Take My Money!
Disclaimer: I am not a financial advisor. My intention is solely to entertain and inform. Please do your own research and consult a financial advisor before making any financial decisions. This post contains referral links.
Interest bearing savings accounts are dead. Negative interest rates are the norm. Banks now charge us money to keep our own money in their coffers. Fun times.
So imagine my delight when I came across BlockFi.com. It claims to offer a tempting 8.6% APY on your savings. My bullshit-detector perked up. This is too good to be true! Or is it?
BlockFi is a crypto bank backed by the who’s who of the Fintech/Crypto world (the Winklevii Twins, for example). Their mission: “to redefine Banking and to bridge the worlds of traditional finance and blockchain technology to bring financial empowerment to clients on a global scale”. It’s even launching a crypto-backed credit card soon with 1.5% cash-back rewards paid in Bitcoin.
So what do they promise?
An 8.6% APY on your USDC investemnts. You even get 5% APY on your Bitcoin. What’s more, the interest is compounded daily and paid out monthly. Also, there is no lock-in period so if you did need access to your funds, you can simply withdraw them. You can also choose what cryptocurrency you’d like your interest to be paid out in. So, the interest on my USDC savings gets paid out in USDC, but I could also choose to be paid out in Bitcoin instead.
So you could save your Bitcoin in BlockFi and get paid 5% interest in Bitcoin while hodling.
Or you could save your USDT in BlockFi and get paid 9.3% interest in USDT.
You see, BlockFi deals primarily in cryptocurrency. USDC and USDT are “stable coins” i.e. they’re pegged to the dollar. So, unlike Bitcoin, the value of one USDC or USDT remains stable at $1. Stable coins are essentially a crypto-version of USD. They exist to facilitate easier transactions between cryptocurrencies and fiat money.
Okay — so how did I get the 8.6% APY on my saings? Here’s how.
And that’s it — I immediately begin collecting interest.
So what’s the risk? Well, I can see two potential banana-skins:
- This is possibly only an introductory offer. As the number of account holders grow, I’d expect the promised APY to drop sharply. When this happens is anyone’s guess though — so I hopped on the bandwagon now to lock-in the best possible rates for my cash.
- Stable coins could crash and burn. USDT has had it’s share of controversy but is still by far the largest by market-cap and liquidity. USDC is a close, and growing, second. Remember, a guaranteed 8.6% return must come with some risk — in this case, the risk is that you are betting that stablecoins remain stable.
So there you have it — a quickfire introduction to BlockFi and it’s promise of delivering a guaranteed, compounded, market-beating return on your savings.
In my opinion, it’s the best deal going in town if you are willing to dip your toes into the world of crypto-banking.
BlockFi let’s my Bitcoin (or USDC/ USDT) earn more Bitcoin (or USDC/USDT) as I hodl. What’s not to like? So far, so good!
Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://akarshnalawade01.medium.com/this-bank-offers-a-whopping-8-6-apy-on-your-savings-17a0de8d7c8f?source=rss——-8—————–cryptocurrency
