The Best Place to Lend Your Bitcoin!?

I have recently become obsessed with the idea of making a passive income; especially with my bitcoin, ethereum and other cryptocurrencies. Recently the prices of most cryptocurrencies have been surging immensely; making it much more difficult for the average person to accumulate a significant position. This is why it is important to use what you already have as a tool to do this. 

By lending out your bitcoin, ethereum and other coins for a high interest rate that compounds.

When I talk about my crypto income each month I receive the same questions many times? Which service do you use? What are their rates? How much bitcoin do I need to lend to earn that amount?

I will be answering all of those questions with this article and more.  Giving an overview of the services, what they offer, their positives and also their negatives.  Hopefully this will be your one-stop shop for deciding which service to use.

Before I start, I would like to remind you that there are risks to lending out your crypto to a third-party.  They custody your coins, and there is the risk your money could be lost.  So please remember the famous phrase, "not your keys, not your bitcoin." Personally I have done the research and feel very confident in using the services that I will recommend, especially with the type of gains they can present to you.

So without further delay, let's find out where the best place to lend your bitcoin is?!

1) BlockFi

BlockFi is perhaps the most well-known lending service out there for many reasons.  They sponsor a majority of the influencers who will advertise on their behalf.  Also it is backed by some of the largest players in the cryptocurrency market; Coinbase, Winklevoss Capital, Galaxy Digital, Morgan Creek Digital and more.  Being backed by the largest players in the market does add quite a bit of confidence to BlockFi's brand, and in the financial world, reputation and confidence are extremely important.  

Admittedly, BlockFi was the first service that I used when I began lending bitcoin nearly a year and a half ago.  Back then I did enjoy the service but since that time they have improved the service pretty significantly.  For example they finally released a mobile app.  They also have added a few more coins available to lend; now including bitcoin, Ethereum, litecoin, USDC, GUSD, PAX, PAXG, USDT (if you live outside the USA.). They also have increased the interest rates for both Ethereum and litecoin.

The interest rates for their coins go as follows; BTC (6%), ETH (5.25%), LTC (6.50%), GUSD (8.6%), PAX (8.6%), PAXG (5%), and USDT (9.3%) The rates may be changed on a monthly basis depending on market conditions, business etc. But for the most part the rates have remained consistent. 

They have also added the ability to trade on their app as well.  Trading stable coins to bitcoin or other available coins and vice-versa.  I have loved the ability to park my cash in stable coins on BlockFi; let it accumulate with the very nice 8.6% percent interest and then take advantage of the big price drops for BTC and ETH.  It has worked out very well for me. Although there can be a significant price spread at times so please be careful about that.

For example, at the time of writing this; you can exchange 1 BTC for 22.604 ETH. While if I were to make the same exchange on Coinbase Pro I would be able to exchange 1 BTC for 22.665 ETH.  Earning you about $100 extra worth of ethereum.

In the future BlockFi will be offering its own credit card, giving you the ability earn 1.5% bitcoin back in rewards for all purchases.  Something that appeals to many fans of cryptocurrency.  But there is a hiccup to this opportunity.  In order to use the BlockFi credit card you must pay a $200 annual fee, which is quite expensive.  Although to overcome this hurdle they are offering a $250 reward if you spend $3,000 or more within your first 3 months of signing up.  But for me personally, that annual fee is enough to make me look at other options.  

One of the great things about lending with BlockFi is that your interest compounds.  They pay out their interest rewards at the beginning of each month; but the drawback is that they only pay out once a month.  Which is much less than many of their rivals.  A feature they added last year that I really like is the ability to see your accumulated interest rewards. What this means is that each day you can see how much interest you have earned up until that point.

You are allowed 1 free withdrawal for each of your assets on BlockFi, but after that you have to pay a fee.  And also, if you do want to withdraw your funds; there is a 1 day waiting period.  And it is only offered during business days, so if you were to decide to withdraw your bitcoin during the weekend.  It could be quite a while until you receive your funds. 

I do like that BlockFi relies solely on their services to provide the revenue to pay the users who lend with them. I never have felt completely comfortable with a service that offers its own coin.  I do like that they have backing from highly reputable cryptocurrency companies, and that they offer great interest rates.  While I do love the trading that they offer; I don't love the fees that come along with it.  But to be honest, my biggest gripe is that you can't withdraw anytime you wish; only on weekdays.

PRO's = Great interest rates, great backing, constantly improving, trading exchange available

CON's = Withdrawals only on weekdays, once a month payouts, high trading fees

OVERALL = 4.05 /5

You can sign up for BlockFi here!

2) Celsius

Celsius was the 2nd lending service that I used; and there is a lot to like about the service as well.  Compared to BlockFi; Celsius offers many more coins available to lend and usually offering a higher interest rate as well.  Even higher if you earn in the celsius token. 

