The good old days of sticking your crypto into a platform and earning 6% are well... Over!
Platforms such as BlockFi, Ledn and Genesis have cut interest rates primarily on large scale deposits.
These platforms use to pay out 4% - 6% APY on crypto such as Bitcoin however have recently drastically cute these rates primarily for large account of 1 BTC - 20BTC.
While smaller accounts of 1 BTC or less will most likely not see a change large accounts are now seeing a change of 1% o r more. Larger accounts now earning just 0.5% (dang kind of sounds like a savings account bank right now) With that being said I have a firm feeling we might see a mass exodus of Funds from these platforms and instead invested elsewhere.
The main reasoning for this is loans have seriously slowed down. A lot of those liquidity funds are simply sitting in there now doing nothing and waiting to be lent out. In a way you could almost look at this as a pulse of the industry for crypto. However the other side of that is there are MANY platforms providing this and DeFi which means those who want the funds now have plenty of options. When there are plenty of options there are cuts and reductions in order to battle it out over other companies who are doing the same thing. You do this yourself when you go look for a mortgage or a car loan. You look for the lowest possible rate from every lender you possibly can find.
Does that mean the demand for crypto is drying up?
Possibly in the short term yes but as we we all know it doesn't take much for the markets to rally once again. In fact them seem to be hitting a new pace right now. I believe much of this will fuel an alt coin season and one that could last for a very long time.
Bitcoin new supplies are starting to dry up due to the last halving, people hodling it and simple bitcoin that has been lost never to be recovered. It is also SLOW and clunky. Besides be a store of value the blockchain itself really doesn't do much. Instead it's an acting entry point for people to start investing into other crypto projects.
In order for bitcoin to hit a 100% gain it needs to double in price. That's now nearly $120,000 value.
Someone could instead invest a small amount into a new crypto start up project and see 20,000% gains. This is what drives the alt coin season and new project start ups. Bitcoin will continue to be harder and hard to see the massive gains so many have gotten use to. While 7% is no small matter we have been spoiled in the crypto space for a very long time with multiple hundred% gains and thousands of % gains.
Get ready for some mega capital moves into altcoins! But don't invest in every random crazy projects. Do your research first and if it's something you really believe in then consider investing.
*This article is not investment advice and is for entertainment purposes only.
Posted Using LeoFinance Beta