Cryptocurrency is becoming ever more popular each day. Bitcoin, the leading cryptocurrency, is up over 15,000% in the last 5 years. Since the launch of Bitcoin in 2009, many other cryptocurrencies have come into existence. In fact, as of 2022, there were over 4,000 different cryptocurrencies available.
As cryptocurrency continues to rise in popularity, the demand for secure cryptocurrency trading and holding platforms is skyrocketing. Today, with many platforms to choose from, investors may be confused about which one is best.
BlockFi, launched in 2017, is a crypto management platform that functions like a bank for cryptocurrency. Crypto held in BlockFi can earn as much as 8.6% APY as opposed to traditional banks paying less than half a percent. Members of BlockFi can also buy and sell various cryptocurrencies without fees, use their cryptocurrency as collateral for a loan, and soon, earn more with a Bitcoin rewards credit card. BlockFi is seeking to simplify the world of cryptocurrency with faster trades and a highly secure platform.
Coinbase was launched in 2012 and is the leading cryptocurrency trading platform in the United States. With over 30 different cryptocurrencies available on the platform, Coinbase is often considered a pioneer of the industry. In addition to buying and selling crypto, Coinbase also offers users the ability to earn interest on assets of about 4-8%, to safely store assets, and to make payments with their cryptocurrency.
Both platforms offer members secure storage, competitive interest rates, and the ability to trade cryptocurrencies. The key differences between the two platforms are their fee structures for trades, and a few other features such as BlockFi's offering of receiving a loan.
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BlockFi is a complete cryptocurrency management company that offers members the ability to trade crypto, earn assets on their holdings, and various other banking functionalities. With ever increasing demand for cryptocurrency, the need for a secure platform that is simple and easy to understand is at the top of most cryptocurrency trader's minds.
Launched in 2017, BlockFi has quickly gained popularity due to its impressive offerings and low fees. Though it doesn't have nearly as many cryptocurrencies available as Coinbase, BlockFi does offer a few unique features that are highly popular.
BlockFi has a number of impressive features. One of which is the ability to buy and sell cryptocurrency without any fees. While other crypto management platforms offer low fees, BlockFi is completely free. This is appealing to investors who are beginning to enter the world of cryptocurrency and want to learn more.
In addition to buying and selling cryptocurrency for free, members can also earn high interest rates on their holdings. Storing cryptocurrency has been a source of confusion for many investors. Between hot and cold wallets, investors have sought out a simple solution. BlockFi, with its secure platform, has created just the solution. In fact, users can also earn up to 8.6% APY by storing cryptocurrency in the platform. This interest is accrued daily and paid out monthly. Cryptocurrency traders used to simply spend or store their assets in a wallet. But now, they can actually earn interest on their holdings.
BlockFi also offers members a unique ability to receive a loan using their cryptocurrency as collateral. They do require a 50% loan to value ratio (LTV). This means that a user wanting to receive a loan of $10,ooo would have to maintain $20,000 worth of crypto in their account. With a loan from BlockFi, members will pay 4.5% in interest. For many investors who do not want to sell their cryptocurrency, this is a great option.
BlockFi is also soon launching a Bitcoin rewards credit card, which actually offers Bitcoin as rewards. Members will earn 1.5% rewards in Bitcoin on every purchase. They are offering a $250 sign up incentive for those that spend $3000 in the first 3 months. The card will have a $200 annual fee.
Customer support can make a big difference for members. The customer support edge for BlockFi vs Coinbase definitely goes to BlockFi. Members can live chat with a bot, submit email inquiries, and talk directly with an agent on the phone on Monday through Friday.
One of the main questions about cryptocurrency is the level of security users can expect. BlockFi houses 95% of accounts in cold wallets, with the remaining accounts in hot wallets insured by Aron. (A cold wallet is a storage device that is not connected to the internet. You can think of it as a thumb drive. Hot wallets are connected to the internet.)
Coinbase is the leading cryptocurrency platform in the United States not only due to the fact that it has been around since 2012, but also because it has never been successfully hacked. The platform allows members to buy and sell an impressive number of cryptocurrencies as well as earn interest on their holdings.
Coinbase lures many cryptocurrency traders with its recognizable brand name and track record. With the longest history of cryptocurrency management platforms, Coinbase is well-established and offers members a secure place to trade and hold their assets.
The platform appeals to beginners with it's simple app but also advanced crypto traders with its free platform Coinbase Pro. It is free in that users can sign up for free, though members will pay trading fees per transaction in both Coinbase and Coinbase Pro. The difference between Coinbase and Coinbase Pro is that they cater to different members. Coinbase is designed to be simple and easy to use, while Coinbase Pro is made for more advanced traders with its advanced charting and multiple order types.
Like BlockFi, Coinbase allows members to buy and sell cryptocurrency. While BlockFi offers trades without any fees, Coinbase does charge transaction fees, though they are fairly competitive among market rates. Learn more about Coinbase's fee structure. One of the main draws to Coinbase is the vast number of cryptocurrencies on the platform. They currently offer 32 different cryptocurrencies to trade.
Their platform features a debit card that allows members to earn rewards from their purchases. The Coinbase card is a Visa debit card that offers 4% in rewards every time the card is used. There is no signup or annual fee. The card can be used anywhere Visa is accepted and users can spend any of the assets in the account.
Coinbase also offers members the ability to earn interest on their holdings. Members can earn about 4-8% interest each year.
Like BlockFi, Coinbase also gives its members the ability to receive a loan backed by Bitcoin as collateral. Coinbase requires a 30% LTV and a maximum loan up to $100,000. They charge 8% APR, but they allow members to postpone repayment of the principal for 1 year.
Coinbase does offer customer support, though they do not have a phone number to reach a live agent. To contact Coinbase and work with a representative, members must send an email through their support form. They also make company updates on their Twitter account.
Security is of extreme importance for Coinbase. Members can rest easy knowing that all assets held online are privately insured by the company. Coinbase has also stated that less than 2% of assets are held online, while the rest is held in cold storage. Cash positions held within the platform are FDIC insured up to $250,000.
Choosing to use BlockFi vs Coinbase will depend on the goals of the investor. If you are searching for a place with advanced trading and a plethora of cryptocurrencies, Coinbase could be your best bet. If you are looking for commission-free trades however, then BlockFi may be better suited for your needs.
Both platforms are secure and offer users a safe place to buy, sell, and store cryptocurrency. Signing up for an account is quick and easy with both platforms. They also both offer annual interest on assets held within the platforms.
Since both platforms are relatively young, not to mention that Cryptocurrency is relatively young, they will likely undergo many upgrades and enhance their offerings as time goes on. With possible rewards credit cards and potential cryptocurrency ETFs in the future, these are two platforms that investors should watch closely.