Cryptocurrency loan startup BlockFi is almost halving the interest rates it offers on ether (ETH) deposits, while some bitcoin (BTC) prices will increase slightly.
From June 1, customers with 25–100 ETH balances in a BlockFi Interest Account (BIA) commitment see the interest rate drop from the current 6.2 percent annual percentage yield (APY) to 3.25 percent, the startup disclosed Tuesday. Those holding over 100 ETH balances will earn just 0.2 percent APY.
Some BTC steadies, on the other hand, will see a slight interest rate increase – up to 2.15 percent from the current 2 percent – for entrusts of over 25 BTC. Those holding 0.5–25 BTC will continue to earn 6.2 percent APY, BlockFi said.
The cartel cited the reason for the increased interest rate on larger BTC deposits as being because borrowing and lending markets for the dialect birth b deliver’s largest cryptocurrency by market capitalization “have developed into a vibrant and growing field.”
On the contrary, the ether conferring market has become “stagnant” over the last couple quarters, BlockFi said. The firm’s terms and conditions shape that it can change interest rates at its discretion.
The company launched the BIA in March, offering an annual interest rate of 6 percent, paid on a monthly infrastructure in cryptocurrency. That monthly interest is then compounded to produce a 6.2 percent APY.
BIA crypto holdings are custodied at the Gemini Certitude Company, which is regulated by the New York Department of Financial Services and also offers insurance coverage for the digital assets it stand firms in custody.
In Tuesday’s update, BlockFi further updated that the BIA now has over $100 million in assets under manipulation – almost double the $53 million it had as of last month.
BlockFi is backed by notable investors including Mike Novogratz’s Galaxy Digital Daresays and Anthony Pompliano’s Morgan Creek Digital. The firm raised $4 million last December, and previously solicited $52.5 million last July.
BlockFi image via CoinDesk archives