BlockFi Interest Account (8.6% APY) with Stablecoin

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wmvink
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by wmvink »

Gadget wrote: Sun Feb 28, 2021 6:48 am What do you mean transfer it out for upside. You mean put your crypto in Blockfi to earn interest, then take a loan out? That seems even riskier to me... The most likely scenario of Blockfi going under involves crypto prices crashing hard. In that scenario, you'd have a loan you couldn't pay back with your crypto, and you'd be out all your crypto at Blockfi.
No I meant transferring your bitcoin/ethereum from BlockFi to your own wallet (e.g. Metamask, or an offline wallet). The downside is that outside of BlockFi, you don't earn interest on your balance. But...... on the flip side it means you have 100% control over your crypto, because you hold the private key. If BlockFi or your wallet provider (e.g. Metamask) were to go under you'd be fine.

The motto is "Not Your Keys, Not Your Coins". See here a good summary of why that is the case.
Samosa22
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by Samosa22 »

This is from BlockFi website (emphasis mine);
How does BlockFi custody assets? / What are the risks with depositing my crypto at BlockFi?

When clients send crypto to their BlockFi account or purchase additional crypto within the BlockFi Interest Account, that digital asset is replaced with an obligation to return the same amount of that crypto plus any interest earned. In order to pay our clients crypto interest on a monthly basis and to meet withdrawal requests on a timely basis, we engage in a number of activities, including (1) keeping a material amount of digital assets available for withdrawal with third parties such as Gemini, BitGo, and Coinbase; (2) purchasing, as principal, SEC-regulated equities and predominately CFTC-regulated futures and (3) applying risk management to the lending activities in the institutional market. The credit risks to these institutions are mitigated by credit due diligence and/or collateral (such as cash, crypto, or other assets).


Digital currency is not legal tender, is not backed by any government, and the BlockFi Interest Account is not a bank account nor a brokerage account, and is not subject to FDIC, SIPC, or other similar protections. Interest rates, withdrawal limits, and fees are subject to change and are largely dictated by market conditions. This is not a risk-free product and loss of principal is possible.
May be they are able to pay crypto interest to their clients by "investing" in GameStop. 8-)
Diversification is protection against ignorance - WB.
SlowMovingInvestor
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by SlowMovingInvestor »

Question -- for Stablecoins (pegged to the $) purchases/redemptions, should one keep track of cost basis (for the possibility that the peg doesn't hold up) and all other transactions (say shifting between 2 stablecoins) ?

I gather that BlockFi at least does provide a 1099-B for all Stablecoin transactions, but with a total gain/loss of 0. But with another company such as Celsius, does one have to maintain transactions ?

Even for BlockFi, it seems like they don't do TT downloads, so a lot of 0 gain/loss transactions might have to be entered manually, which is annoying.
wmvink
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by wmvink »

This is my first year with BlockFi and I'm holding stablecoins only. But I really don't plan to enter 0 gain/loss transactions. Seems a waste of my time and that of the IRS.
SlowMovingInvestor
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by SlowMovingInvestor »

wmvink wrote: Mon Mar 01, 2021 1:01 pm This is my first year with BlockFi and I'm holding stablecoins only. But I really don't plan to enter 0 gain/loss transactions. Seems a waste of my time and that of the IRS.
If transactions were automatically downloadable into TT, I wouldn't care. But it seems like BlockFi doesn't have that ability right now.

Which stablecoins do you hold ? BlockFi's default is GUSD, but I wonder if it's because Gemini is an investor. USDC might be safer, but .. it means another annoying transaction (GUSD -> USDC) to track in a spreadsheet.
dru808
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by dru808 »

SlowMovingInvestor wrote: Mon Mar 01, 2021 2:24 pm
wmvink wrote: Mon Mar 01, 2021 1:01 pm This is my first year with BlockFi and I'm holding stablecoins only. But I really don't plan to enter 0 gain/loss transactions. Seems a waste of my time and that of the IRS.
If transactions were automatically downloadable into TT, I wouldn't care. But it seems like BlockFi doesn't have that ability right now.

Which stablecoins do you hold ? BlockFi's default is GUSD, but I wonder if it's because Gemini is an investor. USDC might be safer, but .. it means another annoying transaction (GUSD -> USDC) to track in a spreadsheet.

Not the op but, I went ahead and diversified, usdc, gusd & dai.
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SlowMovingInvestor
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by SlowMovingInvestor »

dru808 wrote: Mon Mar 01, 2021 3:16 pm
SlowMovingInvestor wrote: Mon Mar 01, 2021 2:24 pm
wmvink wrote: Mon Mar 01, 2021 1:01 pm This is my first year with BlockFi and I'm holding stablecoins only. But I really don't plan to enter 0 gain/loss transactions. Seems a waste of my time and that of the IRS.
If transactions were automatically downloadable into TT, I wouldn't care. But it seems like BlockFi doesn't have that ability right now.

Which stablecoins do you hold ? BlockFi's default is GUSD, but I wonder if it's because Gemini is an investor. USDC might be safer, but .. it means another annoying transaction (GUSD -> USDC) to track in a spreadsheet.

Not the op but, I went ahead and diversified, usdc, gusd & dai.
Thanks. Did you do any stablecoin transactions (GUSD -> USDC, for instance) last year and has BlocKFi sent you a 1099-B ?

One can presumably aggregate all BlockFi transactions into a single entry on Form 8949 if one didn't transfer in any cryptocurrency from outside and sell at BlockFi (in that case, BlockFi wouldn't have cost basis, and the IRS requires taxpayers to fill in all transactions on form 8949 if the 'brokerage' has not reported cost basis.
parval
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by parval »

Just curious why BlockFi over Nexo? I have my BTC on BlockFI, but Nexo gives 10% on stablecoins, thinking of moving my usdc over there but maybe just easier to consolidate and lose the 1.4% :moneybag
dru808
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by dru808 »

parval wrote: Mon Mar 01, 2021 7:31 pm Just curious why BlockFi over Nexo? I have my BTC on BlockFI, but Nexo gives 10% on stablecoins, thinking of moving my usdc over there but maybe just easier to consolidate and lose the 1.4% :moneybag
Why nexo over Celsius? I’m with Celsius but nexo was a close second. Blockfi while US based is the least transparent, has the lowest apy of the 3, rates are subsidized by vc and they have been hacked. No coins lost, customers info is on the dark/deep web.
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SlowMovingInvestor
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by SlowMovingInvestor »

dru808 wrote: Mon Mar 01, 2021 8:23 pm Blockfi while US based is the least transparent, has the lowest apy of the 3, rates are subsidized by vc
I like the fact they have the lowest APY (because I tend to associate reward with risk) and are VC backed. Also that they don't have their own token. And they have a separate custodian, and it seems like they even lend out to institutions for non crypto purposes (which would diversify them more).

