Cryptocurrency lending startup BlockFi is almost halving the interest rates it offers on ether (ETH) deposits, while bitcoin (BTC) rates will increase slightly.
From June 1, customers with 25–100 ETH balances in a BlockFi Interest Account (BIA) will see the interest rate drop from the current 6.2 percent annual percentage yield (APY) to 3.25 percent, the startup Tuesday. Those holding over 100 ETH balances will earn just 0.2 percent APY.
Some BTC balances, on the other hand, will see a slight interest rate increase – up to 2.15 percent from the current 2 percent – for deposits of over 25 BTC. Those holding 0.5–25 BTC will continue to earn 6.2 percent APY, BlockFi said.
The firm cited the reason for the increased interest rate on larger BTC deposits as being because borrowing and lending markets for the world’s largest cryptocurrency by market capitalization “have developed into a vibrant and growing field.”
On the contrary, the ether lending market has become “stagnant” over the last couple quarters, BlockFi said. The firm’s state that it can change interest rates at its discretion.
The company the BIA in March, offering an annual interest rate of 6 percent, paid on a monthly basis in cryptocurrency. That monthly interest is then compounded to produce a 6.2 percent APY.
BIA crypto holdings are custodied at the Gemini Trust Company, which is regulated by the New York Department of Financial Services and also offers insurance coverage for the digital assets it holds in custody.
In Tuesday’s update, BlockFi further updated that the BIA now has over $100 million in assets under management – almost double the it had as of last month.
BlockFi is by notable investors including Mike Novogratz’s Galaxy Digital Ventures and Anthony Pompliano’s Morgan Creek Digital. The firm raised $4 million last December, and previously $52.5 million last July.
BlockFi image via CoinDesk archives
Published at Wed, 22 May 2019 10:00:22 +0000
