Although this isn’t bad, there are crypto exchanges that offer quite a bit more. It’s also worth mentioning that several of the cryptocurrencies on BlockFi are U.S. dollar stablecoins. Since these are designed to maintain a value of $1, they all serve basically the same purpose. The most frustrating drawback of BlockFi is that it charges crypto withdrawal fees.
It’s free to send money via ACH or wire transfer, or investors can connect their bank account. In many cases, it’s still lower than Coinbase fees but more expensive than Coinbase Pro. Some users prefer to purchase crypto on another exchange, such as Binance, then transfer the funds to BlockFi to take advantage of the interest-bearing accounts. BlockFi offers a crypto exchange where you can buy Bitcoin (BTC) and other digital currencies. It also has a crypto credit card and crypto-backed loans available, so there are a variety of services on this platform. Unfortunately, one of its best products, its interest-bearing crypto accounts, is no longer available to U.S. investors.
These normally have an LTV ratio of 50% or less, meaning the collateral is worth at least twice as much as the loan. And if the value of the collateral drops, the borrower is required to add more, or BlockFi can liquidate their position. We’ve found one company that’s positioned itself perfectly as a long-term picks-and-shovels solution for the broader crypto market — Bitcoin, Dogecoin, and all the others. In fact, you’ve probably used this company’s technology in the past few days, even if you’ve never had an account or even heard of the company before. If you just want to buy a couple of the biggest cryptocurrencies, you can do that on BlockFi. But if you want access to a variety of digital assets, you’re better off with a different platform.
- Coinbase charges a spread of about 0.50% plus a fee based on factors such as your location or payment method.
- Doing so requires investors to enter their unique BlockFi wallet address into the destination box after initiating a transfer.
- Unfortunately, BlockFi Interest Accounts are no longer available to U.S. investors due to an order by the SEC.
- This is helpful if you’re dollar-cost averaging, which is a good way to manage risk when investing in crypto.
- For instance, if you buy $199 of bitcoin using deposited funds, you’ll pay a flat fee of $2.99, whereas if you pay by debit card, you’ll pay the variable fee of 2%.
This is due, in part, to its large knowledge base, including tips and tutorials. Most people will find the platform intuitive and easy to use. Coinbase and BlockFi use 2FA, a password, and device confirmation.
Users can opt for whitelisting, also known as allowlisting, to further protect their funds. But, investors don’t have control over their private keys on either platform. Coinbase manages your keys, whereas BlockFi’s custodian, Gemini, handles your keys. BlockFI Interest Accounts (BIAs) are no longer offered to new clients who are U.S. persons or persons located in the United States. Existing clients that are U.S. persons or located in the United States will be unable to transfer new assets to their BIAs. Unlike traditional brokerage firms, cryptocurrency exchanges are not members of the Securities Investor Protection Corp. (SIPC).
Loan rates and fees
However, its selection and trading features are lacking compared to other exchanges. Coinbase also offers a native coin, USD Coin (USDC), and users can earn rewards of 0.15% APY for holding it. Furthermore, both BlockFi and Coinbase support institutional or business users. Investing in cryptocurrencies, Decentralized Finance (DeFi), and other Initial Coin Offerings (ICOs) is highly risky and speculative, and the markets can be extremely volatile. Consult with a qualified professional before making any financial decisions. This article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies nor can the accuracy or timeliness of the information be guaranteed.
BlockFi and Coinbase are crypto exchange platforms, meaning investors can buy and sell cryptocurrencies. Coinbase users have more chances to earn crypto, join a waitlist for a Bitcoin rewards Visa card, and use business services. BlockFi products include savings accounts that earn interest and a waitlist for a Visa debit card. People tend to use BlockFi to store crypto and earn interest, whereas they use Coinbase to buy crypto. BlockFi and Coinbase are well-known, trusted cryptocurrency exchanges.
Despite these safeguards, BlockFi lost approximately $80 million in 2022 when one of its large clients, Three Arrows Capital (3AC), failed to increase its loan collateral. Due to that and a bear market, BlockFi faced financial instability and had to sign a deal with the FTX exchange. FTX agreed to extend BlockFi a $400 million line of credit and also has the option to buy BlockFi as part of the agreement. Some investors prefer to store crypto in their own crypto wallets for added security instead of leaving it on a platform like BlockFi.
