By: Alex Dabek

Last Updated: Mar 31, 2021

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BlockFi is a finance app that lets you earn interest on your crypto without having to stake it or lock it up.

If you've looked at high interest savings accounts at traditional banks, the rates are laughable. BlockFi is trying to fix that and they let you earn up to 8.6% interest on your coins.

I was skeptical at first because there are risks. However, an 8.6% interest rate was worth exploring so I started testing it. This BlockFi review shares my research, personal experience, and if the risk is worth the reward.


BlockFi Overview




Up to 8.6%

Monthly Fees:


Min. Deposit:



Get up to $250 when you deposit crypto

BlockFi Interest Accounts

BlockFi Review start earning interest

BlockFi lets you earn up to 8.6% interest per year on various cryptocurrencies like Bitcoin (6%), Ethereum (5.25%), Litecoin (6.5%), USDC (8.6%), and more.

The interest gets automatically deposited into your account on the first of every month. Your crypto is not locked up either, it's like a savings account. You can withdraw your funds and BlockFi allows 1 free withdrawal per month.

How Do They Pay So Much Interest?

BlockFi is able to pay high interests because they are charging even more lending out the funds. They make loans to large institutional clients as well as retail customers and share the profits with you.

They have a process to keep funds safe. One way they do that is to overcollateralize the loans. For example, to get a loan of $10,000 you must put $15,000 worth of Bitcoin which protects the lenders.

Pros & Cons

  • Up to 8.6% passive income on your crypto 
  • Get paid on the first of every month
  • Earn with any amount, no minimum balances
  • Regulated company that's backed by Coinbase, Fidelity, and more
  • No staking or lockups required
  • Not as safe as cold storage
  • Risk of bankruptcy, cyber attacks, etc 
  • They make it time consuming to withdraw
  • They don't have every coin
  • Lower rates than some competitors
  • Your funds are not insured like at a traditional bank

What Are The Risks?

Passive income and 8.6% interest sound great, but the main question is can you trust BlockFi with your crypto? 

The main risk with BlockFi is that it's a centralized company so it can't be 100% safe. You are trusting that they will not run with your money, go bankrupt, get hacked, and more. Let's look at these main risks:

  • Your funds aren't insured
  • Bankruptcy risk
  • Cyber attacks
  • Disappearing
  • Extreme market conditions 
  • They can disable withdrawals

It's impossible to predict the odds of these risks occurring but they are legitimate concerns. Interestingly enough, most of these risks are the same with your traditional banks as well. Now, let's look at what BlockFi does to counteract these risks.

Is BlockFi Trustworthy?

Let's take a look at why BlockFi might be trustworthy: 

  • Overcollateralized loans - Almost all loans on BlockFi are overcollateralized which protects the lenders. This means to borrow $10,000 USD, you must deposit the equivalent of $15,000 worth of Bitcoin or something similar. If the price of the collateral drops, you'll receive a margin call.
  • Black Thursday performance - BlockFi has been tested in the past during the massive market crash in March 2020 and they survived. If they were being mismanaged or overleveraged the outcome could have been very different.
  • They are well funded -  If needed, BlockFi can likely raise money at any time. They've raised over $450 million in venture capital over the years. It's also from some trusted names like Coinbase, Morgan Creek Digital, Fidelity and more which are useful partnerships.
  • Regulated and licensed company - BlockFi has many licenses and appears to do everything by the books. They have also said they plan to go public one day which would add even more legitimacy if it happens.
  • Cold storage policy - BlockFi stores clients funds on Gemini's cold storage, who has over $20 billion under custody with many institutional clients such as Wealthsimple, 3iQ, and more.  

Ultimately, there's no definitive answer. BlockFi's trustworthiness is subjective so it must be looked at like any other investment. Do you believe BlockFi's claims, is the risk/reward worth it and what's your risk tolerance?

Where BlockFi Shines

Passive Income - Deposit your crypto, sit back, and let the income roll in every month.

It's Simple - Anyone can get started because it's beginner-friendly and there are no minimum balances required.

Good Reputation - As far a crypto companies go, BlockFi has a great reputation so far. It's been around for a while, they've weathered the March 2020 meltdown, and it's well funded by big names like Coinbase, Fidelity, and more.

Where BlockFi Falls Short

Slow Withdrawals - You can withdraw your funds for free but BlockFi purposefully makes it a slow process. It can take 1-3 business days to go through the verification process.

Third Party Risk - It will never be as safe as cold storage. You have to weigh the pros and cons and decide for yourself how much risk you're willing to take on - if any. 

So... Is BlockFi A Good Idea?

BlockFi is like any other investment so you need to weigh the risks and rewards based on your personal risk tolerance. On one hand, you can put your unused crypto to work and earn up to 8.6% interest. On the other hand, BlockFi is a centralized company.

For me, the answer lies somewhere in the middle. I would never put 100% of my holdings in BlockFi but I have allocated a small piece of my portfolio. The longer I've used it, the more comfortable I've become.

Luckily, there are no account minimums so you can decide exactly how much to allocate - whether it's 0% or something higher. At the end of the day, always do you your own research to make an informed decision and hopefully this reviewed gave you some helpful info.

  • Earn up to 8.6% APY
  • Start earning on day one
  • Get up to a $250 deposit bonus

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