No crypto winter for BlockFi as client base reaches 50%, deposits top $53M

No crypto winter for BlockFi as client base reaches 50%, deposits top $53M

Much has been made of the crypto winter that the industry has been going through. However, one company is thriving during this stormy period. Crypto lending startup BlockFi has been growing, and now claimed that it has grown its client base by 50% in just one month.

The startup pays interest on crypto deposits, which it then lends mainly to institutional clients. According to a recent blog post, BlockFi said it has brought in $18 million worth of Bitcoin Core (BTC) and ETH deposits since March. The total amount held in interest-paying accounts now stands at $53 million.

BlockFi also revealed that it had lowered the minimum amount that a user needed in order to earn interest. Previously, a user needed at least 1 BTC, which the firm has now lowered to 0.5 BTC. This was due to the high interest that the firm received from retail investors, the post explained.

The firm explained, “After launching BIA, a lot of users reached out to our team asking that we drop our minimum eligible balance to earn interest. We’re excited to let our community know that BTC balances of 0.5 BTC and up will now begin earning interest on their deposits.”

However, it wasn’t all good news, especially for ETH holders. BlockFi announced that it would lower the maximum balance for which it pays a 6.2% annual interest. Initially, the maximum balance stood at 500 ETH but it was lowered to 250 ETH. Any amount above this threshold is set to receive just 2% annual interest.

The reason for the change was the reduced interest in ETH, the company stated:

“BlockFi’s ability to pay interest to our clients is based on crypto market lending conditions. As we’ve touched on previously, we exclusively work with institutional counterparties to generate this yield. Over the past month, demand for borrowing ETH has dropped, and as a result, ETH tier rates will be adjusted in tandem.”

BlockFi’s CEO, Zac Prince, further revealed that the firm, which is backed by Mike Novogratz and SoFi, among others, has continued to attract more users. In a follow-up interview, he stated:

“We grew the client base around 50 percent in the first half of April from the end of March. We expect the quantity of new clients to increase further as we lower the minimum balance requirement for interest earning eligibility. We also see incremental deposits from existing clients, especially around the beginning of the month after interest payments are made.”

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