As crypto lending and borrowing get more popular with crypto holders, new platforms offering these products also emerge.
But, even as more companies come up, it is always safer and more rewarding to stick with well-established ones like BlockFi and Crypto.com.
Although both companies offer higher than average yields for their savings account and have several other products on offer, they are not entirely the same. Each of the companies has something that makes it stand out, and every investor needs to know to pick between them.
[wptb id="12304" not found ]BlockFi vs. Crypto.com: Introduction
BlockFi is a US-based crypto lending platform founded in 2017 and focuses more on offering crypto banking solutions. The company has massive financial backing. Top investors like Morgan Creek have been pumping millions of dollars into the company over the years.
Crypto.com is based in Hong Kong, and it is an older company than BlockFi, given that it has been in the business since 2016. What seems to give it an edge over many other crypto lending platforms is that it offers a broader range of services.
Supporting Crypto Assets & LTV
With both BlockFi and Crypto.com, you get a wide variety of assets that you can use to get crypto-backed loans, trade, or deposit with the platforms to earn interest. What’s more, the companies are constantly reviewing their supported crypto assets to ensure you never miss out on any emerging ones with good potential.
- BlockFi
That said, BlockFi seems to focus more on the potential and quality of the assets they offer instead of just giving you an extensive portfolio of low-yield assets. They offer around 10 assets that include 6 primary coins and at least 4 Stablecoins.
The BlockFi assets include BTC, LTC, ETH, USDC, and PAX Gold. Crypto holders on the platform can use all of these to open savings accounts or as collateral for loans. For the loans, the company allows you to borrow at 20%, 35%, or 50% LTV.
- Crypto.com
With Crypto.com, you get over 70 different crypto assets. Their asset offering ranges from the more common and popular names like BTC and ETH to smaller ones and less volatile assets like THETA and ZRX.
But, despite supporting more assets, it is essential to note that you cannot take loans or earn interest on all of them. The company allows you to use around 15 assets for their collateralized loans, and you can also earn interest on just a few of the assets.
When borrowing against your digital assets, Crypto.com will give you an LTV ratio of up to 50%, similar to what you get with BlockFi.
BlockFi vs. Crypto.com: Interest Rates, Lock-in Terms & Payouts
The interest rates you get on any platform are crucial as they determine how fast you can grow your portfolio and whether it is worth it or not.
Moreover, you also need to check the lock-in terms as you do not want to tie down your assets for an extended period. But, the good news is that BlockFi and Crypto.com offer higher than average interest rates and good terms and payouts.
- BlockFi
The interest rates on the BlockFi savings accounts depend on the number and particular assets you invest in, ranging between 0.25% and 7.5%.
BlockFi uses a tiered system to award the interest, and each asset has different tiers based on the number of coins you deposit. For example, if you deposit 0 to 0.25 BTC, you are in tier 1 and earn 4% yields, while anything more than 5 BTC is in tier 3 and yields 0.25%.
BlockFi does not have any lock-in periods, and so you can withdraw your assets anytime you want with no penalties or fees charged. Additionally, the company offers compound interest that accrues daily but is paid out at the beginning of every month.
- Crypto.com
Crypto.com also allows you to earn interest on your savings accounts, and they offer higher interest rates than many other players in the market that will go up to 14%.
The actual rate depends on the specific asset you deposit, but it is typically between 0.5% to 8.5% for cryptocurrencies, while the Stableoins will give you up to 14%.
The company does not have a strict lock-in term but instead allows you to choose whether to keep the assets in flexible savings accounts or high-yielding 1-month or 3-month yield accounts.
Crypto.com also follows a compounding interest model, and the assets will start earning interest immediately after you deposit them. But the company pays the yield once weekly in fiat currency or crypto.
BlockFi vs. Crypto.com: Products & Features Comparison
While the desire to earn interest on idle crypto assets often drives most crypto investors to BlockFi and Crypto.com, both lending platforms still have several other attractive products.
