Risk Warning: Your Capital is at Risk.
BlockFi is a unique cryptocurrency exchange that doesn’t limit you to simply buying or trading digital assets — you can also borrow money against your crypto holdings, earn interest on your holdings, and apply for a Bitcoin Rewards Credit Card.
In this review, we’ll discuss BlockFi’s cryptocurrency exchange, list the fees they charge and give you a look at their platforms on mobile and desktop. We’ll also tell you if BlockFi’s available in and discuss BlockFi’s other services like loans, and credit cards.
Contents
BlockFi Overview
BlockFi offers cryptocurrency trading, but it also has banking products.
| Pros | Cons |
|---|---|
| ✅ Low fees compared to similar platforms and no monthly fees | ❌ Requires at least some crypto knowledge to use |
| ✅ Earn interest, trade, and borrow using the BlockFi App | ❌ Only accepts the following tokens: Bitcoin, Ethereum, Litecoin, and PAX Gold |
| ✅ Wallet insured by US-regulated Gemini | ❌ UniSwap and other DeFi platforms that do not perform KYC are unable to access BlockFi services |
| ✅ No minimum withdrawal |
Where Does BlockFi Operate?
BlockFi operates worldwide but is only regulated in the US on a state-by-state basis. You can trade crypto and take out crypto-backed loans in all 50 states.
Restricted Countries
BlockFi isn’t available in the following countries which are sanctioned by the United States:
- Cuba
- Iran
- North Korea
- Syria
- Turkey
- Venezuela
BlockFi’s Products
BlockFi offers crypto traders three different products:
- Cryptocurrency Trading
- Cryptocurrency-backed loans
- Bitcoin Rewards Credit Card (BRCC).
BlockFi Crypto Trading Account
Like other exchanges, BlockFi is designed with crypto-to-crypto trading in mind. Unlike Coinbase or Kraken, BlockFi requires traders to first convert their fiat currency into one of four USD-based stablecoins:
- USD Coin (USDC)
- Tether (USDT)
- Gemini Dollar (GUSD)
- PAX Standard (PAX)
Next, you’ll need to initiate a wire transfer to the BlockFi account with their unique pin as reference. The incoming funds will be converted to a stablecoin which in turn can be traded for Bitcoin, Ethereum, or other cryptocurrencies.
Digital Currencies Available On BlockFi
In addition to USD, BlockFi currently accepts the following currencies for deposits:
- Bitcoin (BTC)
- Ethereum (ETH)
- GUSD
- Litecoin
- PAX
- PAX Gold
- USDC
Earning Interest On Your Coins
BlockFi crypto accounts allow you to earn interest on your digital assets. Traders start earning interest immediately after their trades. For example, if a customer deposits 1 BTC in January and converts it to ETH on the 15th, they will earn 14 days worth of BTC interest and 16 days worth of ETH interest when they receive their next interest payments.
How Are BlockFi Trading Prices Set?
BlockFi doesn’t maintain an order book that matches Buy and Sell orders. Instead, the company purchases cryptocurrency on your behalf. The price you see when making a trade is the price that BlockFi is willing to buy or sell at, usually updated every 60 seconds.
This price is set based on several factors but is primarily informed by prevailing market conditions and is subject to change. However, BlockFi attempts to maintain an average of ±1% relative to the wider index price.
BlockFi Crypto-Backed Loans
BlockFi also offers crypto-backed loans. These loans use your cryptocurrency as collateral. Borrowers can lock part of their crypto holdings and receive USD in exchange. This enables HODLers to access their crypto capital without having to liquidate their assets.
How Do I Take Out a Loan?
The BlockFi loan process doesn’t require the checks normally associated with a traditional loan. You simply post your cryptocurrency as collateral and you are sent USD in return. All loans taken out with BlockFi are on 12-month terms.
Loan-to-Value Ratio
The amount of cryptocurrency you put up is determined by the loan-to-value (LTV) ratio. BlockFi uses risk modeling to ensure that the LTV is conservative enough to protect both the lender and borrower in case of extreme market volatility.
The formula for an LTV is as follows:
If the cryptocurrency market increases or decreases significantly, it’s possible that your LTV changes. This means that you may need to either put up more collateral or be able to retrieve part of your collateral without changing the loan terms.
☞ You can find out more info on loan interest rates and origination fees in our Fee section below.
How Do I Pay Back My Loan?
Loan payback depends on whether you have a domestic or international loan. US domestic loans are covered by Scratch, a loan servicing company. International loans are covered by BlockFi themselves. Borrowers can pay down their loan at any time via wire transfer or stablecoins.
