How to Lend Crypto on BlockFi to Earn Interest

Bitcoin, in the words of Bill Gates, is a technological tour de force. It’s a store of value cryptocurrency and the OG of all cryptos. Unfortunately, Bitcoin is not a proof-of-stake cryptocurrency and never will be. This means we can’t earn staking rewards from holding Bitcoin. But it is possible to safely lend your Bitcoin and earn interest with BlockFi. I’m a huge fan of always earning on your crypto. It will help cushion your portfolio when the bad times come.

Why lend your Bitcoin on BlockFi

BlockFi offers immediate withdraw of your Bitcoin if you need it. BlockFi is also one of the largest crypto lending platforms, with over $350 million in venture capital funding. BlockFi is US-based and subject to US laws and regulations, and is available in nearly all countries. The user interface (UI) is also fast and easy to use. Returns on your crypto are wonderful- and risk minimization of your portfolio is also wonderful. While I’d never put all my coins into a lending platform, BlockFi is safe enough given the returns.

Compound interest is awesome

Don’t need to harp on this one too much, because I’m sure you know. Over time, if you earn interest on your coins through lending or staking, and reinvest those rewards, this difference can be amazing. Imagine the unlikely scenario that Bitcoin’s price won’t change over the next 10 years. If you invested $10,000 in Bitcoin, and then lent that Bitcoin on BlockFi at 4.5%, and added $1,000/year to your account- this is what your balance would look like:

Keep in mind that you’d have to reinvest the rewards. Also note that this isn’t without risk. Although you’re earning rewards for lending your crypto, if the price of Bitcoin drops more than the interest you’re earning (and it will do this a LOT), you’ll be losing money. Remember that your losses are only made permanent when you sell- hence the HODL mentality.

Why platforms like BlockFi and Celsius need Bitcoin lent to them

Most of the time, cryptocurrency markets are [relatively] calm and trading at normal volumes. But occasionally, we have gigantic market movements. A negative headline about crypto comes out of China. A positive headline about crypto comes from the US tech sector. And the market goes into a wild sell off or big pump. To handle all this trading volume, exchanges like Coinbase and Binance may need extra crypto from time to time. That’s when someone like BlockFi or Celsius can come in and fill that need, for a fee.

BlockFi limitations
The 4.5% APY on Bitcoin only applies to smaller amounts of Bitcoin. If Satoshi, Elon Musk, or the Winklevoss twins rolled in looking to lend all their crypto at 4.5%, BlockFi would go bankrupt. BlockFi has limits on the other cryptos, too. If you withdraw funds more than a few times over a short time period, BlockFi will also hit you with some fees.

Steps to lend Bitcoin on BlockFi to earn interest
You’ll need to either already own Bitcoin or have an account set up on an exchange. You’ll also need to go to and start an account.

1. Buy Bitcoin on an exchange, as long as it’s not Robinhood. Every exchange sells Bitcoin- there are a lot of options.

2. Send your Bitcoin to your BlockFi account. Log in to your BlockFi account. On the bottom right side of the BlockFi landing page, you’ll see the Interest Account block. In the bottom right side of the block, click Fund with crypto or USD.

You’re presented with a menu of options for the asset you would like to send. Select Bitcoin from the drop-down menu. BlockFi will give you your BlockFi Bitcoin address. Copy the address to your clipboard. Go to your exchange or hardware/software wallet and find the feature to send Bitcoin. Paste your BlockFi address and double check that it is correct. Send your Bitcoin to BlockFi.

3. Lend your crypto on BlockFi to earn interest! Under Accounts on the top menu select Interest Account on the drop down menu. Once your Bitcoin transaction confirms, your crypto is earning interest. Keep in mind that the Bitcoin network moves at a glacial pace (really fucking slow), so confirmation could take up to an hour. Sit back, relax, forget about crypto for a while, and let your coins earn you money!

Why not earn on your crypto?
My personal crypto portfolio consists of a 40% Bitcoin holding. I more or less copied Guy’s portfolio allocation from Coin Bureau because he knows way more about this topic than I do. Holding the lion’s share of your portfolio in BTC and ETH might seem boring, but I’m a huge fan of not losing a crazy amount of money when the market pulls back. It’s true- smaller cap coins tend to lose a far greater amount of their value when the crypto market suffers corrections, sometimes up to an 80% or 90% loss. It’s really tough to come back from something like that. For this reason, I’m always harping against memecoins and shitcoins, since they have no real-world use cases. Thanks to platforms like BlockFi, we now have a way to earn money on our crypto even with large cap proof of work coins like Bitcoin and Ethereum!

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