But as always, YMMV

[Oh, and a side comment about Celsius: No, their CEO didn't invent VOIP]
wmvink
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by wmvink »

I'm with Nexo and BlockFi as of just over a week. Also opened an account with Celsius but haven't transferred funds in yet.

As SlowMovingInvestor wrote, of those three, only BlockFi doesn't have its own token. While I did convert 15% of my stablecoins into Nexo tokens to get the 10% interest (if you don't buy Nexo tokens you only get 8%), I find these tokens incredibly sketchy.

The *only* reason to buy the Nexo token is to reap the extra 2% interest, and to get some dividends - at the mercy of Nexo. Nexo created this token out of thin air. Through appreciation and suckers like me buying it, the market cap of their token is now more than $1.2B. Those who joined Nexo early were able to reap a 3000% gain on their Nexo tokens (from $0.07 to $2.18) and the Ponzi scheme continues with people like me buying in at this ridiculous price.

So why did I do it? Worst case, the Nexo token falls back to zero. But if that were to happen, I would be fine because I still would have enjoyed the 2% bump in interest on my stablecoins. And if everyone thinks that way, people won't stop buying Nexo tokens and the price will continue to go up for infinity.

I'd love to hear others' thoughts on the Nexo and Celsius tokens. Am I missing something?
dru808
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by dru808 »

SlowMovingInvestor wrote: Mon Mar 01, 2021 9:14 pm
dru808 wrote: Mon Mar 01, 2021 8:23 pm Blockfi while US based is the least transparent, has the lowest apy of the 3, rates are subsidized by vc
I like the fact they have the lowest APY (because I tend to associate reward with risk) and are VC backed. Also that they don't have their own token. And they have a separate custodian, and it seems like they even lend out to institutions for non crypto purposes (which would diversify them more).

But as always, YMMV

[Oh, and a side comment about Celsius: No, their CEO didn't invent VOIP]

They all have separate custodians. You like the fact that Gemini is blockfi’s custodian? are your blockfi lent coins in the insured custody of Gemini?

You prefer a lower rate? Look into Gemini earn.

I have no beef with blockfi, they were the company I was going to go with until I discovered their competitors and found them to be better in all aspects.
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SlowMovingInvestor
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by SlowMovingInvestor »

dru808 wrote: Mon Mar 01, 2021 10:49 pm
They all have separate custodians. You like the fact that Gemini is blockfi’s custodian? are your lent coins in the insured custody of Gemini?

You prefer a lower rate? Look into Gemini earn.
Lent coins won't be in custody for any company, obviously. Although I'm assuming crypto collateral would be in custody. But I like the fact that a large NY company is the custodian.

They also have a deal with Fido to allow institutions to get cash loans against cryptocurrency. It's possible that's being hyped a little, but it strikes me as encouraging that cash loans are being made for (presumably) non crypto activity rather than for yield farming.

If I were doing some active trading, then I'd keep certainly keep coins at Gemini rather than transferring in and out.

It's not so much that I prefer a lower rate, so much as that I don't like chasing the highest rate in a risky asset class. But as I said, YMMY.
dru808
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by dru808 »

wmvink wrote: Mon Mar 01, 2021 10:21 pm I'm with Nexo and BlockFi as of just over a week. Also opened an account with Celsius but haven't transferred funds in yet.

As SlowMovingInvestor wrote, of those three, only BlockFi doesn't have its own token. While I did convert 15% of my stablecoins into Nexo tokens to get the 10% interest (if you don't buy Nexo tokens you only get 8%), I find these tokens incredibly sketchy.

The *only* reason to buy the Nexo token is to reap the extra 2% interest, and to get some dividends - at the mercy of Nexo. Nexo created this token out of thin air. Through appreciation and suckers like me buying it, the market cap of their token is now more than $1.2B. Those who joined Nexo early were able to reap a 3000% gain on their Nexo tokens (from $0.07 to $2.18) and the Ponzi scheme continues with people like me buying in at this ridiculous price.

So why did I do it? Worst case, the Nexo token falls back to zero. But if that were to happen, I would be fine because I still would have enjoyed the 2% bump in interest on my stablecoins. And if everyone thinks that way, people won't stop buying Nexo tokens and the price will continue to go up for infinity.

I'd love to hear others' thoughts on the Nexo and Celsius tokens. Am I missing something?


I hear this token talk all the time but would like to understand, what’s the issue with their own token? It’s an incentive for higher rates being paid in said token in or holding a certain percentage of the token.

I don’t hold cel, I opt out and still get a higher rate than the competition. I cant even get paid in cel or nexo if I wanted as I’m US based.
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wmvink
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by wmvink »

dru808 wrote: Mon Mar 01, 2021 11:24 pm I hear this all the time but would like to understand, what’s the issue with their own token? It’s an incentive for higher rates being paid in said token in or holding a certain percentage of the token.
For me the biggest issue compared to other tokens/coins is that it's tied to a single company. If Nexo goes under, their token becomes worthless. If Nexo decides to stop paying dividends to token holders, the token value will go down. If Nexo decides to reduce the interest premium for Nexo holders, the token value will go down.

