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This newsletter is sponsored by BlockFi:

BlockFi is a new kind of financial institution. With BlockFi, you can use cryptocurrency to earn interest up to 7.5% APY (I’ll explain how below), borrow cash against your crypto holdings, and buy or sell crypto. No minimum balances or hidden fees. Tip: sign-up is smoother in the mobile app. Set up your BlockFi account today, and get up to $250 in free bitcoin: CLICK HERE

Hey everyone,

This week’s newsletter is notably special to me because I have been using BlockFi on my own for almost 5 months now. I was ecstatic when their team reached out to me to see if I wanted to do a newsletter covering their unique company since their platform is something I have praised on my Twitter in the past. With all my newsletters I try to be as transparent and open as I can and I would not be covering this company if I didn’t believe in their product. The icing on the cake is I’ve already been using their product extensively so I’m putting my money where my mouth is!

What will be covered in this newsletter:

• What is BlockFi? (trading, earning interest, loans, stablecoins, credit card)

• How I personally use BlockFi to earn interest and my crypto game plan

• Why security of your crypto is so important (not your keys, not your crypto)

• The future of cryptocurrencies, incoming inflation

Grap a cup of coffee because this is something you are not going to miss…

What Is BlockFi?

I feel like by now everyone who is reading this has at least heard of cryptocurrencies. If not, I usher you to get familiarized in my recent newsletter in which I give an intro to Ethereum and Bitcoin. Make sure to come right back!

Digital assets, in the “history of money”, are very new. As most of us know, Bitcoin was created in 2009 and that is what set the whole space in motion. Companies and institutions have exploded onto the scene in this new wave of decentralized finance, brokerages, and applications. In the simplest terms, BlockFi is an interest-bearing account, trading platform, and a vehicle in which you can receive crypto-backed loans - all combined under one easy-to-use mobile and web platform. Let’s dip into BlockFi’s capabilities one by one and learn a few things about crypto safety!

Crypto Platform: On BlockFi you can buy and sell up to 12 different cryptocurrencies and this list continues to get bigger by the month. You can connect your bank or credit card to instantly deposit funds into your account. Buying or selling only takes a few clicks and is completely user-friendly. When you purchase a currency on BlockFi you immediately start earning interest for holding that coin/token inside of BlockFi.

Interest Bearing: One of the most enticing things about BlockFi is being able to gain interest in the crypto assets that you hold in your account. I’m in Bitcoin and Ethereum for the long haul so having it earn interest for me is only a net positive.

Here is a short breakdown of what you can possibly earn (depending on how much you own) with each coin:

Bitcoin: 4%

Ethereum: 4%

Litecoin: 4.5%

USDC (stablecoin): 7.5%

GUSD (stablecoin): 7.5%

PAX: 7.5%

BUSD (stablecoin): 7.5%

DAI: 8.5%

UNI: 3.75%

BAT: 3.65%

To get a complete list covering interest rates at every tier click here.

I’m sure some of you are wondering what a stablecoin is…

“A stablecoin is a new class of cryptocurrencies that attempts to offer price stability and are backed by a reserve asset. Stablecoins have gained traction as they attempt to offer the best of both worlds—the instant processing and security or privacy of payments of cryptocurrencies, and the volatility-free stable valuations of fiat currencies”

Source: Investopedia

As we all know, fiat savings accounts are currently practically completely useless right now. Goldman Sachs’ savings account vehicle known as “Marcus” tauts that it is the “High Yield Savings Account You Deserve”. What part of .50% do I deserve? That is losing to inflation by a mile, especially in this economy. It gets even worse as you go to other competitors. Long story short, there is no such thing as a fiat “high yield” savings account. This notion of “high yield” is an utter lie and I personally don’t know how they get away with the false advertising.

Loans: On BlockFi’s platform you can borrow against your crypto in your account if you need a loan. Rates for doing this is as low as 4.5% APR.

Credit Card: One of the newest installments that BlockFi is releasing is a Bitcoin earnings credit card. You can earn an unlimited 1.5% back in Bitcoin on every purchase with no annual fee - which is a no-brainer in my mind if you are bullish on Bitcoin. The Bitcoin you earn through your credit card purchases will directly go into your BlockFi account and you guessed it… earn more interest.

How Do I Use BlockFi?

I am in crypto for the long haul and I will explain why shortly.

I bought my first cryptocurrencies back in 2016/17 when the first major bull run occurred. Of course, during this time I didn’t even understand truly what I was getting into (or buying) and found myself frequently trading in and out of different cryptocurrencies. I had caught “FOMO” which is fear of missing out and jumped onto the train buying several currencies. I had no “why” which is a common saying coined by Peter Lynch one of the greatest investors of all time. I didn’t know what Bitcoin, Ethereum, Litecoin, etc. truly was so if there was a dip I panic sold and if it went up I wouldn’t ever buy more. Here is what usually happens when you don’t have a “why” for any type of investment you make:

You don’t know when to…

- sell for a profit because you have no way of gauging if the investment is overvalued/overbought

- sell for a loss because you don’t know if your “why” has changed or gone away and actual change has occurred with the investment

- add on a dip because you don’t know if whatever seemingly bearish event is total BS/a complete overaction and the investment could be oversold

- press your winners because you don’t know if your “why” is coming to fruition and your bull cases are becoming realities

Over time, I have done my research and personally came to the conclusion that Bitcoin and Ethereum are the two cryptocurrencies that I’m most bullish on. This recent article that I mentioned earlier goes over my “why” (I can’t fit all my reasons for being bullish on BTC and ETH in this newsletter). I have also come to acknowledge that due to cryptocurrencies’ current volatile nature my more comfortable method of investing in them is a long-term buy and hold strategy. I don’t want to trade in and out and I usually only buy dips when they occur. I want to at the very least hold both of my Bitcoin and Ethereum bags for 10+ years before I even think about selling so BlockFi was a perfect instrument for me in which I receive 4% APY on both of my positions for just having my crypto sit in my BlockFi account.

