How to Earn 4.5% Interest on Bitcoin With BlockFi

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Contributor, Benzinga
September 21, 2021

BlockFi is a digital asset management platform that allows you to leverage your cryptocurrency and use it in several ways. BlockFi brings security and market-leading interest earning options to the crypto space that traditional investors have enjoyed for decades. 

When you deposit your crypto into BlockFi, you have the opportunity to earn interest on or spend your crypto. You can also buy and sell crypto without fees or any minimum balance required on the platform. BlockFi provides financial services not only to individuals but also to corporations globally.

Disclosure: ²Sum of median estimated savings and rewards earned, per user in 2021 across multiple Coinbase programs (excluding sweepstakes). This amount includes fee waivers from Coinbase One (excluding the subscription cost), rewards from Coinbase Card, and staking rewards. ³Crypto rewards is an optional Coinbase offer. Upon purchase of USDC, you will be automatically opted in to rewards. If you’d like to opt out or learn more about rewards, you can click here. The rewards rate is subject to change and can vary by region. Customers will be able to see the latest applicable rates directly within their accounts.
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securely through BlockFi's website

What is BlockFi?

Established in 2017 by Zac Prince and Flori Marquez, BlockFi is engineered to provide credit services to underserved markets that want exposure to the volatility of the crypto space. BlockFi separates itself from its competition by offering excellent interest rates combined with robust security for your digital assets. 

In 2021, the overall crypto market cap has hit all-time highs of over $2 trillion. This has caused an explosion in BlockFi’s popularity and demand for its services. The company claims to now have over $10 billion in assets and more than 450,000 retail clients. This rapidly growing platform becoming an alternative banking system is cause for alarm to some state and federal regulators.

Cryptocurrency Interest & Regulation

Banking regulators and the Federal Reserve have been racing to keep up with the next generation of decentralized finance (DeFi) technology. Government officials are worried that the technology is moving so fast that it can become vulnerable to hackers and fraud. BlockFi itself has already faced accusations of violating local securities laws in 5 states. These next-level financial instruments can provide most of the same services that traditional institutions can. However, these technologies are devoid of consumer protections like Federal Deposit Insurance Corporation Insurance (FDIC).

BlockFi is the only sovereign lender receiving backing from institutional investors like Fidelity, Susquehanna, Coinbase Ventures and Galaxy Digital despite regulator concerns. The BlockFi team has decades of experience ranging from legacy finance to the crypto world.

In addition, its primary digital asset custodian is regulated by the New York State Department of Financial Services. In bridging the traditional and decentralized finance systems, BlockFi has always prioritized the security of assets. BlockFi continues to expand its security program across multiple layers, focusing on proactive risk management and increasing its involvement with regulators, serving as a leader in the crypto space.

How Does Earning Interest on Crypto Work?

You can earn interest on the platform because BlockFi also charges interest on its loans to consumers. When you deposit your crypto into the BlockFi platform, you’re sending it to one of their secure and regulated custodians, like Gemini. At that point, BlockFi can lend cryptocurrency to multiple institutions like Fidelity Investments or Susquehanna. The institutions then use those assets to make gains from arbitrage transactions. 

Because BlockFi is not an actual bank, it doesn't have the overhead costs of maintaining capital reserves and bank regulations. To generate revenue, BlockFi purchases regulated equities, futures and lends crypto assets.

BlockFi Overview

BlockFi offers interest-earning accounts, low-cost loans secured with crypto and fee-free trading. BlockFi has excellent interest rates, flexible structures and a high degree of security available on their crypto lending ecosystem.

Some of BlockFi’s key features and benefits:

Simple account management: Once your funds are deposited, BlockFi provides complete transparency and control over the assets in your account.

Mobile app: The BlockFi app gives you full access to your digital asset holdings from any smart device. The mobile app allows users to fund their BlockFi account using their crypto wallet or bank account.

Flexible payments: BlockFi allows users to choose the cryptocurrency in which they receive interest payments.

Outstanding security: The BlockFi platform supports 2-factor authentication and other layers of security to protect your account. In addition, your money is held with its regulated custodian Gemini when you deposit your funds on the platform.

No hidden fees or minimum balances: The platform does not charge any hidden fees or require you to maintain a minimum balance.

Interest Rates on BlockFi

The two most reputable platforms offering cryptocurrency interest accounts are BlockFi and the Celsius Network. Since Celsius and BlockFi take custody of your digital assets, they are centralized companies that use decentralized assets. So, they are referred to as centralized finance (CeFi). Their interest-earning accounts are different from savings accounts because they come with the risk that neither your principal nor your interest is guaranteed.

Let’s compare some of the interest rates on each platform:


  • 4.5% on 0 to 0.1 BTC, 1% between 0.1 to 0.35 BTC and 0.1% on any amount over 0.35 BTC
  • 5% on 0 to 1.5 ETH, 1.5% between 1.5 to 50 ETH and 0.25% on any amount over 50 ETH
  • 8% on 0 to 40,000 USDC and 5% on any amount over 40,000 USDC


  • 6.2% for the first BTC and then 3.51% for any amount over 1 BTC
  • 5.35% for the first 100 ETH and then 5.05% for any amount over 100 ETH
  • 8.8% for USDC

How to Earn Interest on BlockFi

The BlockFi Interest Account (BIA) allows you to earn market-leading interest after depositing your crypto into your account. You get paid compounding interest monthly when you store crypto on BlockFi. After you fund your account, your interest begins accruing the next day, and your payments go out by the last business day of each month.

Step 1: Open an online account.

To get started, visit BlockFi’s signup page or download the BlockFi mobile app. You will need to enter your name, email address and password. Most lending platforms will ask you to complete the KYC process (Know Your Customer) by verifying your information and providing proof of identity. Then you will need to deposit funds into your account using crypto or your bank account. You can start earning interest after your funds are deposited in your account. As long as users are over 18 years old, they can register an account using BlockFi’s easy-to-use interface.

Step 2: Purchase cryptocurrency.

Use funds from your BlockFi Interest Account to purchase cryptocurrency on BlockFi’s exchange fee-free. Your daily trading limit will depend on your account size and your amount of activity. To make a trade, log into your BlockFi account, enter the buy or sell amount, currencies, and authorize the transaction.

Step 3: Earn interest on your crypto.

The interest earned on your BIA compounds monthly. Therefore, if you earn interest in the first month, your next payment will be calculated using your new balance (old balance plus interest). Your profits will begin accruing the day after you fund your account and pay at the month’s end. BlockFi doesn’t require a minimum balance to start your BIA. Additionally, there are no withdrawal restrictions so that you can withdraw at any time.

Risks of Earning Interest on Crypto

When you own an inherently volatile digital asset it already incurs risk. In addition, the earnings paid by BlockFi are also cryptocurrencies. If token prices make a harsh correction to the downside, the profits you accumulated could be lost. 

Remember that when you lend your crypto to BlockFi’s regulated custodian, your funds still don’t have the protection of being insured by the FDIC. With this in mind, a best practice would be never to risk what you can’t afford to lose.

Is Earning Interest on Cryptocurrency Worth It?

One of the most significant advantages of earning interest on your cryptocurrency is the high rate of return. Traditional savings accounts generally offer lower interest rates around 0.5%. They can’t compete with BlockFi’s high-yielding interest accounts that provide a 4%  to  8% interest rate. 

In addition to the interest you earn, you also get the satisfaction of the appreciation of your crypto asset. BlockFi also has no minimum lock-up periods so that you can withdraw your funds at any time. Earning interest on your crypto can be a superb way to increase your yields.

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