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Bitcoin Reserves on BlockFi to New Lows as BTC Price Sluggish

Bitcoin Reserves on BlockFi to New Lows as BTC Price Sluggish
The bitcoin reserves on BlockFi – the popular lending and borrowing platform enabling users to receive interest – have declined to an all-time low. This, combined with recent reports claiming that whales have started to sell off their positions, raises the question of whether large BTC investors may have averted from HODLing.
BlockFi BTC Reserves Decline
Founded in 2017, BlockFi allows investors to lend their cryptocurrency assets in order to gain interest. However, it seems that large investors don’t find the APY provided by the company incentivizing enough lately, and they have withdrawn large portions of their positions.
Data from CryptoQuant reveals that the bitcoin reserves on the platform have decreased substantially in the past several weeks to new all-time lows.
According to the analytics company’s researchers, this means that “whales and high-net-worth individuals are not interested in collecting interest on BTC” at the moment. They added that “this indicates HODLing is not the whales’ incentive right now.”
Bitcoin Reserves on BlockFi. Source: CryptoQuant
Although this narrative might not be popular, it actually received support from previous analyses. As CryptoPotato reported earlier, whales, meaning large wallets containing between 100 and 10,000 bitcoins, have indeed started to dispose of their assets.
Or Maybe It’s the Competition?
Lending your bitcoins through a centralized platform to other users to earn up to 5% APY sounds compelling, but a lot has changed in the market in the past year or so for BlockFi.
On the one hand, the company reduced its interest rates as BTC’s price started to appreciate, and the 5% APY now (for relatively small players holding up to 0.5 BTC) can be matched on other platforms.
Larger holders, especially whales, can benefit from 0.5% APY. Although this is still higher than what most banks offer for storing funds, it’s not sufficient in the cryptocurrency market for some.
Numerous DeFi platforms offer more lucrative options. As such, it’s not really a surprise that over 1% of all BTC is now in the form of wrapped bitcoins (WBTC). Despite the hidden risks of decentralized protocols, investors are increasingly more open to earning interest through them.

1% of all BTC has been wrapped into $WBTC !
— WBTC (@WrappedBTC) June 7, 2021

After all, even the prominent businessman Kevin O’Leary recently bragged about earning between 4% and 9% APY on his BTC stash (which is safe to assume is bigger than 0.5 BTC) through DeFi platforms. shares this Contents always with License.

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