You would argue that its in Nexo's best interest to not screw with the scheme. But what if a competitor offers significantly higher interest rates causing a mass exodus, with all token holders selling their tokens....? Seems they can only keep this going if they continue to offer the highest interest rates.
dru808 wrote: Mon Mar 01, 2021 11:24 pm I don’t hold cel, I opt out and still get a higher rate than the competition. I cant even get paid in cel or nexo if I wanted as I’m US based.
Yes I'm with you there. I'm US based too so can't get interest paid in those tokens. I purchased the Nexo tokens in a roundabout way (convert USDC --> BNC at Nexo, transfer to Trust Wallet, convert BNC to Nexo token, then transfer back to Nexo).
dru808
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by dru808 »

wmvink wrote: Mon Mar 01, 2021 11:36 pm
dru808 wrote: Mon Mar 01, 2021 11:24 pm I hear this all the time but would like to understand, what’s the issue with their own token? It’s an incentive for higher rates being paid in said token in or holding a certain percentage of the token.
For me the biggest issue compared to other tokens/coins is that it's tied to a single company. If Nexo goes under, their token becomes worthless. If Nexo decides to stop paying dividends to token holders, the token value will go down. If Nexo decides to reduce the interest premium for Nexo holders, the token value will go down.

You would argue that its in Nexo's best interest to not screw with the scheme. But what if a competitor offers significantly higher interest rates causing a mass exodus, with all token holders selling their tokens....? Seems they can only keep this going if they continue to offer the highest interest rates.
dru808 wrote: Mon Mar 01, 2021 11:24 pm I don’t hold cel, I opt out and still get a higher rate than the competition. I cant even get paid in cel or nexo if I wanted as I’m US based.
Yes I'm with you there. I'm US based too so can't get interest paid in those tokens. I purchased the Nexo tokens in a roundabout way (convert USDC --> BNC at Nexo, transfer to Trust Wallet, convert BNC to Nexo token, then transfer back to Nexo).
Gotcha, makes sense.
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ohboy!
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by ohboy! »

Cool. I started the other thread on blockfi/celsius. I find Alex Mashinski of Celsius to be an interesting guy. I use both. Using a decentralized insurance is not a bad idea. I am also using compound, aave, and yearn. Yearn pays the most. I’m an investor in Yearn as well. They have $1B locked in their vaults. Celsius and Blockfi more like $6B each. I wouldn’t mess with Nexo because it’s outside the US.

I predict Coinbase is really going to make waves when they go public. They currently pay 2% on DAI, which is THE decentralized USD stablecoin. The problem is there is a fee to go in and out of DAI. I believe once public Coinbase will offer some yield on USDC, which is fee free, and it could really disrupt banking. As it is in Germany banks are literally telling customers to take deposits elsewhere. If Coinbase offers a publicly traded, safe, 2% even, it could be gangbusters. But for yields, and for my ideological stance, Im very happy with Defi options.
wmvink
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by wmvink »

ohboy! wrote: Tue Mar 02, 2021 12:17 am Cool. I started the other thread on blockfi/celsius. I find Alex Mashinski of Celsius to be an interesting guy. I use both. Using a decentralized insurance is not a bad idea. I am also using compound, aave, and yearn. Yearn pays the most. I’m an investor in Yearn as well. They have $1B locked in their vaults. Celsius and Blockfi more like $6B each. I wouldn’t mess with Nexo because it’s outside the US.

I predict Coinbase is really going to make waves when they go public. They currently pay 2% on DAI, which is THE decentralized USD stablecoin. The problem is there is a fee to go in and out of DAI. I believe once public Coinbase will offer some yield on USDC, which is fee free, and it could really disrupt banking. As it is in Germany banks are literally telling customers to take deposits elsewhere. If Coinbase offers a publicly traded, safe, 2% even, it could be gangbusters. But for yields, and for my ideological stance, Im very happy with Defi options.
But DAI is no safer than USDC or GUSD.... is it? And after the IPO, Coinbase will still not be FDIC insured, so am not sure it will be safer then?
ohboy!
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by ohboy! »

wmvink wrote: Tue Mar 02, 2021 12:25 am
ohboy! wrote: Tue Mar 02, 2021 12:17 am Cool. I started the other thread on blockfi/celsius. I find Alex Mashinski of Celsius to be an interesting guy. I use both. Using a decentralized insurance is not a bad idea. I am also using compound, aave, and yearn. Yearn pays the most. I’m an investor in Yearn as well. They have $1B locked in their vaults. Celsius and Blockfi more like $6B each. I wouldn’t mess with Nexo because it’s outside the US.

I predict Coinbase is really going to make waves when they go public. They currently pay 2% on DAI, which is THE decentralized USD stablecoin. The problem is there is a fee to go in and out of DAI. I believe once public Coinbase will offer some yield on USDC, which is fee free, and it could really disrupt banking. As it is in Germany banks are literally telling customers to take deposits elsewhere. If Coinbase offers a publicly traded, safe, 2% even, it could be gangbusters. But for yields, and for my ideological stance, Im very happy with Defi options.
But DAI is no safer than USDC or GUSD.... is it? And after the IPO, Coinbase will still not be FDIC insured, so am not sure it will be safer then?
I did not say DAI is safer. It is more censorship resistant. It is decentralized. Its quite different than USDC.

Coinbase is the most trusted in the space. As a public company they will have more trust. I never said anything about FDIC insurance. But FDIC insurance is simply an insurance you trust. If JPM Chase lost peoples $250k savings accounts we would have much bigger problems that FDIC cant solve. Lastly, Coinbase dollar funds ARE FDIC insured. USDC is not. But perhaps they can offer the insurance somehow as USDC is physically backed by dollars. It seems to me in every way that Coinbase is poised to blow savings accounts out of the water. It’s a prediction I’m making, not a current offering.
Gadget
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by Gadget »

ohboy! wrote: Tue Mar 02, 2021 8:37 am
wmvink wrote: Tue Mar 02, 2021 12:25 am
ohboy! wrote: Tue Mar 02, 2021 12:17 am Cool. I started the other thread on blockfi/celsius. I find Alex Mashinski of Celsius to be an interesting guy. I use both. Using a decentralized insurance is not a bad idea. I am also using compound, aave, and yearn. Yearn pays the most. I’m an investor in Yearn as well. They have $1B locked in their vaults. Celsius and Blockfi more like $6B each. I wouldn’t mess with Nexo because it’s outside the US.

