (LINK)
  • Basic Attention Token (BAT)
  • Algorand (SOMETHING)
  • US Dollar Currency (USDC)
  • Tether (USDT)

BlockFi Fees

BlockFi does not charge trading fees. On the other hand the propagation costor the difference between what it costs and what you pay for it, is included in the listed price, and you may find crypto for less on other exchanges. The prices you can trade at may be different than the market price you see listed, so make a note of the actual price you are trading at, rather than the list price. This will help with your record keeping and help you stay on top of your transactions.

withdrawal fees

There is no charge for a withdrawal to a bank account via ACH transfer, although you will see a $20 charge for national bank transfers.

If you decide withdraw crypto to an external wallet, you will pay a withdrawal fee based on the cryptocurrency involved, and may be subject to a withdrawal minimum and limit. While this won’t affect many everyday investors, for example, you can only withdraw up to 100 BTC in a seven-day period.

Some assets allow one free withdrawal per calendar month on BlockFi, including:

Other assets, such as ETH, LINK, PAXG, UNI, and BAT do not come with any free withdrawal options, so you will always pay the fee to withdraw money.

Withdrawal fees are charged in the associated cryptocurrency. So if you withdraw ETH, you will pay a fee of 0.015 ETH. However, fees and limits may change in the future, so please check the terms before moving BlockFi assets to your own wallet.

BlockFi Security

BlockFi operates a custodial wallet. When you send US dollars to BlockFi, it is converted to the same amount represented by a pegged US dollar stable coin. Your stablecoin is actually what you are exchanging when you buy other cryptocurrencies with your BlockFi account.

Your assets on the platform are actually held by a regulated custodianincluding Gemini, which is a partner of BlockFi. BlockFi touts its partnerships with Gemini as an example of how its coordination with other industry-leading crypto companies gives users greater protection and security. BlockFi also offers security measures, such as allowing you to set your account to withdraw only to approved wallet addresses. This reduces the chances that someone who hacks into your account can withdraw money from your wallet to an address that isn’t on the whitelist. Additionally, BlockFi offers two-factor authentication.

Your money is not held in cash deposit accounts; it’s exchanged for stablecoins, so it’s not actually held as cash. Therefore, you will not have access to Federal Deposit Insurance Corporation (FDIC) or Insurance from the Securities Investor Protection Corporation (SIPC). The FDIC is a government agency that insures deposits and supervises financial institutions for consumer protection, with the goal of maintaining public confidence and the stability of the American financial system. SIPC is a nonprofit organization that aims to restore investors’ securities and cash when a brokerage firm fails.

additional details

rewards credit card

BlockFi users can request the BlockFi Rewards Visa Signature Credit Card, which offers 1.5% cash back in cryptocurrencies. You can also get cash back offers at Bitcoin trade winds. Crypto rewards are deposited into your BlockFi account on a monthly basis.

The card has a variable APR of 14.99%-24.99%, and you will see no annual or foreign transaction fees. Balance transfers are not permitted and the card is not available to New York State residents. For people who are interested in a more limited crypto investment strategy using credit card reward points, the BlockFi card could be an interesting product; Just keep in mind that your reward rate is similar to other cards that reward you with cash.

loans

Although we would not recommend most everyday investors to mess with crypto loans, they are available on BlockFi. Can get a loan for up to 50% of the value of your BTC, ETH or LTC if you have crypto that you can use as collateral. Rates start at 4.5% and there are no prepayment penalties, but the loan does carry some risk. If the value of your crypto drops too much, you may need to pay a portion or add more crypto to the account to maintain the requirements.

BlockFi interest account

While not currently available to US-based users, the interest-earning account is designed for you to earn interest on the cryptocurrencies held in the account. BlockFi is in the process of registering a similar product, called BlockFi Performance, with the SEC. If the SEC approves this new product, a version of it would be available to US customers.

Who is BlockFi best for?

BlockFi is best if you are a beginner to intermediate crypto enthusiast who likes to manage different aspects of your finances using cryptocurrencies. It works if you want to quickly and easily buy, sell and trade limited coins from a custodial wallet, while accessing other services like credit card rewards.

If you are a more advanced user, you may be missing BlockFi due to the limited coins available to trade compared to other exchanges like base of coins, eToroand GeminiThey offer many more options.

How to open an account with BlockFi

creating a Blockfi account it’s pretty simple. You must provide information about your identity, including name and address, and provide photo identification. You will also need to connect a funding source to transfer money to the account. Once your account is open, you can deposit funds and start trading.

BlockFi compared to other exchanges

BlockFi base of coins eToro
coins Less than 20 cryptocurrencies More than 150 cryptocurrencies More than 50 cryptocurrencies
Rate No additional trading fees as spreads are priced at 0.50% differential; trading fee between 1.49% and 3.99% (or flat fee from $0.99 to $2.99) Spread from 0.75% to 4.9% (varies by crypto)
wallet storage Keep it in the BlockFi wallet or transfer it to your own wallet Keep coins on the exchange, in Coinbase Wallet or transfer them to your own wallet Save coins to eToro account, eToro wallet or transfer to your own wallet
Minimum Trade $20 $2 $25

Frequent questions

Can BlockFi be trusted?

BlockFi offers you a way to buy, sell, and trade cryptocurrencies, but the assets are not protected by the FDIC or SIPC. Assets on BlockFi are held in trusted custodians, even with Gemini. BlockFi offers some security measures, such as allowing you to designate specific wallet addresses for withdrawal and two-factor authentication. There was a BlockFi hack using a SIM swap, but BlockFi says no funds were lost and the hacker was unsuccessful in attempts to access customer assets.

Can you lose money on BlockFi?

As with any investment, if you buy crypto on BlockFi and the price drops, you could lose money. Also, because your BlockFi account is not protected by the FDIC or SIPC, you could lose money if the company goes out of business.

Is BlockFi a credit card?

BlockFi is a platform that offers consumers the ability to buy, sell, and trade cryptocurrencies. It also offers a digital wallet and issues a Visa credit card that earns cryptocurrency rewards.