If you want to earn passive income with your crypto, you've probably heard of BlockFi. This exchange is known for its BlockFi Interest Account, which pays monthly interest on a dozen cryptos and stablecoins.
But BlockFi is also a comprehensive exchange. And with the free BlockFi wallet, you can securely buy, sell, and swap digital assets. Our review is covering the main features, security, fees, and how to decide if this wallet is right for you.
Pros & Cons
What Is BlockFi?
BlockFi is a cryptocurrency exchange that lets you earn interest on your crypto and easily buy, sell, and swap assets. The company began in 2017 and quickly grew into one of the most popular crypto interest account providers.
Currently, BlockFi is dealing with regulatory issues and has suspended new U.S. customers from opening BlockFi Interest Accounts (BIAs). In early 2022, the company was also fined $100 million by the SEC due to registration issues with its lending product.
However, despite recent roadblocks, BlockFi is cooperating with regulators to become compliant. It also plans on releasing BlockFi Yield, an updated version of the BIA, to U.S. customers. Once this happens, BlockFi will once again be one of the best ways to earn passive income with digital assets.
What Is The BlockFi Wallet?
Your BlockFi wallet is a free cryptocurrency wallet where you can buy, sell, and store cryptocurrencies and stablecoins. It's also the wallet where crypto rewards from your BlockFi Rewards Signature Visa card deposit if you're a cardholder.
Like other exchanges, BlockFi's free wallet makes managing your assets and using its exchange much easier. And if you're a BlockFi customer, you automatically get a wallet when you create your account.
BlockFi Wallet Features
The BlockFi wallet is a software wallet that's linked to your main BlockFi account. And despite being an add-on for the exchange rather than a standalone wallet, it has numerous features that help you securely invest in crypto.
Easily Trade Crypto
With BlockFi's wallet, you can buy, sell, and hold cryptocurrencies the platform supports. Currently, BlockFi supports a dozen cryptocurrencies and stablecoins for U.S. customers, including:
Several other cryptos are available for non-U.S. clients as well, including Cardano, Polygon, and Solana.
You can fund your BlockFi wallet by depositing crypto from another exchange or wallet. Alternatively, you can buy crypto with funds through your bank account by using ACH. You only need $20 to begin investing. BlockFi also has a simple trading interface where you enter the type and amount of crypto you want before getting a quote.
Furthermore, BlockFi lets you swap crypto in your wallet, so you can trade various cryptocurrencies around without first converting them to fiat. Your wallet also lets you set up recurring trades. These can be daily, weekly, or monthly trades that execute automatically.
No Minimum Balance Requirement
The BlockFi wallet doesn't have a minimum balance requirement. Trades must be at least $20 in value, which is higher than most exchanges. But you don't need to deposit thousands of dollars or even own crypto to use BlockFi.
Wallet Security Features
One of the most important factors to consider when picking a crypto wallet is security. After all, if you lose access to your crypto wallet or someone accesses your funds without authorization, there's little chance you can reclaim your funds.
Thankfully, the BlockFi wallet has several security features to protect your digital assets. For starters, you can enable two-factor authentication through the Google Authenticator app. Two-factor authentication is available for login as withdrawal requests, so there's multiple layers of security.
Furthermore, BlockFi occasionally asks you to verify your identity to ensure you're the one making withdrawals or account changes. This might seem irritating since you have to upload a photo of government ID and a selfie. But this is a small price to pay to keep your crypto safe.
Finally, the BlockFi wallet has an allowlisting feature that lets you whitelist specific wallet addresses. It takes seven days for a new allowlist address to get approved. This means even someone who's accessing your account without your permission can't just add a new wallet address and immediately drain your crypto.
It's still up to you to protect your password and personal information. However, the BlockFi wallet is safe and has several security features that help prevent unauthorized access.
Simplified Tax Reporting
If you earn income from cryptocurrency trading or sources like crypto interest accounts, you're creating taxable events. This means you need to declare any crypto and NFT income when filing your taxes.
Crypto tax implications can seem overwhelming for beginners. But BlockFi provides customers with two different reports to help with filing:
- 1099-MISC: You receive this form if you receive $600 or more in crypto interest and bonuses in a given year.
- 1099-B Form: You use this form to report your crypto trading activity to the IRS.
The fact BlockFi makes these forms readily available is a perk. The platform doesn't give tax advice or help with tax preparation itself. However, BlockFi has a partnership with TaxBit, a leading crypto tax and accounting software. BlockFi customers get a free TaxBit account, so you can sync your transactions across multiple exchanges to file accurately.
BlockFi Wallet Fees & Limits
Depositing crypto into your BlockFi wallet is free. However, you can pay withdrawal fees and face certain limits depending on the cryptocurrency.