- BlockFi
Another outstanding BlockFi product is the crypto-backed loan account. With these accounts, crypto holders can get fiat currency or stablecoins by depositing their digital currencies as collateral.
You can get 20%, 35%, or 50% of the total value of the asset you deposit as collateral sent directly to your crypto wallet.
The annual interest rate you pay for these loans depends on the LTV ratio you choose, but it ranges between 4.5% and 9.75%. The minimum loan amount on the BlockFi platform is $10,000.
Other notable BlockFi products include the crypto trading platform and their credit card reward that gives you back 1.5% of every purchase you make with their Visa credit card.
- Crypto.com
Besides earning interest, the Crypto.com platform also allows you to take quick collateralized loans using your digital currencies to settle urgent issues without selling them.
Crypto enthusiasts can borrow up to 50% of the value of their assets. Like several platforms out there, the interest depends on the LTV and CRO tokens stake. For example, if you take a 50% LTV loan with under $100K CRO stake their native token, you pay an 8% interest rate.
The company also has the minimum required amount for borrowers set at $100, and you can borrow up to $500k. Also, the maximum loan term is 12 months, and there are no credit checks when borrowing.
Other key features of this lending platform include the advanced crypto exchange market and crypto payment.
Fees Comparison
The cost of doing business on a crypto lending platform matters a lot. Therefore, when deciding whether to go for BlockFi or Crypto.com, you need to consider origination fees, deposit fees, and withdrawal fees, as they all determine how much it costs to use the platform.
- BlockFi
BlockFi charges a standard 2% origination fee for all the collateralized loans you take on their platform. Therefore, the actual cost of loans will include their simple interest plus the origination fee.
However, BlockFi does not charge any deposit fees, but this will not exempt you from any costs that the channel you use to make the deposit charges, such as wire transfer fees.
BlockFi has withdrawal fees, but the actual amount depends on the particular asset you are withdrawing. For example, BTC withdrawal will cost you 0.00075 BTC while LTC costs 0.0025 LTC, and Stablecoins charge a flat rate of $10.
It is also important to note that the company will give you a free withdrawal every month. Investors get one free withdrawal each for crypto and Stablecoins.
- Crypto.com
The Crypto.com fees structure is a little more complicated than what you get when using the BlockFi platform for cryptocurrency lending or borrowing.
With Crypto.com, you will never have to pay any deposit fees, and they also do not charge for transactions.
There are no free withdrawals when using this crypto company, but their charges are lower than BlockFi. For example, you only pay 0.0004 BTC to withdraw BTC.
Safety & Security Features
The safety and security of your savings account or any asset you deposit with the company for crypto-backed loans should be at the top of your mind.
Even if the company offers the best interest yields, it is still not worth it if your crypto assets are unsafe. But, the good news is that BlockFi and Crypto.com offer both high-interest yields and some of the securest platforms.
- BlockFi
BlockFi takes some extreme measures to ensure they provide top-tier security. Their advanced security system is one of their key features, and you can be sure that all the assets you have in their interest account are highly secure.
The company has advanced security for the entire platform and also for individual investor accounts. These security protocols include two-factor authentication for all interest accounts and address allowlisting to ensure funds on your BlockFi wallet can only be sent to specific addresses.
Additionally, the crypto company uses PII Verification to ensure that only you have access to your account and store most of the assets in cold storage. What’s more, they use Gemini custodial wallet, which is one of the securest places to keep digital assets.
- Crypto.com
Cypto.com is famous for its high-interest rates and being a user-friendly platform. You can also add security to the many things that give the company an edge over many competitors.
The crypto borrowing/lending platform has multiple security features that include highly advanced protocols to help keep your crypto secure. They store almost 100% of the user assets in cold storage, which will always be out of reach for hackers.
Better still, Crypto.com has highly advanced encryption for user data, so you never have to worry about your information landing in the wrong hands. Other security measures like multi-factor authentication, address allowlisting and bug bounty help keep their platform even more secure.
