According to information from Bloomberg, Ethereum and Bitcoin investors are transferring millions of dollars of their crypto assets to interest-bearing accounts to earn a return in crypto with minimal risk. Traders of cryptocurrency have moved an estimated $35 million in ETH and BTC to these accounts with custodial corporations such as New York-based BlockFi.
However, in order to prevent crypto whales from taking advantage of the interest-bearing feature of their accounts, BlockFi plans to introduce account caps of 25 BTC and 500 ETH by the beginning of next month.
According to BlockFi CEO Zac Prince, the company is expecting higher interest rates when prices are falling and lower interest rates when prices are increasing. Prince said that Block Fi is expecting cryptocurrency to be bullish for the long term despite the recent bearish downtrends.
BlockFi Wants Retail Investors, Not Whales
BlockFi emphasized that the accounts for the company are only for retail investors – not crypto whales. BlockFi itself has specified that beginning the 1st of April, only the BIA, or the BlockFi Interest Account that reaches 25 BTC or 500 ETH will earn a 6.2% annual rate. Those over the limit will make an additional 2% interest depending on tiers. Every 0.5 BTC or ETH is expected to earn an interest of 2% as the account increases in size.