Bitfinex offers 6% annual interest on popular crypto, directly competing with banks

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Last Updated on 1 October 2020 by CryptoTips.eu

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / [email protected]
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In January, when Mashable broke the story about a thing called DeFi being some sort of lending mechanism for crypto, classic banks stood up and took notice. In May, when Bitcoin had it’s halving and broke through the $10,000 mark repeatedly, there was a whisper of safe haven. In July and August, when crypto had its altseason, the buzz really started to grow and classic investors entered into the cryptosphere.

Advertentie.

Long Term Store of Value

But now, Bitfinex is taking the fight directly to them, offering a 6.2% annual interest on any holder of three of the most popular crypto coins.

Thanks to a partnership with Celsius Network, Bitfinex customers who have a crypto account with Bitcoin, Ethereum or XRP can earn a hefty yearly interest rate, ranging from 4,91% to 6.2%. Considering that you get less than 1% for your classic savings account with your bank, an enticing offer.  

Bitfinex CTO Paolo Ardoino explained:

We expect this offering to appeal to customers that have bought Bitcoin as a long-term store of value, and who also want to earn on their assets while they hold.

Iceland

There is a caveat though, namely that the offer at this point seems to good to be true. Don’t get me wrong, it is an enticing sell, but the last time any organization offered a 6% yearly interest rate on a “bank” account (if that is what you want to interpret Bitfinex account as), the time was 2007, the country was Iceland and droves of Dutch and British people got enticed by the offer.

YouTube video

At the time, Dutch and British banks offered only 1.5% on your savings account as there was more money to be made in stocks. Europeans invested massively in Iceland’s banks, which all went bust during the 2008 crash next year.

Matt Damon narrated the whole ordeal in the 2010 Charles Ferguson documentary Inside Job which is free to watch on YouTube. The first few minutes tell the predicament that the Icelandic banks founds themselves in.

For all the above, I would have advised Bitfinex to start out their offering with a 2 or 3% interest rate, because you know what they say, if something looks too good to be true.