Insurance Coverage
No matter how secure your crypto platform might be, it is still essential to make sure that it has some form of insurance coverage to protect you if something went wrong.
Even if the company does not have private insurance coverage, their primary custodian should at least cover the assets they store on their behalf.
- BlockFi
Despite being a highly regarded company, BlockFi does not have private insurance coverage for the assets you deposit with them. However, this does not mean your digital currencies will not be insured.
BlockFi uses Gemini as the primary custodian for the user assets. Any assets that Gemini holds are coved by FDIC insurance up to $250,000 per user account. Gemini also has third-party insurance coverage for all the assets they maintain in hot wallets for BlockFi.
- Crypto.com
Crypto.com has one of the most extensive insurance coverages compared to other companies that deal with crypto. The company provides a $360 million insurance cover for all the digital currencies and assets they hold on their platform.
If you keep a USD balance on Crypto.com, it will be FDIC insured up to $250,000, given that the company, in turn, keeps the funds in a regular bank account.
Minimum Deposit & Withdrawal Limits
Most platforms will have a minimum amount required before you can earn interest or get a collateralized loan. However, BlockFi and Crypto.com are more focused on making their products accessible to everyone and will hence make the limits very user-friendly.
- BlockFi
BlockFi does not have a minimum deposit, meaning you can add as little as you want to start enjoying their compound interest. However, the compound interest you get highly depends on your deposits, and the more you keep with the company, the higher your earnings. Also, there is no maximum deposit limit.
BlockFi will have some specific limits like most other centralized and decentralized finance companies when it comes to withdrawals. Their limits depend on the particular asset you are withdrawing.
You can withdraw a maximum of 100 BTC every week for BTC withdrawals, while the limit for Stablecoins is $1 million every 7 days.
- Crypto.com
Technically, Crypto.com also does not have any minimum deposit requirements. However, you need to have a specific amount in your account before you start earning. For example, the minimum you can invest in a BTC interest account is 0.0005 BTC.
Withdrawal limits on the Crypto.com platform will depend on the specific asset you are withdrawing. If you have BTC in your account, you can withdraw a maximum of 10 BTC every day, while the limit for USDC withdrawal is 100,000 USDC per day.
Account Sign-Up Process & KYC
It should only take you a few minutes to set up an account on BlockFi and Crypto.com. But, before you get started on either company, it is vital to note that both have mandatory KYC verification to keep the platforms secure.
How to Sign-Up on BlockFi
- Click “Get Started” on the https://blockfi.com/ home page
- Fill up the form that opens with your names, email addresses and create a password
- Tick to certify you are of legal age and agree to the terms
- Verify your email address
- Follow the prompts and add personal information like address and phone number.
- Do KYC verification
- Add funds to your account, and you are all set
How to Sign-Up on Crypto.com
- Click on “Sign Up” https://crypto.com/
- Fill in the necessary info by following the onscreen instructions
- Click “Continue” to get an email verification code
- Verify your phone number
- Do the KYV verification
- Add crypto or fiat to the account, and it will be ready to use
Supported Countries
BlockFi and Crypto.com have a global presence as they try to cater to a worldwide market. However, BlockFi is not available in countries under sanctions and those on their watch list.
Additionally, some BlockFi products like their crypto-backed loans are only available in 45 of the 50 USA states.
Crypto.com has more than 10 million users from over 100 countries across the world. The company is constantly adding new markets almost every other week. While their products are available in most of the US and its territories, you cannot use them in New York.
Conclusion
BlockFi and Crypto.com are two crypto borrowing and lending platforms you can be sure will never disappoint you.
But, when you have to pick between them, you should consider factors like the interest yields that each offers, security, and ease of using the platform.
That said, BlockFi seems to have the edge over Crypto.com in most of these aspects. Therefore, BlockFi is a relatively better choice for both beginner and more experienced crypto investors.
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