I predict Coinbase is really going to make waves when they go public. They currently pay 2% on DAI, which is THE decentralized USD stablecoin. The problem is there is a fee to go in and out of DAI. I believe once public Coinbase will offer some yield on USDC, which is fee free, and it could really disrupt banking. As it is in Germany banks are literally telling customers to take deposits elsewhere. If Coinbase offers a publicly traded, safe, 2% even, it could be gangbusters. But for yields, and for my ideological stance, Im very happy with Defi options.
But DAI is no safer than USDC or GUSD.... is it? And after the IPO, Coinbase will still not be FDIC insured, so am not sure it will be safer then?
I did not say DAI is safer. It is more censorship resistant. It is decentralized. Its quite different than USDC.

Coinbase is the most trusted in the space. As a public company they will have more trust. I never said anything about FDIC insurance. But FDIC insurance is simply an insurance you trust. If JPM Chase lost peoples $250k savings accounts we would have much bigger problems that FDIC cant solve. Lastly, Coinbase dollar funds ARE FDIC insured. USDC is not. But perhaps they can offer the insurance somehow as USDC is physically backed by dollars. It seems to me in every way that Coinbase is poised to blow savings accounts out of the water. It’s a prediction I’m making, not a current offering.
I'm excited for the Coinbase direct listing. That is, until institutions and insiders run up the price prior to the direct listing so hard that it will be some ridiculous trillion dollar company by the time peons like us can buy.
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HomerJ
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by HomerJ »

wmvink wrote: Tue Mar 02, 2021 12:25 am
ohboy! wrote: Tue Mar 02, 2021 12:17 am Cool. I started the other thread on blockfi/celsius. I find Alex Mashinski of Celsius to be an interesting guy. I use both. Using a decentralized insurance is not a bad idea. I am also using compound, aave, and yearn. Yearn pays the most. I’m an investor in Yearn as well. They have $1B locked in their vaults. Celsius and Blockfi more like $6B each. I wouldn’t mess with Nexo because it’s outside the US.

I predict Coinbase is really going to make waves when they go public. They currently pay 2% on DAI, which is THE decentralized USD stablecoin. The problem is there is a fee to go in and out of DAI. I believe once public Coinbase will offer some yield on USDC, which is fee free, and it could really disrupt banking. As it is in Germany banks are literally telling customers to take deposits elsewhere. If Coinbase offers a publicly traded, safe, 2% even, it could be gangbusters. But for yields, and for my ideological stance, Im very happy with Defi options.
But DAI is no safer than USDC or GUSD.... is it? And after the IPO, Coinbase will still not be FDIC insured, so am not sure it will be safer then?
It will not be "safe".

You guys need to stop using that word. You may get paid. This could work out. But, it should not be considered safe money. The loss of principal is a real risk.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
SlowMovingInvestor
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by SlowMovingInvestor »

HomerJ wrote: Tue Mar 02, 2021 10:11 am
wmvink wrote: Tue Mar 02, 2021 12:25 am But DAI is no safer than USDC or GUSD.... is it? And after the IPO, Coinbase will still not be FDIC insured, so am not sure it will be safer then?
It will not be "safe".

You guys need to stop using that word. You may get paid. This could work out. But, it should not be considered safe money. The loss of principal is a real risk.
I consider it similar to a low duration junk bond ETF such as SHYG. Better yield than junk bonds. But definitely not a substitute for an FDIC insured account.
SlowMovingInvestor
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by SlowMovingInvestor »

Gadget wrote: Tue Mar 02, 2021 9:14 am
I'm excited for the Coinbase direct listing. That is, until institutions and insiders run up the price prior to the direct listing so hard that it will be some ridiculous trillion dollar company by the time peons like us can buy.
Institutions and insiders may get the initial placements. But they aren't the ones who run up the price after an IPO, it's mostly retail investors who do.

In this case likely crypto investors, who also drive up the price of BTC, ETH and DOGE :twisted:
yosim
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by yosim »

exciting space to be in, rumours of Paypal acquiring a crypto custodial firm

I think blockfi et al have to pay these high rates as they're competing with traditional banks, people need to be incentivised to move their money
parval
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by parval »

dru808 wrote: Mon Mar 01, 2021 8:23 pm
parval wrote: Mon Mar 01, 2021 7:31 pm Just curious why BlockFi over Nexo? I have my BTC on BlockFI, but Nexo gives 10% on stablecoins, thinking of moving my usdc over there but maybe just easier to consolidate and lose the 1.4% :moneybag
Why nexo over Celsius? I’m with Celsius but nexo was a close second. Blockfi while US based is the least transparent, has the lowest apy of the 3, rates are subsidized by vc and they have been hacked. No coins lost, customers info is on the dark/deep web.
O thanks for heads up on Celsius, still new to space and didn't even hear of them.

BlockFi imo is legit DUE to VC, i want to be subsidized by them just like all those free uber/postmates CAC $$

Their hack was a sim attack so honestly just unlucky IMO, you probly already know but here is the details for others https://blockfi.com/wp-content/uploads/ ... -14-20.pdf
yosim
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by yosim »

parval wrote: Tue Mar 02, 2021 1:17 pm
dru808 wrote: Mon Mar 01, 2021 8:23 pm
parval wrote: Mon Mar 01, 2021 7:31 pm Just curious why BlockFi over Nexo? I have my BTC on BlockFI, but Nexo gives 10% on stablecoins, thinking of moving my usdc over there but maybe just easier to consolidate and lose the 1.4% :moneybag
Why nexo over Celsius? I’m with Celsius but nexo was a close second. Blockfi while US based is the least transparent, has the lowest apy of the 3, rates are subsidized by vc and they have been hacked. No coins lost, customers info is on the dark/deep web.
O thanks for heads up on Celsius, still new to space and didn't even hear of them.

BlockFi imo is legit DUE to VC, i want to be subsidized by them just like all those free uber/postmates CAC $$

Their hack was a sim attack so honestly just unlucky IMO, you probly already know but here is the details for others https://blockfi.com/wp-content/uploads/ ... -14-20.pdf
good to know, thanks
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by MBB_Boy »

SlowMovingInvestor wrote: Mon Mar 01, 2021 2:24 pm
wmvink wrote: Mon Mar 01, 2021 1:01 pm This is my first year with BlockFi and I'm holding stablecoins only. But I really don't plan to enter 0 gain/loss transactions. Seems a waste of my time and that of the IRS.
If transactions were automatically downloadable into TT, I wouldn't care. But it seems like BlockFi doesn't have that ability right now.

