Blockfi offers compound interest on crypto savings

[gentlemand]

https://www.coindesk.com/blockfi-now-offers-a-crypto-deposit-account-with-compound-interest

Does this fill people with excitement or fear?

The involvement of Gemini is certainly a large endorsement but I REALLY don't fancy the idea of sending a large amount of coins to someone who may shout 'compliance' when it's time to withdraw them.

I can imagine lending out to large traders could pay, that's what the DCG are already doing. I'd prefer it if they stuck to their own money doing it.

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[LeGaulois]

Not bad with a 6% interest rate, that's a decent one, better than the banks from here and their 0.7% p.a. at least. Or 2% at best
I could even be interested if I knew more about the "insurance coverage for the digital assets it holds in custody"

compliance is everywhere, even the traditional banks bother you with it...

[magneto]

https://www.coindesk.com/blockfi-now-offers-a-crypto-deposit-account-with-compound-interest

Does this fill people with excitement or fear?

The involvement of Gemini is certainly a large endorsement but I REALLY don't fancy the idea of sending a large amount of coins to someone who may shout 'compliance' when it's time to withdraw them.

I can imagine lending out to large traders could pay, that's what the DCG are already doing. I'd prefer it if they stuck to their own money doing it.

I certainly wouldn't participate in this.

Firstly, you know that they will be running a fractional reserve, which means that even though they may be trusted now, there is every possibility that they become insolvent or have a bank run scenario in the future. And you don't know what reserve percentage they keep.

Secondly, as you say, when you send coins to a third party investment like this you're always risking the fact that your account may be suspended/frozen, or withdrawals bouncing because they may use the excuse of KYC or AML without having to provide any more details than that. I certainly wouldn't just let of control of my funds like that.

Plus, they're not even the first ones to offer such a thing, in the past several Chinese companies and Magnr all had similar ideas that didn't take off because low interest rates and high risk.

[audaciousbeing]

Not bad with a 6% interest rate, that's a decent one, better than the banks from here and their 0.7% p.a. at least. Or 2% at best
I could even be interested if I knew more about the "insurance coverage for the digital assets it holds in custody"

compliance is everywhere, even the traditional banks bother you with it...

While I don't have the sufficient information as to the veracity of the entire project, I personally don't think the crypto community is ready for this kind of service and due to the skeptical nature of people here, its unfortunate I would need more assurances than what is currently available to even consider this as an option of investment. 6% is really not the problem as its sustainable but the problem is what they intend to use the funds for and how they intend to go about it to generate the promised return is a priority to me.

[gentlemand]

the problem is what they intend to use the funds for and how they intend to go about it to generate the promised return is a priority to me.

That's out in the open. They will take your coins and lend them to institutional investment types who'll trade with them.

It'll be similar to this - https://genesiscap.co  but that uses its own capital.

It won't be the average fly by night asshole but I do wonder what stops they have in place.

[1Referee]

It's not worth it for me. I would consider doing this if it was coming from a legacy bank, granted that everything is insured, but no freaking way I will trust any crypto related service to offer these products.

Better hold your coins firmly in your ledgers or other cold wallets. 6% isn't worth taking risks for in this case, and when they offer way more than that, it's not a good thing either, because that likely means they can't live up to their promises.

[gentlemand]

It's not worth it for me. I would consider doing this if it was coming from a legacy bank, granted that everything is insured, but no freaking way I will trust any crypto related service to offer these products.

I think my main beeves would be that I'd be funding shorters and opening the way to some form of fractional reservism becoming more mainstream. Neither are my favourite things. It will be interesting to see what demographic does go for it.

[Lanatsa]

That's out in the open. They will take your coins and lend them to institutional investment types who'll trade with them.

Just like how a normal bank would do. Using out peoples money for the purpose of giving out loans into other and interest rate is way much more higher than 6%.
Its always been part of the business actually but same as others as saying here 6% wont really be worthy to take the risk and i would definitely get that increase by just
holding my own assets/coins into my own wallet.

[mk4]

A big no for me. 6% is definitely an attractive percentage though, and I see people actually sending their funds over for that 6%. The thing though is, this is completely assuming that they could actually secure all the bitcoin that are being sort of "lent" to them. I'm not saying that they're going to get hacked, and I certainly hope they don't, but a company holding my bitcoin makes me feel very uncomfortable.

