BlockFi to Raise Interest Rates on Crypto Deposits, despite Encounter Bear Market
Nicholas Otieno Jun 27, 2022 02:55
BlockFi has revised upwards interest rates on cryptocurrency deposits with effect from 1st July. Also, FTX is in discussions to acquire a stake in BlockFi.
BlockFi, a major crypto lending platform based in New Jersey, announced last Friday that it would increase deposit rates across several cryptocurrencies starting from July 1.
The crypto lender said it would lower withdrawal fees on various cryptocurrencies. Additionally, the firm also stated it will end a policy that allows one free withdrawal per month. All these policies start taking effect on July 1.
BlockFi stated the reason for increasing interest rates comes from its ongoing mission to offer substantial and long-term customer service while expanding its product offerings, as well as a changing macro yield environment and decreasing market competition.
The crypto lender said it would increase deposit rates for BTC, ETH, USDC, GUSD, PAX, BUSD, and USDT in its BlockFi Interest Account (BIA) beginning next month. The firm also said it would reduce fees for withdrawing BTC, ETH, and stablecoins starting from July 1 as well.
Interest rates are normally set based on the market trends for lending and borrowing assets. The company said all prices shown on its rate dashboard are current; therefore, the new rates will be effective at the start of next month.
BlockFi further mentioned that the rates on cryptocurrencies held in its BIA accounts are basically driven by institutional demand for borrowing assets.
Apart from the increased interest rates, the firm further said it is changing its withdrawal structure effective July 1 because of high withdrawal demands.
The company stated it will scrap a policy allowing one-free monthly withdrawal for BTC, ETH, and stablecoins. The firm also said it will lower all those assets' withdrawal fees.
BlockFi said it has accommodated the new withdrawal structure based on the current market downtrend. Therefore customers are expected to pay a maximum of $25 for transaction fees, depending on the asset.
The latest announcements by BlockFi come after the lender had secured a $250 million loan from FTX exchange and laid off 20% of its employees to improve its finances.
On Wednesday, BlockFi announced that it received a $250 million line of credit from FTX a day after Sam Bankman-Fried, FTX CEO, said that the exchange would bail out other struggling crypto firms.
Meanwhile, other related reports indicate that FTX is in talks to acquire a stake in BlockFi. According to Reuters, no equity agreement has yet been reached, and discussions are ongoing.
Last week, BlockFi joined many crypto firms hit by the current dramatic market downturn. BlockFi announced massive job cuts to weather the ongoing crypto winter.
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