BlockFi, the cryptocurrency lending platform, set the market alight in early March after launching its Bitcoin [BTC] and Ethereum [ETH] savings account. Since its introduction, BlockFi’s cryptocurrency deposits have risen massively, and were further buoyed by April’s crypto rally.
According to the April 23 update by BlockFi, its interest account balance in cryptocurrencies for April is over $53 million. Since the sum was just over $40 million in March, a whopping 30 percent increase was recorded in April. The March and April figures stand out in comparison to the first two months of the year when the balance was below $12 million.
Additionally, BlockFi made a number of changes to savings accounts, which will be applicable from May 1. The previous minimum balance of 1 BTC will be reduced to 0.5 BTC, which they stated would apply “retroactively” from April 1. This would imply,
“That means if your BIA BTC balance was between 0.5 and 1 BTC in April, you’re eligible to receive interest at the end of April. We expect to lower our minimum balance further in the near term.”
Ether will also see a reduction in its minimum balance from 500 ETH to 250 ETH and will earn an annual percentage yield [APY] of 6.2 percent. However, citing the declining “demand for borrowing ETH,” the tier rates for the top altcoin will be “adjusted in tandem.”
Finally, BlockFi also announced that they will be expanding to India given the rising demand for its cryptocurrency lending and depository products, over the month. The South Asian giant will be added to the 65 countries the platform already operates in.
Few weeks after launching their BTC and ETH savings account, customers noticed a “flexible interest rate” being touted on BlockFi’s terms page, making them question the 6.2 percent interest rate claimed by BlockFi. The terms read,
“We will determine the interest rate for each month in our sole discretion, and you acknowledge that such rate may not be equivalent to the benchmark interest rates observed in the market for bank deposit accounts.”
Zac Prince, the Chief Executive of BlockFi responded to community concerns, clarifying that the account’s interest rate would be “higher” when the market declines and “lower” when the market rises, as the “demand to borrow Bitcoin is partially driven by market sentiment.”
BlockFi’s recent statement also shed light on this fluctuating interest rate.
“As rates change in the market, we adjust the rates our clients receive. Our goal is always to provide the most competitive prices, so that you can get the most out of your crypto investments.”
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