Three days after FTX granted the firm a $250 million revolving credit line, BlockFi is increasing the return on its Bitcoin, Ethereum, and stable coin lending products.
According to its official Twitter account, the cryptocurrency lending firm will increase its rates across all levels for Bitcoin, Ethereum, and key stable coins like USDC, USDT, GUSD, PAX, and BUSD.
Bitcoin yields will rise by 0.5 percent to 1.9%, Ethereum yields will increase by 0.5 percent to 1.75 percent, and stable coin yields will increase by 0.5 percent to 3%. This takes Bitcoin and Ethereum prices to between 2 and 3.5 percent, and stable coin rates to between 6 and 8.75 percent. The hike will go into effect at the start of July.
Additionally, the firm will reduce its withdrawal costs by $1 for Bitcoin, $2 for Ethereum, and $25 for stablecoins, while eliminating its “one free withdrawal per month” policy.
BlockFi said that it was able to boost interest rates as a result of efficient risk management, declining market rivalry, and a shifting macroeconomic yield environment. It said, for instance, that it had never been exposed to UST or stETH and that “when crypto market volatility escalated in May and June 2022, BlockFi was among the first to de-risk its credit and market risk exposure.”
Notably absent from the presentation were the $250 million loans the firm got from the cryptocurrency exchange FTX only three days before. The loan was extended to “bolster” the balance sheet and platform strength of the company.
Prior to this, the firm lay off 20% of its personnel and repaid a debt to the notable crypto hedge fund Three Arrows Capital. A financial statement that had been compromised revealed that BlockFi had lost more than $285 million over the preceding two years. Although its legitimacy cannot be proved, the paper has fueled speculations about the company’s financial difficulties.
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