On top of this, I will be receiving soon the BlockFi credit card in which I will receive 1.5% back in Bitcoin on every purchase that will go straight into my BlockFi account (as I explained earlier).

Security Is 🔑

Anyone that has been in the crypto game knows that the security of your digital assets is paramount. One of the biggest reasons why I have chosen BlockFi as an interest-bearing account for my digital assets is because of the star-studded cast of investors and institutions such as Valar Ventures, Galaxy Digital, Fidelity, Akuna Capital, SoFi, and Coinbase Ventures to just name a few.

BlockFi has top-tier identity verification, 2 Factor Authentication, and “Allowlisting” which ensures that the crypto in your BlockFi account can only be sent to known withdrawal addresses. Most importantly, when you send your crypto to your own BlockFi account from another account or purchase additional crypto within the BlockFi Interest Account (“BIA”), that digital asset is replaced with an obligation to return the same amount of that crypto plus any interest earned.

Here are some more details about BIA:

As of March 31, 2021, BlockFi held approximately $14.7 billion in client assets on its BIA platform, an increase of $10.3 billion or 3.3x from December 31, 2020. As of March 31, 2021, 43% of those assets were held with third-party custodians; 20% in liquid investments in equities, futures, and options; and the remaining 37% was used as collateral for hedging activities or lent, in accordance with BIA’s Account Terms. Each such activity resulted in an offsetting position that matched the client BIA positions (not accounting for fee and interest payments received or owed).

Source: BlockFi

As always I keep it real with you - I want to make sure it’s known that cryptocurrencies are not backed by any government and therefore not subject to FDIC/SIPC protections. I highly recommend checking out BlockFi’s security page that covers everything you need to know which is right here. Something that is also unique about BlockFi compared to other crypto brokerages is that it’s one of the few interest-earning platforms that is also domiciled in the United States and therefore regulated under U.S. law. When it comes to any sort of brokerage, banking, etc. it is very important to me that it is a U.S. company (which is hard to find in the cryptocurrency space).

Not Your Keys, Not Your Crypto

I am going to come off very critical here but it’s for your safety. Companies such as CashApp, Venmo, Robinhood, and many others have offered their customers the ability to purchase crypto on their platforms. This truly isn’t your crypto and I will explain why. One of the most fundamental things about cryptocurrency is the ability to ensure that the digital coins you have are yours and absolutely nobody else. To explain this better there are two types of storage…

Hot Wallet: This is a tool that IS connected to the internet that allows individuals to store, send, and receive cryptocurrencies. It is widely known that since your wallet is connected to the internet via a platform that it can be more susceptible to hacking and security breaches. In a cold wallet, you have public and private “keys” or addresses/digital signatures that allow you to send crypto to other accounts.

Cold Wallet/Cold Storage: This is a tool that is NOT connected to the internet which thereby is completely guarded against cyber attacks. You can store your crypto on this cold wallet and the only major con is losing it or forgetting your encrypted password. Often times cold storage looks like a flash drive like the Ledger Nano X. This is one of the safest ways to store your crypto.

As mentioned above, there are many platforms that you can buy/sell cryptocurrencies. For instance, you can buy, sell, trade, etc. on Robinhood but you can never actually own your crypto by moving it to a cold wallet! So in reality when you buy Bitcoin on Robinhood they are buying it for you and holding it in your possession but it is never truly yours. On BlockFi you can move the crypto that you buy on the platform to any public or private address or hot/cold wallet. This flexibility in its own right is security.

Where I See Crypto In The Future

We have seen crypto erupt over the past year. NFTs and DeFi (Decnetralilzed Finance) applications have become household names. Let’s take a look at over the past year the performance of some of the coins that you can trade and hold for interest on BlockFi’s platform.

Although prior returns do not guarantee future returns I personally believe that crypto and in particular Bitcoin and Ethereum are here to stay. Billions of dollars have been invested in these coins and companies that support products, platforms, and applications for them. Microstrategy, Square, and even Tesla have invested in Bitcoin and we have seen funds like Grayscale and others make it even possible for individuals to hold crypto in their retirement accounts. I believe that this wave will continue and more and more big-cap companies will move some of their cash into a hard digital asset such as Bitcoin. We know that the Fed has printed almost a quarter of ALL MONEY PRINTED in U.S. existence in 2020 and spending is ticking sharply up. We have no idea what the future movement by the fed will be but when you print that much money in that short of time there have to be repercussions. Make no mistake about it - no matter what your politicians or government officials say, the dollar is weaker today than it was last year. How much? We won’t truly know until it plays out but people will continue to seek assets that can’t be manipulated by governments and security will be the most important factor. Figures of 15% current inflation are tossed around by people I know and trust. This is why I believe Bitcoin, Ethereum, and other coins are here to stay and the platforms that support them such as BlockFi will follow suit.

If you are looking to get into the space or own crypto and want to earn interest on it with BlockFi, click here for up to $250 in free Bitcoin for opening an account and depositing.

Let the games begin!

Have a good rest of the week,

If you know someone who is interested in gaining interest in their cryptocurrencies or has been trying to figure out what the crypto fuss is all about consider giving it a share…

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