Cryptocurrency investors can send their digital currency from any exchange or wallet to BlockFi and earn interest on their holdings. There are a number of exchanges in the crypto ecosystem. When looking to purchase crypto, you’ll need to find an exchange you trust. Coinbase is a popular exchange in the U.S. and one of the best for on-boarding consumers into the crypto ecosystem. Clients can create an account in minutes and start buying cryptocurrency. Once you’ve purchased cryptocurrency, you can send it directly to BlockFi to begin earning interest.
To use the BlockFi Interest Account (BIA) you will need to send your cryptocurrency directly to your unique BlockFi wallet address, stored at Gemini. In this article, we’ll walk you through the Coinbase account creation and purchasing process and how to transfer your funds to BlockFi.
What is Coinbase?
If you want to get started with holding and trading digital currencies, you’ll need to use an exchange. There are many places for you to purchase cryptocurrencies. Coinbase is one of the most well known and trusted exchanges on the market. Their platform allows users to start trading Bitcoin, Ether and 9 other digital currencies almost instantly. It was founded in 2012 and is backed by companies like Y Combinator, USAA Bank and the NYSE, making it one of the most reputable exchanges in the world. Coinbase’s easy user interface makes it one of the easiest places to fund your account and trade cryptocurrency.
Signing Up for Coinbase
Getting started on Coinbase is as easy as registering with your email and confirming your account. Coinbase requires all U.S. users to verify their personal information through Know Your Customer (KYC) and anti-money laundering (AML) process. The verification process involves uploading a photo of your ID (using an image file or your computer’s webcam) and inputting your SSN. This step
must be completed before users can make purchases larger than $1,000, use a debit card for crypto purchases, or send and receive crypto to/from your account.
You can complete the KYC process by navigating to Settings > Account levels and click the “Verify photo ID” or the “Enable send and receive” button.
Choosing Your Funding Method
After your identity has been confirmed, you’ll receive a notification from Coinbase that you can now begin purchasing cryptocurrency on their exchange. For instant trading, The best option is to use your debit card. You can purchase up to $5,000 worth of crypto at a time and your crypto will instantly be available for transfer to other platforms like BlockFi.
If you’re looking to purchase larger volumes of BTC or ETH (up to $25,000 per purchase) you can choose to connect your bank account for direct deposit. One downside to this method is that purchases will take 4-5 days before they can be transferred off the Coinbase platform.
A third option is to create a wire transfer from your bank into your Coinbase account. This is especially helpful if you’re looking to buy crypto in amounts of $5,000 to $250,000. Note that this will also incur 1-3 days in processing time and fees from the institution you are transferring from. You should check with your bank to understand the process and fees associated with wire transfers.
What kinds of cryptocurrency can you buy on Coinbase?
Currently, Coinbase offers 11 coins you can purchase — Bitcoin, Ethereum, XRP, Litecoin, Bitcoin Cash, Stellar Lumens, Ethereum Classic, Zcash, Basic Attention Token, USD Coin and Ox. You can visit the Coinbase website for real time pricing information on all listed coins.
How to Buy Crypto on Coinbase
Once your fiat funds have been successfully added to your Coinbase account, you can click the Buy/Sell tab on the Coinbase dashboard to begin purchasing crypto. Coinbase supports the buying of a number of cryptocurrencies, but please note that BlockFi’s BIA product only supports Bitcoin, Ether & GUSD at this time . Note that each payment method will incur a conversion fee varying by account type. U.S. bank accounts fees are 1.49%, Coinbase USD wallet fees are 1.49% and Credit/Debit card transaction fees are 3.99%. You can read more about Coinbase fees for your specific region here.
Within the Coinbase Buy/Sell dashboard, you can trade crypto in denominations of your local currency or Coinbase supported cryptocurrency. When you input the amount of crypto you’d like to buy, Coinbase will display that value converted into your local currency to help you visually understand the cost of the transaction. This will appear in the field opposite your input. The current conversion price for that currency will be displayed on the top right of your screen. If you input the amount you’d like to buy in fiat currency, the interface will display the amount of the selected cryptocurrency you can buy for that fiat value in the field opposite.
Additionally, if you know you’d like to make recurring purchases over time, you can set Coinbase to complete a purchase at a set amount to repeat daily, weekly, bi-weekly or monthly. This is a great way to accumulate more crypto over-time using a cost-basis strategy.
Registering for a BlockFi Interest Account
Once you’ve purchased your crypto on Coinbase, it’s time to create your account on BlockFi.com. Simply input your email and password to register. You will then be taken to your BlockFi dashboard. Click the “Interest Account” tab, which will show you an overview your BIA balance, transaction history, and more.
Before you can transfer crypto into a BlockFi Interest Account, you must complete BlockFi’s KYC and AML process. This will require you inputting your basic identity information, name matching against a list of known parties, and risk with regard to previous financial exchanges. BlockFi does not do hard or soft pulls of credit scores, so completing this process will not affect your credit score. You can read more about the KYC/AML process in our resource center.
Finding Your BlockFi Wallet Address
After your account has been approved, return to the BlockFi dashboard’s Interest Account tab. You can find the unique wallet address by clicking the deposit button on your preferred cryptocurrency. A pop-up will appear and display your unique BlockFi wallet address and QR code. The address will contain a mix of letters and numbers, and will be used to send crypto from any exchange or wallet to your BlockFi account through the blockchain. Crypto stored in the BIA is custodied by Gemini. The assets stored with Gemini’s custody service is insured by Aon. 95% of assets are stored in cold storage and 5% in hot wallets. You can read more about BlockFi client assets are stored in our resource center and on the Gemini website.
Sending Crypto to BlockFi from a Coinbase Account
To send crypto from your Coinbase account to your BlockFi account, sign in to Coinbase and navigate to the “accounts” tab on the navigation bar. Find your Bitcoin (BTC) or Ether (ETH) wallet. Initiate the transfer process by clicking the “send” button. You will be prompted for the destination address. Here is where you will use the BlockFi wallet address, found in your BIA dashboard. You can copy and paste the address from your BIA account in this field.
Next, input the amount of crypto to be sent, calculated in either your local currency or crypto of choice. Please note that Coinbase charges a network fee ~1% of the transaction to transfer out crypto. Review your inputs and confirm the transfer amount and destination wallet address are correct. Once you are satisfied, complete the transfer.
Once the transaction is sent, Coinbase will begin processing the transfer. This can take anywhere from a few minutes to an hour. After Coinbase processes the transfer, it will hit the blockchain and be displayed in your BlockFi dashboard.
That’s it! You account will start earning interest the day after your crypto is funded to your account. BIA clients also receive a statement at the beginning of every month, which includes account balances, interest earned in the account, and more. Additionally, at the beginning of tax season, BIA clients will receive the relevant documents for reporting your earned interest on your taxes. Learn more about how to report BIA earnings on your taxes.
BIA clients can initiate withdraw at any time by clicking the “withdraw” button in your dashboard and following the steps within.