Our top crypto play isn’t a token – Here’s why
We offer best-in-class client service and support, plus leading protection measures to ensure your peace of mind. Amilcar has 10 years of FinTech, blockchain, and crypto startup experience and advises financial institutions, governments, regulators, and startups. Unfortunately, BlockFi Interest Accounts are no longer available to U.S. investors due to an order by the SEC. BlockFi has built a best-in-class compliance program to safeguard your assets.
Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team. The margin is around 1% on average, but may be higher if liquidity is low on that cryptocurrency. However, the Coinbase Pro platform charges a spread of about 0.50% and a maker-taker fee ranging from 0% to 0.50% (maker) and 0.04% to 0.50% (taker). We independently evaluate all recommended products and services. If you click on links we provide, we may receive compensation. A crypto-backed loan has advantages over selling your holdings.
How Do BlockFi and Coinbase Work?
Once users deposit crypto, it automatically starts earning interest. In terms of security, BlockFi’s protections are similar to other top exchanges. It offers two-factor authentication (2FA), which requires two forms of authentication to access an account. It also offers a feature it calls allowlisting (also often referred to as whitelisting), where you can restrict withdrawals to known addresses you’ve put on your allowlist. BlockFi has high security standards, but the fact that it offers crypto-backed loans is a risk during periods of market volatility. To evaluate how safe BlockFi is, we’ll look first at its security features, and then the potential risks of its lending program.
- The companies differ significantly in the cost of investing, the number of supported cryptocurrencies, and the products offered.
- On Coinbase, investors can use Automated Clearing House Network (ACH), wire transfer, or PayPal to purchase crypto.
- Since the lender continues to limit activity across its platform, we do not recommend using this product at this time.
- BlockFI Interest Accounts (BIAs) are no longer offered to new clients who are U.S. persons or persons located in the United States.
- It offers two-factor authentication (2FA), which requires two forms of authentication to access an account.
The mobile apps let users access their accounts and trade crypto. Since the companies focus on beginners, you won’t find advanced charting or profit and loss information. Instead, the apps are straightforward and allow users to buy or sell from their cell phones.
BlockFi vs. Coinbase: Features
Doing so requires investors to enter their unique BlockFi wallet address into the destination box after initiating a transfer. Likewise, users can also send funds from BlockFi to their Coinbase wallet. Typically, investors transfer coins to BlockFi to take advantage of interest-bearing accounts. On Nov. 28, 2022, BlockFi voluntarily filed for Chapter 11 bankruptcy after suspending withdrawals from the platform earlier in the month. BlockFi’s bankruptcy filing is related to the collapse of FTX, a separate crypto exchange.
In comparison, Coinbase focuses on crypto exchange and brokerage services. Although BlockFi and Coinbase are good options for beginners, there are distinct use cases. BlockFi provides a complete, all-in-one financial services platform, offering loans and financial advice. Many BlockFi users transfer crypto from other platforms to their BlockFi accounts to take advantage of interest-bearing accounts. Therefore, BlockFi is better for users wanting to hold onto their crypto instead of regularly buying or selling. Both exchanges provide mobile apps for iOS and Android devices.
Is your cryptocurrency safe with BlockFi?
BlockFi is a web platform and mobile app where you can buy, sell, and trade cryptocurrencies. You can fund your BlockFi account with an ACH transfer from a bank account, a wire transfer, or a cryptocurrency deposit. First-time investors will find the mobile apps and the website easy to navigate. Instead of offering resources geared toward crypto learning, BlockFi offers advice about buying a car, paying crypto taxes, or understanding loan terms.
The Federal Deposit Insurance Corporation (FDIC) insures Coinbase cash balances. Securities offered through Robinhood Financial LLC and Robinhood Securities LLC, which are members of FINRA and SIPC. One of the main dangers for BlockFi is that it accepts cryptocurrency as collateral for cash loans.