My Bitcoin strategy involves dollar-cost averaging
on a regular basis and holding for the long-term. Since I am not looking to sell my Bitcoin
for at least a few years, I wanted to find the crypto interest account that would offer
me the best interest rates on my Bitcoin while also keeping costs as low as possible. In order to personally identify the best platform
for earning interest, I decided to try 7 of the biggest platforms in the span of one week,
testing the overall user experience and digging into all the important numbers. So in this video, I’m breaking down the
characteristics of all of these crypto interest accounts to save you the hassle of trying
each one yourself. Before we get into them, I’ll give a quick
intro to how crypto interest accounts work because that is definitely important to understand
before storing your cryptocurrencies on one of these platforms. Then, we’ll take a look at each of the platforms
I tried. For each one, we’ll be touching on the interest
rates available, the supported crypto assets, any costs or fees associated with the platform,
whether they offer exchange or trading services and any standout features that I think should
be mentioned.
After exploring all our options, I’ll share
the one platform I’ve decided to continue using for zero-costs and high-interest on
my Bitcoin. To wrap up, I’ll also touch on some of the
risks of crypto accounts towards the end of this video, so be sure to stick around for
some big picture information on using these platforms. Let’s get started. How Do Crypto Interest Accounts Work? In almost all cases, crypto interest accounts
are able to pay you interest on your crypto assets thanks to a lending relationship. When you deposit crypto onto one of these
platforms, the companies can use your crypto balance to provide loans to other customers,
whether they’re individuals or institutions.
As the middleman, these crypto interest account
platforms will collect interest from the parties who are borrowing the money, and will then
pass some of those profits back to you in the form of regular interest payments. The crypto lending market is still fairly
new, which explains why there can be significant differences in interest rates offered by different
platforms. Ultimately, the interest rates they offer
to users who store their crypto in these interest accounts will depend on how much the companies
themselves are collecting in interest from borrowers. CoinDesk predicts that the spread in interest
rates on both sides will converge over time as technology improves, competition increases
and the diversity of accepted crypto assets grows, which is a stance I agree with. In the meantime, though, the rates offered
by different platforms and the crypto assets they support varies quite a bit. These platforms and their interest rates are
also likely to change quite a bit in the coming months and years, so be sure to verify any
numbers on each platform before you choose to try one out.
Finally, some features and platforms are also
limited by country, so I will be focusing on accounts that are accessible to US residents
and offer high flexible Bitcoin interest, because that’s what I’m personally looking
for. However, I will be sure to highlight other
features along the way in case you’re looking for something slightly different in a crypto
interest account. Now before we jump into all these crypto interest
accounts, I hate to be that guy, but because I do use this channel as a source of income,
I’ll let you know that there will be referral links for all of these platforms in the description.
If you want to try any of them out for yourself,
you can use those links to score some free Bitcoin and support me in the process, which
I would greatly appreciate. Coinbase / Coinbase Pro
Up first we have Coinbase, which is arguably one of the most recognizable cryptocurrency
exchanges out there. Now technically Coinbase is not a crypto interest
account, because at the time of this video, they only offer interest on USDC, at a laughable
.15% APY. However, they do offer staking on a small
selection of coins, with various lock-up periods and balances required for each.
They do not offer any sort of interest on
Bitcoin, so Coinbase is not even a consideration for me. But I really wanted to mention Coinbase because
it’s probably the platform that most people use to get into crypto and make their first
purchase, and I want to advise against that. The problem with Coinbase is that their fees
are super expensive. In addition to a .5% spread on cryptocurrency
prices, they’ll charge you a minimum of 1.5% on any purchases or sales. If you’re dollar-cost averaging over time,
especially with less than $200 at a time, you’re going to get much less Bitcoin for
your money than you could elsewhere. Then, you’ll have to pay fees on any withdrawals
if you want to move your Bitcoin to an interest account.
