RATE Group | BlockFi Raises Deposit Rates as Bitcoin Crash Juices Loan Demand
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BlockFi Raises Deposit Rates as Bitcoin Crash Juices Loan Demand

18 Mar BlockFi Raises Deposit Rates as Bitcoin Crash Juices Loan Demand

Posted at 00:38h in Bitcoin News by

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An increase in borrower demand is driving crypto lender BlockFi to raise interest rates for bitcoin (BTC) and ether (ETH) deposits on April 1, said CEO Zac Prince.

The second-largest price drop in bitcoin’s history last Thursday created a gulf between prices on the bitcoin futures and spot markets. In the following days, BlockFi saw a 10x increase on the trading side of the house, and a surge in loan demand from its two largest client pools: market makers and proprietary trading firms.

Institutional borrowing across all assets made up for a decrease in retail U.S. dollar borrowing, and BlockFi saw a record number of transactions as traders took advantage of arbitrage opportunities. 

In the past, the crypto lender has had to cut rates because borrower supply had not met depositor demand. Since Thursday, BlockFi has seen a slowdown in net deposit growth to roughly 0 percent but not an outright decrease.

Next month, Tier 1 BTC holders (those who keep up to five BTC on BlockFi) will…

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