There is currently no penalty for early payment. Once a borrower has paid off their entire loan balance, their collateral will be released immediately.
If you’re unable to pay back your loan, BlockFi will take control of your capital.
Will a BlockFi Loan Impact My Credit Score?
BlockFi doesn’t run a credit check, which means that your credit score will be unaffected. The loan is secured by collateral in the form of your crypto asset holdings.
Bitcoin Rewards Credit Card
The Bitcoin Rewards Credit Card (BRCC) acts like an ordinary Visa credit card with a twist: you get 1.5% cashback in the form of Bitcoin on all of your purchases.
The credit card comes with several different rewards including:
- $250 in bitcoin as a signup bonus if you spend $3,000 within your first three months.
- 3.5% bitcoin rewards on all purchases in months 4-6 of card ownership, up to $100 in bitcoin.
- 2% extra APY on your average daily stablecoin balance, paid in bitcoin, up to $200.
- 0.25% back in bitcoin on all eligible trades, up to a maximum of $500 in bitcoin each month.
- $30 in bitcoin for every client referral, on top of the base Refer-a-Friend program.
The BRCC also comes with the standard benefits of owning a Visa Signature card, including roadside dispatch, no international transaction fees, travel emergency services, and more.
The card is expected to be available to U.S. residents in selected states in 2021. Your place on the waitlist is based on the number of accounts you refer to BlockFi, and the date you signed up. The more accounts you refer and the older your registration date, the higher up you are.
The Bitcoin Rewards Credit Card (BRCC) is not yet available but you can sign up for the waitlist on BlockFi’s website.
BlockFi Deposits and Withdrawals
Here’s a an overview of how deposit and withdrawals work with BlockFi and what payment methods are available for customers.
Funding Methods
There are a few ways that traders can fund their BlockFi accounts. You can use one of their supported cryptocurrencies or directly fund your account using USD. There are no minimum or maximum deposit limits for BlockFi.
How To Deposit With Digital Wallets
After your account has been approved you can go to BlockFi’s dashboard and find the interest account tab. Here you can find your unique wallet address by clicking the deposit button on your preferred cryptocurrency.
If you have a mobile wallet you can scan its QR code to obtain the wallet address or just copy and paste it. Always confirm that you’ve got the correct wallet address before sending cryptocurrency.
How To Add a Bank Account
You can add a bank account for deposits and withdrawals using Plaid, a service that connects to most online banking accounts. Plaid will require you to log into your bank account using your credentials, including any two-factor authentication (2FA) methods you’ve set up. Once you are logged into your financial institution’s online portal you can link your account.
Alternatively, you can fund your account via wire transfer by quoting your BlockFi account’s unique ID in the payment reference.
Withdrawals
There is no lock-up period and traders can withdraw their assets at any time. You get one free withdrawal a month. There is a $10 withdrawal minimum.
BlockFi Fees and Chargess
BlockFi has a competitive fee structure. These fees are only applied on withdrawals and there is a 7-day withdrawal limit per currency, detailed in the table below:
| Cryptocurrency Ticker Symbol | Withdrawal Limit Per 7-Day Period | Fee |
|---|---|---|
| BTC | 100 BTC | 0.00075 BTC |
| ETH | 5,000 ETH | 0.02 ETH |
| LINK | 65,000 LINK | 0.95 LINK |
| LTC | 10,000 LTC | 0.0025 LTC |
| All Stablecoins | $1,000,000 | $10.00 USD |
| PAXG | 500 PAXG | 0.015 PAXG |
BlockFi does not charge any trading direct fees. BlockFi instead charges a spot price which may vary ±1% relative to an asset’s spot index price.
Loan Origination Fees and Interest Rates
Crypto-backed loans from BlockFi are limited by your collateral based on the following data:
| Loan-to-Value (LTV) | Interest Rate | Origination Fee |
|---|---|---|
| 50% | 9.75% | 2% |
| 35% | 7.9% | 2% |
| 20% | 3.5% | 2% |
How to Open a BlockFi Account
The BlockFi account allows traders to access all BlockFi services, including loans and trading.
To set up a BlockFi account traders will need to provide the following information:
- A valid email address
- Phone number
- Current address
- Date of birth
- Your primary source of funds
- Your Social Security Number (if you live in the US.)
They will need at least one of the following additional documents to verify your address:
- A valid driver’s license
- Property tax receipt
- Posted mail with your name
- Utility bill
- Lease agreement
Next, you’ll need to initiate a wire transfer to the BlockFi account with their unique pin as reference. The incoming funds will be converted to a stablecoin which in turn can be traded for Bitcoin, Ethereum, or other cryptocurrencies.