This problem is somewhat alleviated by using
the Coinbase Pro platform, which charges a maximum of a .5% fee on trades. I used this for a while and then I realized
there were even lower cost alternatives to Coinbase pro, which we’ll cover later in
this video. In short, Coinbase doesn’t offer interest
and costs all-around are super high, so do yourself a favor and use another platform
for your crypto activities. BlockFi
Next is BlockFi, which, similar to Coinbase, is most likely everyone’s first experience
with crypto interest accounts. I’ve used BlockFi in the past, and it’s
a pretty solid choice for a simple crypto interest account. BlockFi currently supports a short list of
cryptocurrencies, but the rates are decent with 5% on Bitcoin and a generous 8.6% on
stablecoins at the time of this video. All interest accrues daily and is paid out
on a monthly basis in the currency of your choice, with no minimum balances required. Because of the simplicity of the app and it’s
reputation, I think Blockfi is a great starter account for earning crypto interest.
However, it becomes less appealing the more
crypto you hold. As you can see, their tiered interest rate
system means you’ll only earn the highest interest rates on the first portion of your
holdings. If you happen to hold more than .5 Bitcoin,
your interest rates will be cut to 2% on any additional Bitcoin, and cut even further if
you hold more than 20 Bitcoin. So as someone who hopes to own more than half
a Bitcoin, I would like to see that rate apply to my entire portfolio, but if you hold less
than this you may not need to look any further.
When it comes to withdrawals, you can make
one at any time as long as you meet the withdrawal requirements set by the app. Most users experience withdrawal times of
one to two business days since each request is manually approved, so keep that in mind
if liquidity is a concern. Additionally, BlockFi charges withdrawal fees
that can add up if you are withdrawing small amounts of Bitcoin on a frequent basis. They do, however, offer one free withdrawal
per month, so if you’re a long-term buy-and-holder like me, fees shouldn’t be too much of an
issue.
BlockFi also offers trading services if you
want to keep all of your activity in one place. You can deposit USD into BlockFi using a free
bank transfer, which will be automatically converted into a stablecoin equivalent. Then, you can use that stablecoin balance
to trade for Bitcoin or one of the other supported assets. Although they claim to have no trading fees,
I’ve noticed that the listed market price for Bitcoin tends to be up to 1% higher than
on other exchanges, which means they’re actually charging you a higher price to make
that trade within the app. So while it appears to be lower cost than
something like Coinbase and offers some convenience, I think you’re still better off purchasing
crypto elsewhere for maximum cost savings.
The stand-out feature for BlockFi, when it
becomes available, will be the BlockFi credit card. In addition to offering a competitive and
unlimited 1.5% back in Bitcoin, on top of other bonuses, owning the BlockFi credit card
gives you some valuable benefits within the app. First, you’ll get an extra 2% interest on
your stablecoin balances, bringing them to an impressive total of 10.6% APY.
However, this caps out at $200 which means
it would not apply to any balance over $10,000. You’ll also get .25% back on any Bitcoin
trades, which will help cushion some of that price discrepancy when trading within the
app. This caps out at $500 per month, which would
require $200,000 in trading volume, so that’s a pretty high limit. To me, the credit card is the biggest reason
to use the BlockFi app, especially if you want to earn interest on stablecoin balances. Without it, the interest rates aren’t that
competitive, and with a limited selection of supported crypto assets, Blockfi doesn’t
offer much else to stand out as the leading crypto interest account, except for its solid
reputation. Gemini
Up next is Gemini, which is first and foremost a crypto exchange that recently began offering
other features and expanding its ecosystem. To quickly touch on the exchange side of things,
Gemini offers both mobile and web-based exchange platforms, with varying fees on each.
On the mobile app, the fees will pretty closely
resemble Coinbase, but if you use their ActiveTrader tool, which is the more advanced trading platform,
you’ll pay a maximum of .35% which beats the rates at Coinbase pro. Plus, any funds you transfer into Gemini via
bank transfer are available for trade immediately. For these reasons, I’ve recently started
using Gemini instead of Coinbase to purchase crypto. But let’s get into their interest account,
which is called Gemini Earn. Once you open an account, you have to transfer
your crypto into the dedicated “Gemini Earn” wallet, which is different from the trading
wallet where you’ll purchase, send and receive crypto.
