BlockFi, a popular crypto lending platform, has halved interest rates for some of the market cryptos held by non-US customers.
Interest rates for Solana deposits will drop from 10% to 5% starting June 1, while rates for Avalanche (AVAX) and Polygon (MATIC) will drop from 10% to 5% and from 11% to 5% , respectively. The company presented its planned changes in a Publish May 26.
BlockFi’s decision reflects the dynamics of the crypto market. BlockFi, which lends funds to institutional investors and returns returns to their clients, recorded an increase of 1,711% assets under management in 2020. As of March last year, BlockFi held $14.7 billion in its BlockFi Interest Account.
But that growth has since waned, with institutional investors borrowing less amid falling crypto prices. This decline in demand is not limited to BlockFi, with the current state of the market limiting the ability of lending platforms to offer customers higher returns.
BlockFi previously offered 6.25% to users holding more than one BTC, but now only offers 1% to 3% on up to 0.35 bitcoin and an additional 0.1% on larger amounts, such as The Block recently reported this. BlockFi’s Thursday announcement made no mention of BTC rate changes.
Joe Hickey, head of trading at BlockFi, recently told The Block despite falling rates, he predicts yields will rebound.
“People are still investing and I think that’s kind of a short-term thing and we’re going to see yields go up again in the second half,” he noted.