Crypto Interest Rates Are Rising While Traditional Interest Rates Are Going to Zero

• Traditional interest rates are near 0%, but Bitcoin interest rates are actually rising substantinally

During the financial turmoil this past month Central Banks worldwide have been slashing interest rates in order to stimulate the economy. Indeed, the Federal Reserve just lowered the Fed Funds Rate to 0%. However, while traditional interest rates are falling, interest rates for crypto deposits are rising, which is a boon for HODLERS.

On the crypto lending platform BlockFi the Bitcoin interest rate has risen from 3.6% annually to 6%, while the Ethereum interest rate has risen from 2% to 4.5%. Stablecoin interest rates remain unchanged, but are at a high 8.6%.

Essentially, users deposit crypto on BlockFi and earn interest just like with a savings account at a bank. The reason that interest rates are rising is that liquidity has become more scarce in the crypto space, and there is no Central Bank to print money, so anyone willing to lend is simply paid more.

Overall, crypto interest on platforms like BlockFi offers an excellent alternative for savers who are looking to earn interest, since for the foreseeable future no one using banks will be able to earn any significant interest due to Central Bank actions.

 

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