So where most apps will start paying you interest
by default, you have to manually make the decision to hold your crypto in the Gemini
Earn section to receive interest on Gemini. Within the account, interest rates aren’t
anything to write home about, but they do support a pretty wide range of crypto assets
and there are no minimum balances required. On Gemini Earn, interest is paid out every
day, which gives users a great opportunity to get that compounding going as quickly as
possible. Bitcoin currently comes with a 2.05% interest
rate, and most other coins fall in the 1 to 3% range, while their native GUSD stablecoin
has the highest rates at 7.4% APY. So in terms of interest rates, you’re going
to find better opportunities on BlockFi and the other platforms we’ll cover. Plus, Gemini only lets you earn interest in-kind,
meaning in the cryptocurrency you’re holding, while BlockFi lets you earn interest on any
of its supported currencies.
Gemini Earn looks to be pretty liquid with
the ability to withdraw your crypto back to your trading account at any time, although
there is a disclaimer that it may take up to 5 business days in some cases. In my experience, these transfers happened
instantly, and it seems like that can be expected in most cases. On a related note, if you want to withdraw
your crypto out of the Gemini app, all users get 10 free withdrawals per month. So if you’re dollar-cost averaging into
Bitcoin or any other currency throughout the month, you can do your purchasing on Gemini
and withdraw to other crypto interest accounts without any fees, which is really awesome. The last thing worth mentioning is that like
BlockFi, Gemini has a credit card coming soon. The details are kind of vague at the moment,
but it offers up to 3% crypto back depending on the spending category.
A unique feature here is you can redeem these
crypto rewards in any currency supported on Gemini, whereas BlockFi currently only pays
rewards in Bitcoin. However, the Gemini card doesn’t give you
any sort of benefits with Gemini Earn or on the Gemini exchanges, so there’s not much
advantage here unless you just want a crypto rewards card. Overall, I find Gemini to be a great alternative
to Coinbase and Coinbase Pro, and the built-in Gemini Earn account and coming credit card
makes it a solid one-stop shop for purchasing, holding, and earning both interest and rewards
in crypto. Personally, Gemini has become my new on-ramp
for crypto purchases, but the Gemini Earn account doesn’t offer anything great to
keep me on the platform for Bitcoin interest. Crypto.com
Next up, we’ve got crypto.com, which offers an exchange platform, an interest account
and prepaid visa cards with considerable rewards.
However, this is the first of a few platforms
that really pushes users to hold the native token to get full benefits, in this case,
the CRO token. And to be fully transparent, this is the one
app I didn’t make a deposit into and extensively play around with because of how important
the CRO token is. The crypto earn program looks great on the
surface, as they’re advertising up to 8.5% on cryptos, including Bitcoin, and up to 14%
on stablecoins. They also support an impressive selection
of crypto assets, which is great if you’re looking to get interest on something a little
less common. Interest accumulates daily and is paid out
on a weekly basis in the same currency that you deposit. Here, you can see their highest reward rates,
which includes the advertised Bitcoin at 8.5% annually. However, if you notice at the top, there are
two requirements to get these rates: first, you must agree to lock in your crypto for
a 3-month term.
Second, you must be staking at least $40,000
worth of the native CRO token. I don’t know about you guys, but I don’t
have $40,000 that I’d like to put in another currency just to boost my interest rates. For those of us who will only be staking a
little bit of CRO token or even none at all, these interest rates drop by 3-4%, bringing
the Bitcoin interest rate to 4.5%, which is still less than BlockFi – albeit without that
.5 Bitcoin rate cap. But again, this also requires that you lock
your crypto for 3 months at a time.
As a long-term holder, I wouldn’t have a
huge problem with this, but it is frustrating that you have to jump through so many hoops
to get these rates. Without locking into a term, interest rates
drop another 3-4%, leaving us with 1.5% interest on our Bitcoin, which is now also worse than
Gemini. Furthermore, crypto.com doesn’t really meet
you halfway with any other features. It requires a minimum deposit of .005 Bitcoin,
which at $40,000, is about $200. And while the Bitcoin withdrawal fees are
fairly reasonable, it doesn’t offer any free withdrawals like other platforms. To touch on their exchange, crypto.com offers
pretty competitive trading fees at about .4%, which is just between Coinbase Pro and Gemini
Active Trader. You can get discounts on these fees with more
trading volume or by staking the CRO token, but keep in mind the CRO discounts require
you to pay all your fees in CRO and also accept them as a rebate to earn that discount.
