BlockFi, a well-known crypto lending platform, has reduced interest rates by half for cryptos that are held by non-US clients.
As of June 1, interest rates on Solana deposits will drop from 10% to 5 %, while rates for Avalanche and Polygon (MATIC), will fall from 10% – 5% and 11% – 5% respectively. On May 26, the company published a post that outlined its plans for changes.
The dynamics of the crypto market are reflected in BlockFi’s decision. BlockFi lends money to institutional investors and then returns the funds to their clients. saw an 1,711% increase of assets under management in 2020. BlockFi had $14.7 billion in its BlockFi interest account as of March 2017.
However, institutional investors have been borrowing less in the face of falling crypto prices and this has led to a decline in such growth. BlockFi is not the only one experiencing declining demand. The current market state has made it difficult for lending platforms to offer higher returns to customers.
BlockFi used to offer 6.25% for users who had more than one BTC. However, it now offers 1% to 33% on 0.35 bitcoins and 0.1% on larger amounts as reported by The Block . BlockFi did not mention any changes in the BTC rate during its Thursday announcement.
BlockFi’s Head of Trading, Joe Hickey, has recently told the Block that despite falling rates, he believes yields will rebound.
He stated that “People continue to invest” and that it was a short-term phenomenon and that yields would rise in the second half the year.
