In a blog post today by BlockFi CEO Zac Prince, a digital asset lending platform, he shared that his company is well-capitalized and prepared to ride out the Coronavirus, or COVID-19, crisis.
Prince stated:
“Our Series B capital raise in January was well-timed and BlockFi remains well-capitalized, secure, and liquid while continuing to grow rapidly. As the global economy weathers a number of headwinds, including the Coronavirus pandemic, rest assured that at BlockFi we will remain a stable source of liquidity, while continuing to provide best-in-class wealth management solutions for our clients and the broader cryptocurrency market.”
Simultaneously, BlockFi announced an increase in interest rates paid to accounts.
Starting April 1st, BlockFi said they are raising interest account rates as follows:
- BTC Tier 1, 0-5 BTC, 6% APY
- ETH Tier 1, 0-500 ETH, 4.5% APY
- GUSD and USDC rates will stay the same at 8.6% APY
The platform said that performance continues unabated with zero losses in their lending book.
On March 12, Prince noted the “violent downward price movements in the cryptocurrency market resulting in very limited liquidity.”
This was handled strategically by our team and risk management system and we did not liquidate USD loan client collateral below a price of ~$4,500, despite the market reaching lows of ~$3,800. As a result of the team’s prudent actions during this period, our clients’ capital was saved and we also liquidated a smaller percentage (<10%) of our overall USD loan book vs. other market participants.
Prince said that BlockFi has processed the largest number and volume of daily deposits and withdrawals in the company’s history.
BlockFi is not alone in managing turbulent times. Both traditional and newer financial services firms are managing an unprecedented amount of volatility as markets react to COVID-19.