Last, their crypto Visa cards seem like a
pretty good deal, with up to 8% back in the form of CRO tokens. But again, to get the most of these benefits,
you need to stake up to $400,000 in CRO with a minimum staking period of 180 days. So again, they’re really pushing you to
buy and hold their native token, and a lot of them, to get any significant benefits within
the crypto.com ecosystem. Overall, I really liked the interface of the
crypto.com app, but I feel like I need to own a ton of the CRO token to make it worth
my while.
If you believe in this company and feel like
allocating cash to their token, and also have a ton of cash available, then it may be an
appealing option for earning crypto interest, trading and getting a crypto-linked Visa card. But as someone who is really focused on simple
Bitcoin interest rates and low fees, I think we can do better. Voyager
Next we’re looking at Voyager, which is a simple, no-frills crypto interest account
available exclusively on mobile. Voyager supports a decent selection of crypto
assets, but interest is only available on a handful of these coins. However, it looks like it offers fair interest
rates on these coins, with 6.25% APR on Bitcoin, 9% on USDC and about 2-5% on most other assets. These rates are updated every month, so you
can easily check to see what the latest rates are.
The catch is, all of these require a monthly
balance. For instance, to earn interest on Bitcoin,
it requires .01 Bitcoin, which at $40,000 is about $400. So unfortunately, the $100 I put into this
app to test it out did not qualify me to earn interest. On Voyager, all interest accrues daily and
is paid out at the end of the month in the currency that you have deposited. Unlike Gemini, Voyager will automatically
pay interest on whatever balance you have within the app. So even if you use your balance to trade throughout
the month, you can still accrue interest on your daily balance.
They also say that you can make instant withdrawals
at any time, and disclaim that withdrawals on these interest earning assets may take
up to 7 days in some cases. When you do decide it’s time to withdraw
some Bitcoin, Voyager will charge a flat rate of .0005 Bitcoin, which is about $15 to $20
at current prices and can definitely add up if you’re not careful. As I said, there’s not much else to the
Voyager app, but they do offer a unique brokerage service. Instead of functioning as an exchange and
selling you crypto directly, they use an order routing system that allows them to facilitate
commission-free, no cost trades.
When you place an order through Voyager, they’ll
actually go out and seek a trade with the best possible price on other exchanges. They promise to secure whatever price they
quote you for the sale, and if they’re able to beat that price, you’ll both get a piece
of the savings. In other words, you get crypto for a slightly
lower price, and they keep some of the difference, which is where they’re able to earn money
on trades. Digging deeper, however, I found that the
bid-ask spreads on Bitcoin, as well as other cryptos, were pretty wide.
This means that they’re probably showing
slightly higher prices and lumping their fees into these prices, so that they can offer
you “commission free” trades while actually collecting profit behind the scenes, but it’s
difficult to quantify how much you can actually expect to be lumped into trades on a regular
basis. I’m also pretty disappointed with the appearance
and functionality of the app. I know I’m being picky, but as a mobile-only
and mobile-focused platform, you’d think they’d make the app a little stronger. Ultimately, since their commission free trades
aren’t as low cost as they seem, I’ll continue trading elsewhere, and that means
the only thing keeping me around is the interest rates which are pretty much on par with everything
else we’ve looked at, and lack any unique advantages.
If you’re really going for a bare-bones,
simple crypto trading & interest solution, Voyager could be a decent option, but I’m
holding out for something better. Celsius
Our next platform is Celsius, which has positioned itself as more of a crypto banking product
than anything else. It doesn’t offer any sort of exchange features,
purely interest and borrowing accounts. Like crypto.com, your rewards on the Celsius
platform can be boosted with their native token, CEL, but I think they’ve handled
it a little better than the CRO token.