[joniboini]

Too risky for me. 6% sound good but I'd rather trade and make profits daily than sending my bitcoins where I don't have any control, especially if I don't have a lot of bitcoins. But this is more 'safe' compared to ICO, though I don't believe ICO maniacs will see this as a breakthrough. They'll probably send some bitcoins there and still play with ICO. Let's just see how good or bad customer experience with this one.

[gentlemand]

Too risky for me. 6% sound good but I'd rather trade and make profits daily than sending my bitcoins where I don't have any control, especially if I don't have a lot of bitcoins. But this is more 'safe' compared to ICO, though I don't believe ICO maniacs will see this as a breakthrough. They'll probably send some bitcoins there and still play with ICO. Let's just see how good or bad customer experience with this one.

It's in a bit of a no man's land.

Sensible Bitcoin fans will always regard any deposit with a third party as too risky. The degenerates who'll throw money at literally anything will regard the return as pitifully low.

[eternalgloom]

It's not worth it for me. I would consider doing this if it was coming from a legacy bank, granted that everything is insured, but no freaking way I will trust any crypto related service to offer these products.

I think my main beeves would be that I'd be funding shorters and opening the way to some form of fractional reservism becoming more mainstream. Neither are my favourite things. It will be interesting to see what demographic does go for it.

Yeah that would be my main issue with this too. You basically hand them control over your Bitcoins to do -whatever-.
I do see the appeal for people who don't want to trade themselves, but I think there are better ways to increase your Bitcoin holdings, without having to actually trade yourself.

[Hamphser]

A big no for me. 6% is definitely an attractive percentage though, and I see people actually sending their funds over for that 6%. The thing though is, this is completely assuming that they could actually secure all the bitcoin that are being sort of "lent" to them. I'm not saying that they're going to get hacked, and I certainly hope they don't, but a company holding my bitcoin makes me feel very uncomfortable.

Very uncomfortable indeed on where you do always think of regarding into those funds held by them unlike if you are just holding on your own storage you do really have that peace of mind.

[BitHodler]

Considering that people don't seem to care, they will utilize this opportunity to scoop up some passive income, which is also the main reason for people to mess around with cloud mining.

I'm not tempted by this at all, but that 6% will appeal to a lot of people in the crypto world, and based on that I'm sure that this will turn out to be a great success for Blockfi. I can already see this being shilled on social media.

Overall, the few people here that have enough brain cells won't touch it, but the ones that have very few brain cells represent the majority and they see this as an opportunity they won't say no to.

[gentlemand]

https://blockfi.com/blockfi-news/creating-products-for-the-everyday-crypto-investor/?utm_source=email&utm_medium=email&utm_campaign=mar20email&utm_term=firstparagraph

Well, looks like they're already dicking around with the interest rates. Now above 25 BTC or 500 ETH it's cut to 2%. That's in a handful of weeks. Funnily enough all these 'hedge funds' look like they preferred to get a safe return from them rather than pay to borrow to lose.

[gentlemand]

https://www.coindesk.com/crypto-lending-startup-blockfi-slashing-interest-rates-on-ether-deposits?

More rate changes. They're halving the interest on those who hold 25-100 ETH. They're upping it slightly for BTC.

Did anyone here bother in the end? I suppose they need to be reactive but this chopping and changing would irritate me.

[eternalgloom]

What the hell, why would they backtrack on the rates they've promised, that's reason enough for me to not want to get involved.
Okay, they've upped it a little bit for BTC, but they should just stick with what they've promised or not announce anything at all regarding the interest.

From the article:

Those holding over 100 ETH balances will earn just 0.2 percent APY

Source: https://www.coindesk.com/crypto-lending-startup-blockfi-slashing-interest-rates-on-ether-deposits?

Yikes, now that's definitely not worth it... Or is that a typo?

[gentlemand]

What the hell, why would they backtrack on the rates they've promised, that's reason enough for me to not want to get involved.

Because the rates will be hyper reactive to what they make from the traders they lend out to. Though they should've made that extremely clear from the off, there's no way they can subsidise the whole term if a market dies off.

Or is that a typo?

Not a typo. And it changed very rapidly for higher balances soon after launch. Looks like those big, tough trading gods would actually rather hide and get interest on their big balance rather than be out there bare chested on the trading battlefield. Pussies.