Currently, about half of BlockFi's supported assets let you make one free withdrawal per month. You only pay withdrawal fees on these cryptos for subsequent withdrawals in the same calendar month. As for the other assets, you have to pay various fees whenever you make a withdrawal.
|One Free Monthly Withdrawal||Fee For Subsequent Withdrawals|
|BTC||100 BTC per 7-day period||0.00075 BTC|
|LTC||10,000 LTC per 7-day period||0.001 LTC|
|GUSD, USDC, BUSD, PAX, DAI, USDT||1,000,000 per 7-day period||50 USD|
|No Free Withdrawals||Fee Per Withdrawal|
|ETH||5,000 per 7-day period||0.015 ETH|
|LINK||65,000 per 7-day period||2 LINK|
|PAXG||500 per 7-day period||0.035 PAXG|
|UNI||5,500 per 7-day period||2.5 UNI|
|BAT||2,000,000 per 7-day period||60 BAT|
Withdrawal limits aren't a concern for most investors since BlockFi limits are fairly large. However, frequent withdrawals are expensive because of fees. And the fact popular cryptos like Ethereum have withdrawal fees is a downside.
It's also worth noting that BlockFi says it doesn't charge any trading fees. This is true, although you still pay spread fees that are similar to exchanges like Coinbase and Gemini. Ultimately, BlockFi is similar to other exchanges in terms of trading fees.
Safety & Security
As mentioned, the BlockFi wallet has numerous security features in place to help protect your account. Primarily, this involves using two-factor authentication and whitelisting withdrawal addresses.
Additionally, BlockFi reduces platform risk by diversifying where it holds its assets. To limit liquidity risks, it doesn't lend out all of its assets under management. As of December 2021, 41% of assets were held with third-party custodians. An additional 6% of assets were held at banks and brokers as cash securities or were deployed as investments.
Gemini, a leading U.S. exchange, is also BlockFi's custodian. Gemini holds much of its assets in cold wallets, which are far less vulnerable to theft than hot wallets.
BlockFi funds aren't FDIC-insured, and there isn't digital asset insurance either. But there are several protocols in place to improve account security and mitigate company risks.
BlockFi Wallet Advantages
A crypto wallet can make or break an exchange. Thankfully, there are several perks you get with the BlockFi wallet that also make the platform more beginner-friendly:
- Easily buy crypto with funds from your bank account
- A low $20 trading minimum
- Ability to whitelist wallet addresses for withdrawals
- Automatically generate tax reports for trading activity and crypto rewards
- No minimum deposit requirement
What Are The Drawbacks?
Despite being a free and secure wallet, there are still several downsides to the BlockFi wallet you should consider:
- BlockFi only supports a dozen cryptos and stablecoins
- Some cryptocurrencies have withdrawal fees
- Crypto in your BlockFi wallet isn't able to earn interest through a BIA
Historically, BlockFi has been one of the best ways to earn passive income with crypto. This is also why trading on the exchange and using its wallet was so popular.
Once BlockFi brings its interest account product back to U.S. customers, it will be just as popular. But until then, there are several BlockFi wallet alternatives you can consider to hold your digital assets.
Ledger is one of the most popular crypto hardware wallets. The fact Ledger is a physical crypto wallet is the main difference from BlockFi.
But Ledger also supports over 100 cryptocurrencies, which is much more than BlockFi. And you can even earn staking rewards on up to seven coins at a time through Ledger Live. This gives Ledger the security of a hardware wallet but also lets you generate rewards.
Ledger wallets aren't free, however, which is one downside. Wallets start at $59 for the Ledger Nano S but get up to $149 for the Nano X.
Best For: Earning staking rewards with crypto from your wallet.
Earn Staking Rewards Right From Your Wallet >> Try Out Ledger!
Like BlockFi's wallet, ZenGo is a free cryptocurrency software wallet that lets you buy, sell, and hold crypto. You can also earn interest on your crypto through ZenGo's partnership with Nexo.
Furthermore, ZenGo is implementing more integrations with DeFi and Web 3.0 projects. For example, you can connect your ZenGo wallet to NFT marketplaces like OpenSea, or try out crypto games like The Sandbox.
ZenGo also lets you get paid in crypto through its partnership with Juno. It's slightly more expensive for trading than BlockFi. But you don't pay withdrawal fees except for network fees, which is standard for blockchain transactions.
Best For: Web 3.0 and DeFi enthusiasts.
Find New DeFi & Web 3.0 Opportunities >>Try Out ZenGo!
Coinbase is a leading global cryptocurrency exchange that lets you buy and sell over 100 different cryptos. And you can also earn up to 5% APY by staking different coins on the platform.
Unlike BlockFi's wallet, the Coinbase wallet also supports NFTs and integrates with numerous DeFi apps and projects. Overall, it's one of the most beginner-friendly wallets and exchanges out there.
Coinbase can get a bit pricey for trading fees, but exchange popularity and ease-of-use of its wallet are two major selling points.
Best For: Beginner crypto investors.
Earn Free Crypto After Making Your First Trade >> Try Out Coinbase!
The BlockFi Interest Account is BlockFi's flagship product. But this exchange also has a free and versatile wallet that helps you protect your digital assets.
However, the BlockFi wallet still provides a simple way to invest in crypto. And when the company rolls out BlockFi Yield, its wallet and entire platform will become that much more enticing for investors.BlockFi Bankruptcy Notice -On November 10, 2022, BlockFi announced that it had to suspend withdrawals from its platform due to the FTX liquidity crisis. As a result, consumers should not be using the BlockFi platform. As of November 28, 2022, BlockFi officially declared bankruptcy.