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Disclaimer: Nothing in this report constitutes investment advice—I am just reporting on my accounts and its progress on each platform. You should not use this report to make financial decisions. I recommend you seek professional advice from someone who is authorized to provide investment advice.
Hey everyone and welcome to the HODLer’s Den!
Here you will find information on my crypto investment portfolio straight from a HODLer’s perspective. This section will focus on HODLing cryptos and interest-earning platforms.
BlockFi
Updates
Update to BlockFi Interest Account (BIA) Rates
With September 2021, comes changes to the BIA.
According to BlockFi, the updated interest rates should boost APY (annual percentage yield) for roughly 75% of BlockFi clients.
You can track the new rates using the Interest Rate Tracker by clicking here.
While BlockFi did increase the rates across Tier 1, the amount of assets that these rates apply to have drastically decreased to compensate.
If you have a small amount of assets with BlockFi, you will enjoy better earnings, but if you exceed the amounts listed in Tier 1 then you should consider moving funds elsewhere for better yields.
I have moved my excess Bitcoin (BTC) over to Ledn to earn 6.1% APR on my first two BTC and 2.25% for the rest.
Please use this link for Ledn to earn 25 USDC signup bonus. Ledn currently only accepts BTC and USDC, but the APRs are very lucrative.
Why Choose BlockFi?
Despite the decrease in APRs and asset amounts in the lower tiers for BIA, BlockFi is still a decent choice for many users.
BlockFi has plenty of equity funding and is backed by companies such as Valar Ventures, Morgan Creek Capital, CMT Digital, Castle Island Ventures, Winklevoss Capital, and Three Arrows Capital.
BlockFi remains one of the few retail-focused interest-earning platforms that is also domiciled in the United States, regulated under US law, and that is also institutionally backed and does not have a utility token.
BlockFi claims to have “robust” security but I feel like this is a grey area as they have had hiccups in the past and the recent incident that sent 700 BTC by mistake.
Credit Limit Increases for BlockFi Rewards Visa Signature Credit Cardholders
The previous credit limit was 10,000 USD, but now qualified users can have a maximum credit limit of 25,000 USD.
Automatically increasing credit limits can benefit eligible BlockFi cardholders in two ways.
First, cardholders who are eligible will have more flexibility when it comes to their purchasing power.
This will enable them to use the card for bigger purchases and earn more rewards.
Second, increasing credit limits can help lower credit utilization, which can help improve credit scores.
I have been using my BlockFi card frequently over my Crypto.com card because I want to take advantage of the introductory 3.5% cash back in BTC for the first 3 months before it drops to 1.5%.
The First Rewards Payday for the BlockFi Rewards Credit Card
On August 13th, 2021, I got my first BTC rewards payout.
I will get a better understanding on my rewards during the next redemption occurs because 2.72 USD cash back in BTC does not look right.
I am not a big spender, but my first month’s statement was a little over 330 USD spent and 3.5% on 330 USD should be 11.55 USD. Also BTC is up in price month to month so it does not match.
Interest Earned
It has been 4 weeks since the last BlockFi report and during that time my portfolio gained roughly 2000 USD in total interest paid. I track my progress with each lending platform using a Google Spreadsheet.
Bitcoin (BTC) is currently at 49.8k USD while Ethereum (ETH) is at 3897 USD. Both of these assets make a majority of my BlockFi portfolio and it is clearly reflected in my portfolio. Both of these assets have rallied recently and they both have a strong impact on my interest earnings.
However, as a HODLer I can usually ignore market fluctuations and continue to accumulate and compound my earnings.
Conclusion & Prospect
BlockFi is a good platform for beginners with little assets which allows you to maximize the best APRs across Tier 1. Once users exceed Tier 1, the rates drop significantly. The recent changes look good but if you do the math and look at it in detail, it is an actual decrease across the entire BIA.
For example, BTC had a previous APR of 4% for up to 0.25 BTC, and the new Tier 1 is 4.5% for 0.1 BTC. If you multiply APR by the asset limit you get a better picture of earning potential. So (4%)*(0.25BTC)=1, and (4.5%)*(0.1)=0.45. Basically, your earning potential dropped over 50% if you continue to use BlockFi even with Tier 1.
This is why I suggest you move assets to other platforms once you fulfill the requirements for Tier 1. Tier 3 is starting to look similar to what banks offer, which is 0.1% APR, but they consider this as a “high APR” savings account.
The BlockFi credit card is a welcome addition because it is the first of its kind. We have plenty of options for crypto debit cards, but the BlockFi card is the first to offer a credit card with crypto cash back—in this case, cash back in BTC.
I hope they consider keeping the 3.5% cash back in BTC rate instead of it being an introductory offer. They can somehow tie it to how much assets you have locked up and create a tier system for cash back rewards. For example, if you have 10,000 USD worth of assets in the BIA, you earn 1% cash back, and the more assets would unlock better cash back rewards at a specified tier. This would bring in more assets and balance out the current low BIA rates.
I prefer using a credit card because it is more secure than a debit card. I can easily dispute transactions and I have more time to pay off the card. A debit card is instant money out of my account while a credit card allows me to delay payment and utilize that extra time to collect earnings on my assets.
BlockFi currently has the advantage of being the only platform to have a crypto cash back credit card. Celsius Network is releasing its own relatively soon according to the weekly AMAs. The BlockFi credit card has replaced my Citi Double Cash credit card. Even though I will be earning only 1.5% on my BlockFi card, versus 2% on my Citi card, the cash back in BTC is probably better in the long run. It is also an easy way to dollar cost average into BTC.
What I Am Doing
This section is dedicated to paid subscribers as I will go into details of what moves I am making with my interest-earning portfolios.
You are currently reading the Free Version. If you would like more information, please consider switching to a paid subscription.
Each week I will report on a different interest-earning platform that I use—mainly, Celsius Network, Bitrue, Crypto.com, and BlockFi.
If you are new to crypto or have considered joining new platforms, check out the Starter Pack created by CryptoOneStop by clicking here or if you want to earn over 250 USD in referral bonuses then click here.