BlockFi Issues $20 Million In Bitcoin, Ethereum Interest Payments

Zac Prince, the CEO of crypto lending platform BlockFi, announced that the company has paid more than $28 million in interest for the month of January.

“Another record breaking month of interest payments,” he tweeted, adding, “Our clients earned over 28M in interest for January including >400 btc, >4500 ETH and 5M in stable coins.”

BlockFi is letting users earn at a rate that’s nearly 123-times higher on dollar-backed cryptocurrencies known as stablecoins. More specifically, the company is currently paying an 8.6% interest rate on savings accounts holding the Gemini dollar. The stablecoin introduced by the Winklevoss twins’ regulated and audited New York trust company Gemini.

Interest is paid out monthly by BlockFi in either a dollar equivalent or a favored cryptocurrency like Bitcoin or Ethereum. Both cryptocurrencies made up the lion’s share in January, as roughly 400 BTC (currently worth around $14 million) and 4,500 ETH ($6.43 million) were paid out as interest.

“The yield comes from our lending activities. On the dollar side, we lend to both retail and institutions. On the crypto side, we lend to just institutions,” Prince previously said.

While most Bitcoin lending firms have been seeing significant growth of assets under their management (AUM) throughout 2020, BlockFi topped them all. Over the last year alone, the firm’s AUM increased by a record 1,500%, going from $250 million to over $4 billion.

Blocks Submits Registration Fro Bitcoin Trust

BlockFi recently submitted a registration form for a Bitcoin Trust with the SEC. Which, if approved, would make it a direct competitor of the Grayscale Bitcoin Trust (GBTC).

BlockFi also launched an over-the-counter (OTC) trading desk that institutional investors can use to exchange large amounts of BTC. This method allows big players to conduct massive deals without directly affecting the global market price of an asset.

“Existing institutional clients are already using many of these BlockFi services independently. Noting the benefits of having a one-stop destination for their digital asset trading and financing needs,” Prince said.

Perhaps as a result of BlockFi’s huge OTC deal, over 15,200 BTC (worth nearly $500 million) was transferred out of crypto exchange Coinbase Pro on Monday. Speculation is rife it could have gone to Guggenheim’s new Bitcoin trust that opened that day.

Founded in 2017, BlockFi is a centralized crypto lending firm. As opposed to the booming decentralized finance sector, that lends cryptocurrencies to big companies. In their turn, these crypto funds are made up of investments. Made by retail and high-net worth users, for which they are regularly paid interest.

Please leave this field empty

Subscribe Today
for our Weekly Newsletter

Email Address *

Free Weekly Crypto News without the spam.

Check your inbox or spam folder to confirm your subscription.