Which stablecoins do you hold ? BlockFi's default is GUSD, but I wonder if it's because Gemini is an investor. USDC might be safer, but .. it means another annoying transaction (GUSD -> USDC) to track in a spreadsheet.
It also means paying Coinbases fees before transferring to BlockFi. If you want USDC, consider Celsius since they pay more interest in it, helping make up the Coinbase fee
SlowMovingInvestor
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by SlowMovingInvestor »

MBB_Boy wrote: Wed Mar 03, 2021 11:35 am
SlowMovingInvestor wrote: Mon Mar 01, 2021 2:24 pm
wmvink wrote: Mon Mar 01, 2021 1:01 pm This is my first year with BlockFi and I'm holding stablecoins only. But I really don't plan to enter 0 gain/loss transactions. Seems a waste of my time and that of the IRS.
If transactions were automatically downloadable into TT, I wouldn't care. But it seems like BlockFi doesn't have that ability right now.

Which stablecoins do you hold ? BlockFi's default is GUSD, but I wonder if it's because Gemini is an investor. USDC might be safer, but .. it means another annoying transaction (GUSD -> USDC) to track in a spreadsheet.
It also means paying Coinbases fees before transferring to BlockFi. If you want USDC, consider Celsius since they pay more interest in it, helping make up the Coinbase fee
Only if one is using Coinbase, which I don't think the OP is. There are no fees at BlocKFi for depositing crypto (they must be eating gas fees) or for USD transfer via wire/ACH. Or for going from GUSD to USDC or vice versa.

USD transfers in are automatically converted to GUSD. I'm not sure if they assign GUSD from their reserves (which doesn't need a wallet transfer, hence no gas) or whether they transfer the $ to a custodian, who adds the $ to their reserves and creates more GUSD.
waltman300
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by waltman300 »

Okay so the consensus seems to be


Celsius

Blockfi

Nexo



In that order right? Also if you do a stablecoin, would most agree best to do either tether USDT or usdc?


Again why don't people just do these stablecoins as oppose to BTC or ETH or those other altcoins since these stablecoins are pegged to the dollar? Thing is you are getting a flat percentage. But of course ppl say you want to do it with btc or eth because it will only go higher in price. But if say btc is down that year or eth etc... well you earn btc or eth... but your balance is lower. But with stablecoin, you earn flat percentage regardless so its like passive income. Thoughts on this?


Also, have there been cases of hacking while using sites like this? I mean, imagine someone who put 50k worth of btc or eth or stablecoin or more and their account get hacked. Then aren't they going to get screwed since when they request a withdraw to their wallet, that site celsius or blockfi is going to assume well their customer is making a withdraw? Or if its a big amount or certain amount, they need to verify its actually the person who is withdrawing from their account? With all the hacking you hear about with wallets and all these things, i can't assume these sites would video call to confirm someone doing a big withdraw right? Since there are way too many customers? I mean imagine someone want to withdraw 6 or 7 figures and made a request. And say it was a hacker who tried to do this on that person's blockfi or celsius account. Any stories on this and how that is handled?
waltman300
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by waltman300 »

Also earnings on this is taxed at regular income right and not capital gains since this is basically staking so to speak?
gips
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by gips »

wall St journal had an article about this the other day:

https://www.wsj.com/articles/you-can-ea ... 1614959768

“The yields are coming from real counterparty risk,” says Ari Paul, chief investment officer at BlockTower Capital, a digital-asset management firm. By lending your virtual assets to a brokerage, you’re effectively “investing in the debt of a startup,” he says. A single-digit yield may be too low to compensate for that risk
SlowMovingInvestor
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by SlowMovingInvestor »

gips wrote: Sat Mar 06, 2021 6:25 pm wall St journal had an article about this the other day:

https://www.wsj.com/articles/you-can-ea ... 1614959768

“The yields are coming from real counterparty risk,” says Ari Paul, chief investment officer at BlockTower Capital, a digital-asset management firm. By lending your virtual assets to a brokerage, you’re effectively “investing in the debt of a startup,” he says. A single-digit yield may be too low to compensate for that risk
I wouldn't go quite that far since there is collateral for loans, but yes, there is definitely risk. I would consider any investment in these accounts more like a low quality floating rate loan, and would reduce any exposure to high yield debt (specifically short duration high yield debt) by the same amount that I might put in these accounts.
wmvink
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by wmvink »

waltman300 wrote: Sat Mar 06, 2021 6:01 pm Okay so the consensus seems to be

Celsius

Blockfi

Nexo
Consensus seems to be that Nexo is riskiest because they're not very transparent and not headquartered in the US. Also, just 2 days ago they cut most of their interest rates in half without advance notice. If you want the higher rates, you now need to commit to keeping it there for 3 months - similar to a CD at a traditional bank. There's a ton of public backlash about these changes. But in a way, I actually appreciate that they're tightening things up a bit as it suggests they're in it for the long run.
waltman300 wrote: Sat Mar 06, 2021 6:01 pm

In that order right? Also if you do a stablecoin, would most agree best to do either tether USDT or usdc?
USDT has reputation issues. USDC is often recommended as the safer alternative.
waltman300 wrote: Sat Mar 06, 2021 6:01 pm

Again why don't people just do these stablecoins as oppose to BTC or ETH or those other altcoins since these stablecoins are pegged to the dollar? Thing is you are getting a flat percentage. But of course ppl say you want to do it with btc or eth because it will only go higher in price. But if say btc is down that year or eth etc... well you earn btc or eth... but your balance is lower. But with stablecoin, you earn flat percentage regardless so its like passive income. Thoughts on this?
Yes it's passive income exactly like interest in your savings account. The major difference is that it's not FDIC insured. You could lose all your money overnight.
waltman300 wrote: Sat Mar 06, 2021 6:01 pm

Also, have there been cases of hacking while using sites like this? I mean, imagine someone who put 50k worth of btc or eth or stablecoin or more and their account get hacked. Then aren't they going to get screwed since when they request a withdraw to their wallet, that site celsius or blockfi is going to assume well their customer is making a withdraw? Or if its a big amount or certain amount, they need to verify its actually the person who is withdrawing from their account? With all the hacking you hear about with wallets and all these things, i can't assume these sites would video call to confirm someone doing a big withdraw right? Since there are way too many customers? I mean imagine someone want to withdraw 6 or 7 figures and made a request. And say it was a hacker who tried to do this on that person's blockfi or celsius account. Any stories on this and how that is handled?
Some of these companies have safeguards in place that are similar to the safeguards your bank has. For example, BlockFi lets you keep a whitelist of accounts your funds are allowed to be transferred to. Changes to the whitelist take 7 days to process.

