Asset Growth – General State of the Business
Equity markets typically experience a summer slowdown. In stark contrast, July was a colorful month for crypto. While the price of Bitcoin has remained relatively unchanged on a month-over-month basis, much has happened in the 4 weeks spanning July. Notably, the Treasury Secretary issued a statement on the structure of crypto, Fidelity applied for a Trust License in NYC to become a custodian and Grayscale Bitcoin Trust hit an all time high of $2.8B AUM, signaling demand from retirement accounts, institutions, and family offices to invest in crypto.
At BlockFi, we continued to experience platform growth, notably our USD loans gained traction with international borrowers. The ability to borrow USD-denominated debt at interest rates as low as 4.5% is impactful to international borrowers with lack of low-cost financing options. In particular, international customers have been leveraging the ability to pay back their loan in stablecoins or with the collateral used to secure their loan with BlockFi.
Why Rates Are Changing
As we continue to scale out the BlockFi Interest Account (BIA), we are continuing to make updates to the amount of interest paid out to customers. Our ability to pay interest is tied to borrowing demand in the institutional crypto lending market. BlockFi actively lends crypto to institutions, which pay varying rates depending on the volume of crypto available and the volatility of crypto prices. In an effort to be able to pay interest to the largest amount of clients possible, we are updating our top tier pricing for Bitcoin.
BlockFi will be making the following rate adjustments to the BlockFi Interest Account as of August 1, 2019:
- BTC balances above 10 BTC will earn 2.15% APY
- The rate for GUSD deposits will increase to from 6.2% to 8.25% with no maximum
BlockFi on Security and the Withdrawal Process
This month we published an article that speaks to BlockFi’s position on security and some enhanced security protocols BlockFi is currently exploring. BlockFi has processed close to $120M in withdrawals of Bitcoin and Ether from our Gemini custodial account since launching the BlockFi Interest Account in March 2019. Over the last several months, we have confirmed that processing withdrawals within 24-48 hours of a request offers clients optimal mix of speed and security.
Additionally, we shared more details on our loan payoff process, highlighting the flexibility of the product. Clients can pay off with USD, stablecoin or the crypto posted as collateral for their loan.
BlockFi Featured on The Scoop
BlockFi founder, Zac Prince was featured on The Block’s podcast (The Scoop). Zac discussed BlockFi’s growth over the past year and the company’s current and future product development plans. BlockFi’s ambitious plans are broken down into three main phases:
- Phase 1- provide products for people who already own Bitcoin or another crypto asset that BlockFi supports (crypto loans and the BlockFi Interest Account)
- Phase 2- bring further functionality to current products and develop new product offerings designed for active crypto investors and for those who do not currently own cryptocurrency alike
- Phase 3- focus on international expansion
This week, we will be rolling out a new series of updates to our product Dashboard, focusing on improvements to our user Profile and our Interest Account.
The Profile section now has additional user account functionality: clients can store and edit contact information which, in turn, seamlessly integrates into our identity verification and product applications.
The Interest Account landing page has been streamlined to include Deposit, Withdrawal, and Transaction-view functionality. Users can initiate Transactions with a single click directly from the Interest Account overview page.
BlockFi Partnership Highlights
All existing BlockFi clients are eligible for:
- $50 off Casa Node with included Gold Subscription
- $200 off first year of Casa Platinum with 3-of-5 Key Shield multisig
- $500 off first year of Casa Diamond with 3-of-5 Key Shield and full team support
Additionally, Casa Gold, Platinum and Diamond members are eligible for:
- Reduced rates on BlockFi BTC-backed loans
- Plus an additional 10% interest each month on Bitcoin interest accounts. At BlockFi’s current rate of 6% annual interest, this would mean Casa clients are able to earn 6.6% annual interest.
* Note: the reduced rates and additional interest mentioned above only apply to new BlockFi account holders. A complete list of requirements can be found here.
BlockFi has joined Messari’s Reward Transparency initiative, which provides discounted professional services to registry clients. The registry is an open source database that focuses on bringing transparency to crypto project stakeholders. BlockFi offers registry projects (current and new registry members) a 10% bonus on interest payments, and a 0.25% reduction in borrowing rates.
– The BlockFi Team