BlockFi Crypto Trading Platform Review
BlockFi’s cryptocurrency trading features are limited compared to other platforms. There are no analysis tools and no crypto-fiat currency pairs available to trade. Traders can only exchange a relatively small number of cryptocurrency pairs.
However, BlockFi works well for HODLers who are only interested in Bitcoin or Ethereum and do not plan to make regular trades.
BlockFi’s cryptocurrency exchange includes a limited list of available coins, especially compared to other platforms like Coinbase.
BlockFi’s trading ticket does not offer risk-mitigation like stop-loss or take-profit limits.
This screenshot is only an illustration. Current market prices can be found on the broker website. Please note, this is an example – not a recommendation.
BlockFi’s Mobile App
The BlockFi Mobile app is available on both Android and iOS. The mobile app mimics the capabilities and features available in the desktop browser, including borrowing money, trading, and making withdrawals.
BlockFi Customer Support
BlockFi has a fairly robust support system. It provides an extensive Help Center as well as the following contact options:
- Chat Support – An AI-powered smart assistant called BotFi that will pass your request onto a client service specialist if necessary.
- Phone Support – Available for urgent requests from 9:30AM – 5PM ET Monday through Friday.
You can find the contact details for support on your account page.
Is BlockFi Trustworthy?
BlockFi is regulated only in the United States and its assets are protected by Gemini. The company has yet to lose any of its clients’ money with a fairly robust risk management strategy. It also comes with features to help protect its customers’ peace of mind.
What Is Gemini?
Gemini is a company that acts as BlockFi’s licensed custodian. Gemini is regulated by the New York State Department of Financial Services (NYDFS). Gemini has received SOC2 compliance from Deloitte for its custody service. Gemini keeps 95% of its assets in cold storage and around 5% in hot wallets that are insured by Aon. This helps to protect BlockFi customers in the case of a data breach.
How Does Gemini Protect Your Crypto Assets?
Gemini uses multi-signature digital signature schemes to eliminate single points of failure and uses HSMs with a FIPS 140-2 Level 3 rating or higher. They also have procedural systems designed to eliminate or mitigate human error. Gemini also uses 2FA and other best-practice security measures.
Are BlockFi Deposits Protected by the FDIC?
BlockFi is not covered by the FDIC or SIPC, or any similar protections. Instead, the company relies on its robust risk management strategies and a variety of other services. These services include making assets available for withdrawal, purchasing equities, and offering risk management to the lending activities in the institutional markets.
Does BlockFi Have 2-Factor Authentication (2FA)?
BlockFi allows 2FA via the Google Authenticator app. Once enabled, you will only be able to login to BlockFi using a code generated by the Authenticator.
What Is Allowlisting On BlockFi?
Allow listing is a feature available to all BlockFi accounts that ensures the cryptocurrency in your account can only be sent to known addresses. It can also be used to restrict all cryptocurrency withdrawals. Every address is subject to a 7-day approval period before it is activated for withdrawals, helping to protect your assets.
Optional Biometrics For Security
You have the option to enable biometrics on the BlockFi mobile app. Biometrics lets you use your phone’s fingerprint sensor to unlock your BlockFi account.
It’s especially handy if you lose your phone since it prevents others from using your crypto trading account.
BlockFi Company Background
BlockFi was founded in 2017 by Zac Prince and Flori Marquez to provide credit services to markets with limited access to traditional banking. The company has institutional backing from investors including Valar Ventures, Galaxy Digital, Fidelity, Akuna Capital, SoFi, and Coinbase Ventures.
BlockFi has offices across the world including New York, New Jersey, Poland, and Argentina.
FAQs
What is the BlockFi Bitcoin Trust?
Launched in February 2021, the BlockFi Bitcoin Trust is an alternative way to buy Bitcoin (BTC) via a trust. Access to the trust is limited. Global institutions and qualified investors can purchase shares in the trust, allowing for ownership of Bitcoin without actually storing the cryptocurrency yourself. Later in the program, shares of the trust will be available for other individual investors.
Has BlockFi ever been hacked?
In May 2020, hackers gained unauthorized access to BlockFi user’s names, e-mail addresses, date of birth, and service activity history. That said, BlockFi released an incident report in which they claim that the hacker activity was logged, and no funds, nor public or formal documentation was compromised. The hack was conducted through a SWIM swap, meaning that the hacker(s) gained access through a BlockFi employee’s phone.
When will the Bitcoin Rewards Credit Card be available?
The BlockFi Bitcoin Rewards Visa Card will become available in Spring 2021, but no exact date has been published. Users can move up the waiting list by referring more users, though the earlier you register, the earlier you may be eligible for a card.
