BlockFi halves interest rates for major cryptos Solana, Avalanche, Polygon

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BlockFi, a popular crypto lending platform, has cut interest rates in half on some of the market’s cryptos held by non-US customers.

Interest rates on Solana deposits will decrease from 10% to 5% starting June 1, while Avalanche (AVAX) and Polygon (MATIC) rates will decrease from 10% to 5% and 11% to 5%, respectively. The company explained its proposed changes in a post on May 26th.

BlockFi’s move reflects the momentum in the crypto market. BlockFi, which lends funds to institutional investors and returns returns to their clients, posted a 1,711% increase of assets under management in 2020. As of March last year, BlockFi held $14.7 billion in its BlockFi interest account.

But that growth has since slowed as institutional investors borrow less amid a drop in crypto prices. This falling demand is not unique to BlockFi, as the current market environment is limiting the ability of lending platforms to offer customers higher returns.

BlockFi used to offer 6.25% for users holding more than one BTC, but now it only offers 1% to 3% on up to 0.35 Bitcoin and 0.1% more on larger amounts, The Block recently reported . Thursday’s BlockFi announcement made no mention of BTC price changes.

Joe Hickey, BlockFi’s head of trading, recently told The Block that despite falling interest rates, he expects yields to recover.

“People keep investing and I think it’s kind of a short-term phenomenon and we’ll see yields pick up again in the second half of the year,” he noted.

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