But if it's a real hack obviously this won't save you. The company could also go belly up. Remember "not your keys, not your crypto". Not FDIC insured. Risky, but many on this forum find the risk acceptable.
lucha
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by lucha »

If you're holding ETH and wanting to earn interest on it, Coinbase is rolling that feature out soon. Not sure it will be 8.6% (or it may fluctuate depending on how many people use this option) but I feel a lot better about doing it on Coinbase then on any other exchange.
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by dru808 »

wmvink wrote: Sun Mar 07, 2021 12:41 am
waltman300 wrote: Sat Mar 06, 2021 6:01 pm Okay so the consensus seems to be

Celsius

Blockfi

Nexo
Consensus seems to be that Nexo is riskiest because they're not very transparent and not headquartered in the US. Also, just 2 days ago they cut most of their interest rates in half without advance notice. If you want the higher rates, you now need to commit to keeping it there for 3 months - similar to a CD at a traditional bank. There's a ton of public backlash about these changes. But in a way, I actually appreciate that they're tightening things up a bit as it suggests they're in it for the long run.
waltman300 wrote: Sat Mar 06, 2021 6:01 pm

In that order right? Also if you do a stablecoin, would most agree best to do either tether USDT or usdc?
USDT has reputation issues. USDC is often recommended as the safer alternative.
waltman300 wrote: Sat Mar 06, 2021 6:01 pm

Again why don't people just do these stablecoins as oppose to BTC or ETH or those other altcoins since these stablecoins are pegged to the dollar? Thing is you are getting a flat percentage. But of course ppl say you want to do it with btc or eth because it will only go higher in price. But if say btc is down that year or eth etc... well you earn btc or eth... but your balance is lower. But with stablecoin, you earn flat percentage regardless so its like passive income. Thoughts on this?
Yes it's passive income exactly like interest in your savings account. The major difference is that it's not FDIC insured. You could lose all your money overnight.
waltman300 wrote: Sat Mar 06, 2021 6:01 pm

Also, have there been cases of hacking while using sites like this? I mean, imagine someone who put 50k worth of btc or eth or stablecoin or more and their account get hacked. Then aren't they going to get screwed since when they request a withdraw to their wallet, that site celsius or blockfi is going to assume well their customer is making a withdraw? Or if its a big amount or certain amount, they need to verify its actually the person who is withdrawing from their account? With all the hacking you hear about with wallets and all these things, i can't assume these sites would video call to confirm someone doing a big withdraw right? Since there are way too many customers? I mean imagine someone want to withdraw 6 or 7 figures and made a request. And say it was a hacker who tried to do this on that person's blockfi or celsius account. Any stories on this and how that is handled?
Some of these companies have safeguards in place that are similar to the safeguards your bank has. For example, BlockFi lets you keep a whitelist of accounts your funds are allowed to be transferred to. Changes to the whitelist take 7 days to process.

But if it's a real hack obviously this won't save you. The company could also go belly up. Remember "not your keys, not your crypto". Not FDIC insured. Risky, but many on this forum find the risk acceptable.
Wmvink, when I look at the nexo site they are still advertising the 6-8 10-12 rates. Reddit users have captured screenshots verifying what you say. Are they trying to con new customers to sign up at the old rates? Or did a few clients get their rate knocked down?
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dru808
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by dru808 »

waltman300 wrote: Sat Mar 06, 2021 6:21 pm Also earnings on this is taxed at regular income right and not capital gains since this is basically staking so to speak?
Staking and lending are two different things, they may be staking your coins along with lending, But yes, either will be taxed as ordinary income.
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wmvink
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by wmvink »

dru808 wrote: Sun Mar 07, 2021 12:14 pm [Wmvink, when I look at the nexo site they are still advertising the 6-8 10-12 rates. Reddit users have captured screenshots verifying what you say. Are they trying to con new customers to sign up at the old rates? Or did a few clients get their rate knocked down?
I suspect they haven't gotten around to updating the website. A lot of users - myself included - also never received the email announcing the changes. But based on the Reddit chatter I'm pretty sure the changes are across the board and for all of their clients - not just a few.

Their comms around this were a mess and I'm actually surprised the Nexo token didn't take more of a hit. When the changes were announced it briefly lost 9% of its value but recovered pretty quickly.
MBB_Boy
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by MBB_Boy »

SlowMovingInvestor wrote: Wed Mar 03, 2021 3:41 pm
MBB_Boy wrote: Wed Mar 03, 2021 11:35 am
SlowMovingInvestor wrote: Mon Mar 01, 2021 2:24 pm
wmvink wrote: Mon Mar 01, 2021 1:01 pm This is my first year with BlockFi and I'm holding stablecoins only. But I really don't plan to enter 0 gain/loss transactions. Seems a waste of my time and that of the IRS.
If transactions were automatically downloadable into TT, I wouldn't care. But it seems like BlockFi doesn't have that ability right now.

Which stablecoins do you hold ? BlockFi's default is GUSD, but I wonder if it's because Gemini is an investor. USDC might be safer, but .. it means another annoying transaction (GUSD -> USDC) to track in a spreadsheet.
It also means paying Coinbases fees before transferring to BlockFi. If you want USDC, consider Celsius since they pay more interest in it, helping make up the Coinbase fee
Only if one is using Coinbase, which I don't think the OP is. There are no fees at BlocKFi for depositing crypto (they must be eating gas fees) or for USD transfer via wire/ACH. Or for going from GUSD to USDC or vice versa.

