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BlockFi Update: Cryptocurrency deposits rose by 30 percent in April

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BlockFi Update: Cryptocurrency deposits rose by 30 percent in April
Source: Pixabay

BlockFi, the cryptocurrency lending platform, set the market alight in early March after launching its Bitcoin [BTC] and Ethereum [ETH] savings account. Since its introduction, BlockFi’s cryptocurrency deposits have risen massively, and were further buoyed by April’s crypto rally.

According to the April 23 update by BlockFi, its interest account balance in cryptocurrencies for April is over $53 million. Since the sum was just over $40 million in March, a whopping 30 percent increase was recorded in April. The March and April figures stand out in comparison to the first two months of the year when the balance was below $12 million.

Source: BlockFi

Additionally, BlockFi made a number of changes to savings accounts, which will be applicable from May 1. The previous minimum balance of 1 BTC will be reduced to 0.5 BTC, which they stated would apply “retroactively” from April 1. This would imply,

“That means if your BIA BTC balance was between 0.5 and 1 BTC in April, you’re eligible to receive interest at the end of April. We expect to lower our minimum balance further in the near term.”

Ether will also see a reduction in its minimum balance from 500 ETH to 250 ETH and will earn an annual percentage yield [APY] of 6.2 percent. However, citing the declining “demand for borrowing ETH,” the tier rates for the top altcoin will be “adjusted in tandem.”

Finally, BlockFi also announced that they will be expanding to India given the rising demand for its cryptocurrency lending and depository products, over the month. The South Asian giant will be added to the 65 countries the platform already operates in.

Few weeks after launching their BTC and ETH savings account, customers noticed a “flexible interest rate” being touted on BlockFi’s terms page, making them question the 6.2 percent interest rate claimed by BlockFi. The terms read,



“We will determine the interest rate for each month in our sole discretion, and you acknowledge that such rate may not be equivalent to the benchmark interest rates observed in the market for bank deposit accounts.”

Zac Prince, the Chief Executive of BlockFi responded to community concerns, clarifying that the account’s interest rate would be “higher” when the market declines and “lower” when the market rises, as the “demand to borrow Bitcoin is partially driven by market sentiment.”

BlockFi’s recent statement also shed light on this fluctuating interest rate.

“As rates change in the market, we adjust the rates our clients receive. Our goal is always to provide the most competitive prices, so that you can get the most out of your crypto investments.”





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JP Morgan: Big banks stand corrected as Bitcoin rally past intrinsic value; admits current surge mirrors 2017 rise

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JP Morgan: Big bank stands corrected at Bitcoin rally past intrinsic value; admits current surge mirrors 2017 rise
Source: Pixabay

Big banks are riding a FOMO wave as the Bitcoin bull-run is just beginning. Spearheaded by the changing colors of JP Morgan, which recently forayed into the digital assets world, the banking elite is now suggesting that their initial stance on Bitcoin and the larger cryptocurrency world might have been off.

A recent chart by JP Morgan shows the current BTC price veer upwards chiding the “intrinsic value” the big bank placed on the virtual currency.

Based on the article by Bloomberg, the price of the coin would reverse towards the end of December 2018 and then make marginal gains until May 2019, all under the $5,000 mark. In reality, the BTC price, after dropping to “rock bottom” at just above $3,100 in early December 2018, edged upwards.

Several spurts of growth were seen in early January and February, prior to a massive April ascendance. On April 2, Bitcoin did away with the bank’s value mode and amassed a daily gain of over 15 percent, fuelling its current rise. Breaking the $5,000 ceiling in the process, which was pegged to remain intact well into May 2019, the king coin is now almost $3,000 ahead of the mark and is not looking to stop.

Source: Bloomberg

It should be noted that JP Morgan’s “intrinsic value” is calculated on the basis of the marginal cost of production, electricity prices, and hash rates. This model does not take into account, at least on absolute terms, the anticipatory effect of the 2020 halving, which, according to a slew of analysts is the behind the price rise.

Nikolaos Panigirtzoglou, the MD in the Global Market Strategy team at JP Morgan stated that Bitcoin breaking through its “intrinsic value” showed signs of mirroring its 2017 bull run. He evidenced this move by comparing the pre-December 2017 slump to the one seen prior to the current bullish swing.

The analyst added:

“Over the past few days, the actual price has moved sharply over marginal cost. This divergence between actual and intrinsic values carries some echoes of the spike higher in late 2017, and at the time this divergence was resolved mostly by a reduction in actual prices.”

With the analyst admitting that the imparting of an “intrinsic or fair value” to a cryptocurrency, much less a volatile one like Bitcoin, is a “challenging” ordeal, a mere JP Morgan acknowledgement of a Bitcoin bull-run is a remarkable sign for the digital assets industry, especially given the bank’s and its CEO Jamie Dimon’s Bitcoin-bashing in the past.

Mati Greenspan, senior market analyst at eToro attested to the same, adding a key point that JP Morgan failed to take into account in their calculation. He stated:



“Great to see JPM finally admitting that Bitcoin has intrinsic value.
Now wait till they understand that miners who run a surplus tend to begin hording.”

Despite Bitcoin slumping at press time, recording a 1.23 percent decline against the dollar, the prospects look positive. After recording a massive gain on 19 May, briefly surging past $8,000 for the second time in a week, Bitcoin created a High-Low [HL] at $7,100, which many analysts look at with glee.

This HL immediately following last week’s pull-back caused due to post-Consensus bears, a Bitstamp sell-order and market correction showed the king coin’s bullish persistence and can even be a foundation for a $9,000 ascendance, defying any “intrinsic value” expectations.





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