- BlockFi is raising its interest rates on BTC, ETH and stablecoins.
- The company claims that the rate hike has been made possible by its effective risk management strategies, dwindling market competition and changing macroeconomic yield conditions.
- The announcement comes three days after BlockFi secured a $250 million loan from FTX to “bolster” its balance sheet.
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BlockFi is increasing yields on its bitcoin, ethereum and stablecoin lending products, three days after FTX raised a $250 million revolving line of credit to the company.
Powers of “Effective Risk Management”
BlockFi will soon increase the interest rates on its loan products.
according to his official twitter accountThe crypto lending company will increase its rates across all levels for Bitcoin, Ethereum and major stablecoins such as USDC, USDT, GUSD, PAX and BUSD.
Yields on Bitcoin will rise from 0.5% to 1.9%, Ethereum from 0.5% to 1.75%, and stablecoins from 0.5% to 3%. This brings the rates of bitcoin and ethereum between 2% and 3.5% and stablecoins between 6% and 8.75%. The increase will be effective from early July.
The company will also reduce its withdrawal fees by $1 for bitcoin, $2 for ethereum, and $25 for stable coins; On the other hand, it will remove its “one free withdrawal per month” policy altogether.
BlockFi said it has been able to raise interest rates due to effective risk management, reduced market competition and the changing environment of macroeconomic yields. For example, it indicates that it has never had exposure to UST or STETH, adding that “due to increased volatility in the crypto market in May and June 2022, BlockFi was one of the first people to hedge our credit and market risk exposure.” was one of them.”
The announcement did not specifically mention the company’s $250 million in debt. Received Just three days before crypto exchange FTX. The loan was extended to “enhance” the firm’s balance sheet and the strength of the platform.
the company has previously fired from job 20% of its workforce and destroyed Loan given to leading crypto hedge fund Three Arrows Capital. A leaked financial statement also shows that BlockFi has lost over $285 million in the past two years. While its authenticity has not been confirmed, the document corroborates rumors about the firm’s financial struggles.
Disclosure: At the time of writing, the author of this article owns ETH and several other cryptocurrencies.