USD transfers in are automatically converted to GUSD. I'm not sure if they assign GUSD from their reserves (which doesn't need a wallet transfer, hence no gas) or whether they transfer the $ to a custodian, who adds the $ to their reserves and creates more GUSD.
You have to use them for USDC
dru808
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by dru808 »

MBB_Boy wrote: Tue Mar 09, 2021 11:01 am
SlowMovingInvestor wrote: Wed Mar 03, 2021 3:41 pm
MBB_Boy wrote: Wed Mar 03, 2021 11:35 am
SlowMovingInvestor wrote: Mon Mar 01, 2021 2:24 pm
wmvink wrote: Mon Mar 01, 2021 1:01 pm This is my first year with BlockFi and I'm holding stablecoins only. But I really don't plan to enter 0 gain/loss transactions. Seems a waste of my time and that of the IRS.
If transactions were automatically downloadable into TT, I wouldn't care. But it seems like BlockFi doesn't have that ability right now.

Which stablecoins do you hold ? BlockFi's default is GUSD, but I wonder if it's because Gemini is an investor. USDC might be safer, but .. it means another annoying transaction (GUSD -> USDC) to track in a spreadsheet.
It also means paying Coinbases fees before transferring to BlockFi. If you want USDC, consider Celsius since they pay more interest in it, helping make up the Coinbase fee
Only if one is using Coinbase, which I don't think the OP is. There are no fees at BlocKFi for depositing crypto (they must be eating gas fees) or for USD transfer via wire/ACH. Or for going from GUSD to USDC or vice versa.

USD transfers in are automatically converted to GUSD. I'm not sure if they assign GUSD from their reserves (which doesn't need a wallet transfer, hence no gas) or whether they transfer the $ to a custodian, who adds the $ to their reserves and creates more GUSD.
You have to use them for USDC
Coinbase? You can swap gusd for usdc in blockfi as far as I recall.
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SlowMovingInvestor
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by SlowMovingInvestor »

I see that BlockFi has a bonus offer for deposits in crypto (up to $250) . Link not included because it goes through a partner site.
Tiered bonus levels depending on amount deposited.

Get up to $250 in BTC when you deposit $25 or more in crypto

is the headliner

T&Cs say


To be eligible for the promotion, this must be your first ever deposit in the BlockFi Interest Account,

I'm not sure what that means ? Does it mean that this must be your first BlockFi account (which is very understandable) or that only the first deposit I make into the BlockFi account will count for the bonus ? I.e. if I deposit $1K in crypto and then later deposit $10K in crypto, only the $1K would count ? They do say you have 30 days to fund the account.

And the first deposit has to be crypto, not cash ? A deposit via ACH or wire of cash would invalidate the bonus ?

Even if I were to open an account and make a crypto deposit I would deposit a small sum first, verify it appeared, then do a larger deposit. You don't want a deposit going to the wrong address !
MBB_Boy
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by MBB_Boy »

dru808 wrote: Tue Mar 09, 2021 3:12 pm
MBB_Boy wrote: Tue Mar 09, 2021 11:01 am
SlowMovingInvestor wrote: Wed Mar 03, 2021 3:41 pm
MBB_Boy wrote: Wed Mar 03, 2021 11:35 am
SlowMovingInvestor wrote: Mon Mar 01, 2021 2:24 pm

If transactions were automatically downloadable into TT, I wouldn't care. But it seems like BlockFi doesn't have that ability right now.

Which stablecoins do you hold ? BlockFi's default is GUSD, but I wonder if it's because Gemini is an investor. USDC might be safer, but .. it means another annoying transaction (GUSD -> USDC) to track in a spreadsheet.
It also means paying Coinbases fees before transferring to BlockFi. If you want USDC, consider Celsius since they pay more interest in it, helping make up the Coinbase fee
Only if one is using Coinbase, which I don't think the OP is. There are no fees at BlocKFi for depositing crypto (they must be eAating gas fees) or for USD transfer via wire/ACH. Or for going from GUSD to USDC or vice versa.

USD transfers in are automatically converted to GUSD. I'm not sure if they assign GUSD from their reserves (which doesn't need a wallet transfer, hence no gas) or whether they transfer the $ to a custodian, who adds the $ to their reserves and creates more GUSD.
You have to use them for USDC
Coinbase? You can swap gusd for usdc in blockfi as far as I recall.
Haven't really looked, but then you'd have an exchange, which is a taxable event. Shouldn't matter money wise with a stablecoin, but still generates reporting
dru808
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by dru808 »

MBB_Boy wrote: Wed Mar 10, 2021 3:32 pm
dru808 wrote: Tue Mar 09, 2021 3:12 pm
MBB_Boy wrote: Tue Mar 09, 2021 11:01 am
SlowMovingInvestor wrote: Wed Mar 03, 2021 3:41 pm
MBB_Boy wrote: Wed Mar 03, 2021 11:35 am
It also means paying Coinbases fees before transferring to BlockFi. If you want USDC, consider Celsius since they pay more interest in it, helping make up the Coinbase fee
Only if one is using Coinbase, which I don't think the OP is. There are no fees at BlocKFi for depositing crypto (they must be eAating gas fees) or for USD transfer via wire/ACH. Or for going from GUSD to USDC or vice versa.

USD transfers in are automatically converted to GUSD. I'm not sure if they assign GUSD from their reserves (which doesn't need a wallet transfer, hence no gas) or whether they transfer the $ to a custodian, who adds the $ to their reserves and creates more GUSD.
You have to use them for USDC
Coinbase? You can swap gusd for usdc in blockfi as far as I recall.
Haven't really looked, but then you'd have an exchange, which is a taxable event. Shouldn't matter money wise with a stablecoin, but still generates reporting
What did you mean by “you have to use them for usdc”??
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SlowMovingInvestor
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by SlowMovingInvestor »

MBB_Boy wrote: Wed Mar 10, 2021 3:32 pm
dru808 wrote: Tue Mar 09, 2021 3:12 pm
Coinbase? You can swap gusd for usdc in blockfi as far as I recall.
Haven't really looked, but then you'd have an exchange, which is a taxable event. Shouldn't matter money wise with a stablecoin, but still generates reporting
Yes, you can. it will generate a 0 gain taxable event. But then so will any redemption into $. So not a big deal.

