BlockFi stands as one of the first crypto startups to offer lending services within the crypto market. On Thursday of this week, the company made an announcement regarding their interest rates. In particular, the company will be changing the yields of the lending program with regards to how people buy Ethereum (ETH) and buy Bitcoin (BTC). These changes are set to start on the 1st of February.
While BTC and ETH will have adjusted rates, the rates for things like the Gemini Dollar (GUSD) as well as the price you buy Litecoin (LTC) for will remain unchanged. It seems BlockFi saw no cause of concern within those two crypto forms.
Changing Market Conditions Mandate Changing Rates
Zac Prince, the CEO of BlockFi, explained that the crypto markets were becoming more and more bullish. With a bullish market, a larger flow of money is expected, and Prince states that it will bring yields down for both BTC and ETH.
Prince explained that this change in market conditions, especially considering it’s a bullish change, inadvertently affects prices within the crypto borrowing markets. These markets, Prince told, are a significant driver when it comes to the rates BlockFi is capable of offering to its respective clients.
The Official Rates
The official numbers were given quickly after that. BlockFi’s “Tier 1” customers will be capable of lending up to 10 BTC and gaining a yield of 5.1% for their troubles. As it stands now, a customer can loan up to half of that, 5 BTC, and receive a yield of 6.2%.
Ethereum wasn’t exempt from this either. The Tier 1 lenders of ETH will have their rate drop down to 3.6% when it comes to a loan of up to 1000 ETH. The previous lending worked with 500 ETH and yielded 4.2%
There are some rises in yields, though only for select Tiers of users. Users that hold 5 BTC or more are referred to as Tier 2 and will enjoy a 3.2% yield compared to the previous one of 2.2%.
Similarly, ETH lenders of the Tier 2 regions will enjoy a small rise as well. The surge will clock in at 2%, compared to the previous 0.5% yield that the yield for Tier 2’s over 500 ETH options had previously offered.
Even with the changing rates, Prince claimed that the rates of BlockFi were still far more attractive than the alternative options. Furthermore, he claims to be the only interest-earning platform within the regulated US climate that caters to retail clients, doesn’t use utility tokens, and is institutionally backed.