In addition to paying nearly 9% on stablecoins,
Celsius pays 6.2% on Bitcoin and offers pretty generous rates on over 25 other crypto assets. Plus, there are no minimum requirements, no
holding periods, and no fees of any kind across the board, even when you want to withdraw
your assets. However, I should highlight that this 6.2%
on Bitcoin only applies to the first 2 Bitcoin, anything extra is reduced to a 3.51% interest
rate, which is still superior to other tiered systems we’ve seen. With Celsius, interest accrues daily and gets
paid out every single week in the currency you’ve deposited.
When it comes to the CEL token, US residents
have somewhat limited access. CEL isn’t publicly available for US residents,
and that means that we can’t enjoy the benefits it provides on the Celsius platform. For example, users holding at least 25% of
their portfolio value in CEL tokens would ordinarily receive an extra 25% boost in interest
rates when selecting to get paid in CEL tokens. There are some roundabout ways for US residents
to purchase these tokens, but unfortunately, just owning them will not help you earn this
extra interest until their policies change. Either way, Celsius offers some pretty competitive
interest rates with no fees anywhere to be found. The Celsius app is also my favorite app I’ve
tried so far, with a great interface, tons of security features and easy access to tax
documentation. With no costs to transfer in or out of the
app, Celsius looks like a solid option for collecting 6.2% interest, which is about the
highest we’ve seen so far, and it won’t cost anything to change your mind and move
to a different platform if a better opportunity arises.
Nexo
Our final crypto interest account is Nexo, which is another exchange and banking hybrid
that offers additional features through its native token, the NEXO token. Nexo has a pretty decent list of supported
assets, but the most impressive aspect is the high interest rates across all of them. You’re earning at least 6% interest on everything,
including Bitcoin, with a strong 10% interest rate on stablecoins. You can even deposit fiat currency like euros,
US dollars or british pounds and earn 10% interest on those, too.
These are advertised as the base rates, however,
to get them in full, you have to both hold the native Nexo token in your portfolio and
lock up your crypto for a fixed period of time without any withdrawals. As you can see here, you have to have at least
10% of your portfolio allocated to the NEXO token to earn the highest base rate of 5%
for Bitcoin and other cryptos. This is much lower than the percentage requirements
set by crypto.com and Celsius network, so it is a little more attractive if you don’t
mind allocating to the native token. If you’re willing to lock up your crypto
for a fixed rate term, you can get an extra 1% to 3% interest on your coins, which for
Bitcoin, can bring your total interest up to 6%. You can increase interest rates by 2% across
the board if you are willing to accept your interest payments in NEXO tokens, which unfortunately,
is not an option for US residents.
Just like celsius token, NEXO is not publicly
available to US residents, and due to its recent classification as a security they could
not pay out interest in NEXO to us. However, this may have changed with an update
to the NEXO token structure, and could become a more attractive option for US residents
in the near future. In the meantime, I purchased a few NEXO tokens
to test out the features of the account, but I’m still not able to earn that 2% interest
rate boost. On the bright side, Nexo pays out interest
daily, which means faster compounding on your crypto holdings. There are minimum requirements to start earning
interest, with Bitcoin at .001. However, this is only about $40 worth of Bitcoin
at $40,000, which is a much lower limit than some of the other requirements we’ve seen.
At the time of this video, it doesn’t look
like there’s any maximum or tier system to interest, so you can earn that full 5 to
8% Bitcoin interest if you have larger Bitcoin holdings. All NEXO users get 1 free withdrawal per month,
with up to 5 free withdrawals if you are in the highest loyalty tier. So pretty flexible here if you want to test
out the platform and see how it goes. Nexo also has a built in exchange feature,
but it is not really a cryptocurrency exchange like you find on Gemini or Coinbase. It’s technically a swapping tool that you
can use to exchange between a variety of market pairs. There are no fees associated with this tool,
but you should definitely double-check and make sure you are getting the best price if
you decide to use it.