I wish BlockFi would allow users to choose the stablecoin they want to use. I suspect their ties with Gemini make it easier for them to handle GUSD, even without a gas fee.
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DWesterb2iz2
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by DWesterb2iz2 »

I have a small BlockFi acct with Ethereum. I will say:

1) The platform trades 24/7, so you can check it (or trade it) any time of any day or night. So it easily becomes a habit and not one that buy hold investors wisely cultivate.

2) In the time I’ve owned (half a coin of) Ethereum it’s been very volatile, moving mostly up by quite a bit. This makes me feel brilliant, which is pleasant and not true.

3) The rise also makes other investments feel really dull.

None of this is likely helpful to the long term investor’s education or success.
SlowMovingInvestor
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by SlowMovingInvestor »

DWesterb2iz2 wrote: Thu Mar 11, 2021 4:57 pm I have a small BlockFi acct with Ethereum. I will say:

1) The platform trades 24/7, so you can check it (or trade it) any time of any day or night. So it easily becomes a habit and not one that buy hold investors wisely cultivate.
I don't think of BlockFi as a trading platform, although of course you can use it for trading (but as mentioned earlier in the thread, it's spreads are higher because it's acting as a market maker, not as an exchange). I think of it as a way to earn some interest on speculative assets. Even stablecoins earning interest here should be considered to be the equivalent of mutual funds like FFRHX (Fidelity's low quality floating rate fund).

My impression is that ether interest rates on BlockFi are low. I'm not sure if staking is a better way to get interest on Ether.
disguisedbb
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by disguisedbb »

This is an excellent review on various crypto lending platforms

https://prohashing.com/guides/earning-i ... currencies

Personally I only recommend BlockFi and Celsius

Depend on your risk tolerance, you can put 5-10% of your crypto there.

My plan to earn passive income while retired without having to sell my crypto to avoid tax
bberris
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by bberris »

According to this post,

https://news.bitcoin.com/dropping-gbtc- ... btc-trust/

Blockfi paying 6 % can only be profitable when GBTC is at a premium of 8 % or more. The discount is 7 % now. The thesis is that Blockfi buys bitcoin and exchanges for GBTC. Then they sell GBTC after the mandatory hold period to reap the premium, and pay the management fee of 2 %.

Of course, bitcoin always goes up, so the rising price of bitcoin itself bails out the falling premium of GBTC.
dru808
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by dru808 »

bberris wrote: Sat Mar 13, 2021 10:35 am According to this post,

https://news.bitcoin.com/dropping-gbtc- ... btc-trust/

Blockfi paying 6 % can only be profitable when GBTC is at a premium of 8 % or more. The discount is 7 % now. The thesis is that Blockfi buys bitcoin and exchanges for GBTC. Then they sell GBTC after the mandatory hold period to reap the premium, and pay the management fee of 2 %.

Of course, bitcoin always goes up, so the rising price of bitcoin itself bails out the falling premium of GBTC.
I was going to post this but thought it might be competitor fud. Can’t seem to find more about it.
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SlowMovingInvestor
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by SlowMovingInvestor »

bberris wrote: Sat Mar 13, 2021 10:35 am According to this post,

https://news.bitcoin.com/dropping-gbtc- ... btc-trust/

Blockfi paying 6 % can only be profitable when GBTC is at a premium of 8 % or more. The discount is 7 % now. The thesis is that Blockfi buys bitcoin and exchanges for GBTC. Then they sell GBTC after the mandatory hold period to reap the premium, and pay the management fee of 2 %.

Of course, bitcoin always goes up, so the rising price of bitcoin itself bails out the falling premium of GBTC.
It's not surprising that BlockFi is lending to crypto trading firms or doing it's own trading. It seems like a a lot of crypto deposit firms do exactly that (*). AAVE has a specific feature called flash loans, which seems to be for just that purpose. Indeed, I've posted before that a premium for GBTC seems like an opportunity for arbitrage, so I'm glad they're doing it.

The article also mentions that BlockFi wouldn't be bailed out by the Feds if it had solvency issues. That should not be news to anybody depositing with any crypto firm ! This is not a place for an EF. This Is a place that could be used to replace high yield, low quality debt in one's AA.

(*) Indeed, it's one of my major issues with crypto, too many apps and flows are just internal, such as cryptocoins going to buy NFTs or loans of crypto going to fund crypto trading or arbitrage. Or almost all major new cryptocoins (except Ripple) working to fix problems and issues with blockchains (Ether in particular).
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Re: BlockFi Interest Account (8.6% APY) with Stablecoin

Post by cogito »

dru808 wrote: Sat Mar 13, 2021 12:33 pm
bberris wrote: Sat Mar 13, 2021 10:35 am According to this post,

https://news.bitcoin.com/dropping-gbtc- ... btc-trust/

Blockfi paying 6 % can only be profitable when GBTC is at a premium of 8 % or more. The discount is 7 % now. The thesis is that Blockfi buys bitcoin and exchanges for GBTC. Then they sell GBTC after the mandatory hold period to reap the premium, and pay the management fee of 2 %.

Of course, bitcoin always goes up, so the rising price of bitcoin itself bails out the falling premium of GBTC.
I was going to post this but thought it might be competitor fud. Can’t seem to find more about it.
Zac Prince, their CEO has responded in a couple locations. Up to you whether or not you believe him, but the general response is that the GBTC trade was a small portion of their revenue, and they size all their risk/positions appropriately. I have about 25k with BlockFi now, follow most of their social media, and they seem to have a very good handle on what they're doing. They'd like to IPO and the chances of funny business behind the scenes is pretty low if you ask me.

https://onthebrink-podcast.com/zac-prince-blockfi-2/

They just finished a series D round, and I assume the 350M they raised was given to them by smart people who have a pretty good idea as to what BlockFi's portfolio looks like.
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