Here are the interest rates for earning for same-kind interest; BTC (6.20%), ETH (5.05%), CEL (4.86%), AAVE (7.51%), BAT (3.51%), BCH (4.51%), BSV (3.0%) BUSD (10.51%), COMP (4.60%), DASH (5.50%), EOS (4.45%), ETC (3.0%), GUSD (10.51%), KNC (2.51%), LINK (4.51%), LTC (5.05%), MANA (3.51%), Matic (13.99%), MCDAI (10.51%), OMG (3.11%), PAX (10.51), PAXG (5.5%), SNX (13.99%), TAUD (10.51%), TCAD (10.51%), TGBP (10.51%), THKD (10.51%), TUSD (10.51%), UMA (7.01%), UNI (4.01%), USDC (10.51%), USDT ERC 20 (10.51%), XAUT (5.50%), XLM (3.10%), XRP (2.50%), ZEC (3.51%), ZRX(3.51%)

 They are constantly adding new coins to the service, which adds even more opportunities for you to make a passive income.  

Something that I really love about Celsius is that they pay out interest weekly on Mondays.  For me, I'm always excited to receive my interest, and you can still receive a significant amount because it is still a weeks' worth of interest. In my opinion it is much better than the monthly payout that BlockFi offers, which at times can be torture waiting for.  Earning weekly allows you to earn interest on your interest much faster.

Withdrawing from Celsius is amazing.  It is always free for the user; Celsius covers the fee.  Everyone here knows that sending fees can really add up and I have saved more than $100 just from Celsius offering free withdrawals.  It really does add up quickly. Also, you can withdraw at any time. Day or night, weekday or weekend, or even on a holiday.  Just like how the cryptocurrency market is never closed; so too is Celsius.

In my opinion the CEO of Celsius does a much better job making himself presentable to the users by having weekly livestreams and AMA's.  But the most important thing is that he never shies away from the hard-hitting questions.  It does do a lot to help qualm any fears or concerns one might have.  While rival CEO's have been a little more secretive in nature during their interviews; or perhaps I would call it following their PR protocol. 

However there are some downsides to using Celsius as well. There is an inconsistency of interest rates.  While to be fair they often stay in the same range; but the rates are often adjusted on a weekly basic and it can be hard to trust which rate you'll have for the long-term.  However, if the interest rate increases; it certainly helps your cause.

I'm also not a fan of any service that offers its own token and pays interest in that coin.  (yes you can choose to receive in-kind interest instead of CEL) It does give me some caution about the longevity of the service and if I can trust it to be around fo the long-term. I do also wish that they would offer some way to exchange or trade cryptocurrency on the app. 

PRO'S = Weekly pay, Amount of coins, great interest rates, anytime withdrawal

CON's = No trading exchange, offering their own token

OVERALL = 4 / 5

3) Nexo

The third service that I have used was NEXO.  NEXO has a very large amount of coins that you can lend out for interest.  The coins and rates go as follows;

BTC (5%), ETH (5%), NEXO (dividend), XRP (5%),  USDT (8%), USDC (8%), TUSD (8%), DAI (8%) HUSD (8%), EUR (8%), GBP (8%), BCH (5%), LTC (5%), BNB (5%), XLM (5%) PAXG (5%), LINK (5%), TRX (5%).

It does concern me that they offer the same interest rates for most of their coins.  I refuse to believe that the borrowing demand for Bitcoin and Tron are the same.  It makes me worry that they are relying too much on higher fees, loaning rates, or perhaps on their own NEXO token. 

During the last year their mobile app has seen a big overhaul.  In the past the app was very bare-bone and didn't appear professional at all.  It was enough to scare me away from using the service for quite awhile.  But thankfully that has since been updated and it looks leagues better than before.

Something that really differentiates Next from both BlockFi and Celsius is that they pay out their interest daily. This give you the ultimate way to compound your earnings. But with that said, the interest rates are lower than what is offered from their rivals if you want to earn in-kind interest. If you want to receive the largest amount of interest you must maintain a large percentage of your portfolio in the Nexo token.

They have changed their withdrawals to become free and can be withdrawn anytime. Day or night, weekday or weekend. This allows an incredible amount of flexibility.

As I mentioned before, Next does offer their own token and pays a larger interest rate if you portfolio has a large amount of Nexo's token.  Like I mentioned with Celsius, I never feel comfortable when a lending service offers their own token.  And it is even more worrisome that the interest rates for the coins that I'm most interested in are almost always lower than their rivals.

Just like BlockFi, Next does offer the ability to trade your coins for other cryptocurrency, but their fees are extremely high.  Currently on NEXO you could trade 1 BTC for 22.03 ETH.  Compared to receiving 22.604 ETH on BlockFi, or 22.665 ETH on Coinbase Pro.  That means on this trade you would be losing around $900 by doing it on Nexo instead of BlockFi or Coinbase Pro.  

Nexo does many things, but they don't quite do anything amazing yet.

PRO's = daily interest payouts, large amount of coins, free withdrawals, 

CON's = enormous trading fees, low interest rates, Nexo Token,

2.5/ 5

As you can see from my reviews, my scores for both BlockFi and Celsius are extremely close and definitely are my two favorite places to lend out my cryptocurrency.  I recommend everyone to begin looking into lending out your own coins if you feel comfortable with the risk.  It is an amazing way to earn a passive-income, and an even better way to help jumpstart your portfolio growth; especially if you're cash strapped.

But I want to know which lending services you like to use!? Which coins do you lend? What do you like and not like about them?

PLEASE FOLLOW ME ON TWITTER!

As always, thank you for reading!