Nexo also uses a smart order routing system
like Voyager, so they may have fees baked into the prices displayed. Again, since Nexo offers free withdrawals,
it might be smarter to just withdraw and trade elsewhere if you can secure more favorable
prices. The last feature I want to highlight about
Nexo is their Nexo card, which is a little different from the credit cards offered by
Gemini and Blockfi, as well as the Visa card offered by Crypto.com. With the Nexo card, you’ll use your crypto
balance as collateral, and you’ll receive a line of credit based on your holdings. In contrast, Gemini and Blockfi are traditional
credit cards and the Visa card by Crypto.com is more of a pre-paid debit card that you
have to fund to use.
What sounds really appealing to me is that
this card will offer 2% back on absolutely everything in the form of either Bitcoin or
Nexo tokens, which beats both BlockFi and Gemini cards. It’s not available to US residents yet,
but I will definitely be taking a closer look when the time comes for the rewards alone. Overall, I think Nexo offers a great opportunity
for the highest interest rates, but only if you’re comfortable holding the Nexo token. The Nexo token balance requirements are more
reasonable than competitors with native tokens, but that might not be enough for everybody. If Nexo token and Nexo card become fully available
for US residents, I think this platform will be a much more appealing option. But until then, it’s just about on par with
most other interest platforms. My #1 Crypto Interest Account
After testing all of these crypto interest accounts, I’ve decided to stick with just
one, and that’s Celsius network. After making these comparisons, Celsius is
the clear winner with a 6.2% interest rate on a balance of up to 2 Bitcoin. I’ve got a ways to go before I accumulate
more than 2 Bitcoin, and this is currently the highest interest rate I can achieve aside
from Voyager at 6.25%, which is a pretty small difference to use a platform I really didn’t
care for.
I was really impressed by the security features
of Celsius, the smooth design and use of the mobile app, and all of the great feedback
I’ve seen regarding the company’s transparency and leadership. Plus, with no minimum balance requirements
and unlimited free withdrawals, I’m not risking anything by trying it out for now
and keeping my eyes out for other opportunities. They also have incredibly low interest rates
on loans if I ever decide to borrow against my crypto, which I don’t have any plans
to do yet, but it is nice to know. Although I’ve decided on Celsius for now,
I’m also going to continue playing around with Nexo.
I don’t love that I have to hold their token,
but if US residents get access to that token, it could significantly boost my interest rates
to make things much more competitive. I’d also love to get my hands on a Nexo
card, or on any crypto rewards credit card for that matter, so I’ll definitely dive
deeper with Nexo if and when that becomes available. But Voyager, Crypto.com, Coinbase and BlockFi
are definitely out for crypto interest. I’ll continue using Gemini for low cost
purchases, and let my interest start compounding on Celsius while I test Nexo further. Crypto Interest Account Risks
With that, I’ll quickly cover some of the risks of crypto interest accounts so you can
continue exploring your options and making the decision that’s right for you. First, the safety of your Bitcoin is an obvious
risk, as it’s only as protected as the platform it’s being held on. Some platforms will hold your crypto in cold
storage, and some use 3rd party custodians, so you have to check each platform to determine
how they’ll protect your assets.
Similarly, unlike traditional banks, these
interest accounts do not fully insure your assets. If there’s a major security breach and your
crypto is lost or stolen, you may only get a fraction of that reimbursed, if any, depending
on the platform’s insurance policies. Finally, you have to trust that the platform
lending your money is making responsible business choices. If they’re lending to riskier customers,
there is a potential that the borrowers default on the loan and you don’t receive your money
back at all. I think this would have to be a pretty widespread
issue on a particular platform for it to happen, and likely wouldn’t happen to just one unlucky
individual, but that’s another reason to investigate the transparency of each platform.
I know I didn’t get to dive into all of
these details with each of the platforms I covered, so please let me know in the comments
if you would like me to explore any of these platforms or topics further in another video. As someone who was super overwhelmed navigating
all of my crypto interest account options, I hope you guys found this helpful in identifying
the platform that’s right for you. I appreciate your viewership, especially if
you made it to this point in the video, and if you choose to come back I’ll see you
in another video next week..
