Despite the price of premier alt-tokens such as Bitcoin still struggling to garner bullish momentum, crypto lending platform BlockFi has just announced that it will be now providing clients with the option to claim compound interest returns on investments via crypto assets such as Bitcoin or Ethereum.
As per a blog post issued by BlockFi’s PR team on March 04, 2019, the firm announced the official release of a “new cryptocurrency account” that supports two of today’s largest digital currencies by total market capitalization, namely BTC and ETH. In addition to this, the announcement also states that these accounts bear a 6 percent annual interest that is passed on to clients in the form of the above mentioned crypto-assets.
Lastly, the monthly interest that is procured on any amount (that is deposited by the user) is then turned into compound interest, resulting in annual profits of around 6.2 percent. BlockFi’s custodial solution is looked after by the Gemini Trust Company — a venture owned and operated by the Winklevoss twins.
More on the Matter
Even though many crypto enthusiasts believe that this latest offering is an excellent way for altcoin investors to increase their wealth, individuals like Jake Chervinsky are not impressed with what BlockFi is bringing to the table.
Via a series of disparaging tweets released over the past couple of days, Chervinsky stated that BlockFi’s new crypto account is comparable to the ICO bubble of 2017— a time during which the unique fundraising method was able to attract a lot of attention. However, as soon as the hype surrounding this digital offering subsided, the entire market disappeared almost overnight.
In regards to the matter, Chervinsky stated that people who think that crypto lending platforms such as BlockFi can allow them to become “risk-free creditors & collect interest on any size loan” are severely misguided.
However, as soon as he started with all the mudslinging, many independent crypto analysts such as @Fonta1n3 also took to Twitter to voice their opinions on the matter.
Obviously nobody thinks this.
— Fontaine ⚡️ (@F0nta1n3) March 5, 2019
Fontaine also added:
“I think BlockFi provides a great service that allows anyone to obtain USD denominated loans at reasonable rates and earn interest denominated in BTC. Everything has a risk but if we are going to democratize finance this is a step forward. Financialization network effect starting.”
In closing out this piece, it is worth mentioning that some big name players such as Morgan Creek’s Anthony ‘Pomp’ Pompliano as well as Galaxy Digital’s Mike Novogratz have already invested in BlockFi. It now remains to be seen how the future of the firm plays out from here on end.
This is a custodial service that pays interest. Definitely possible to pay 6% and in fact, there are plenty of retail and institutional investors who have been using the product and getting paid already 🙂
— Pomp 🌪 (@APompliano) March 5, 2019