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The 6 Best Platforms to Earn Interest on Bitcoin and Crypto

You can use your crypto holdings to create multiple streams of income. The most common methods are interest bearing accounts, staking your crypto, and contributing to liquidity pools. In this post I’ll cover the simplest option, which is depositing your bitcoin with a crypto bank to earn interest.

How to earn interest on your bitcoin and crypto. Crypto banks are not all the same. They have different bells and whistles. Several are insured, but most are not. There’s a common saying in crypto… “Not your keys, not your coins.” When you deposit your crypto with any of the companies listed below, you are giving control of your private keys to someone else, so do your homework before depositing your tokens and make sure you trust the provider.

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6) Earn Interest on Bitcoin with Celsius Network

Celsius was founded in 2017 and has offices in New York, New Jersey, London and Tel-Aviv. It’s owned by Alex Mashinsky, the inventor of VOIP and founder of telecommunications companies, a commodity exchange and many other startups. He is active on social media and makes a consistent effort to help the little guy and to keep Celsius’ customers up to date with the company and crypto industry.

Celsius is not insured, but is one of the most reputable names in crypto banking. They offer crypto loans with nearly instant approval and have the lowest rates to borrow in the industry. Their rates to borrow are between 1% and 8.5%. They pay 4% on bitcoin deposits and offer the opportunity to earn more, if you choose to receive your interest in their native CEL token.

Celsius Pros

  • Celsius customers can borrow as little as $500 and at rates as low as 1%.
  • Interest on bitcoin and crypto deposits is paid out and compounds weekly.
  • Customer service usually responds to support tickets the same day.
  • Very high 13% interest paid on stable coin deposits (rates are always subject to change).
  • They are transparent and publish the number of users and amount of coins they custody.
  • They’ll lend you money with almost instant approval, using your deposited bitcoin or crypto as collateral.
  • Celsius has an API that integrates with accounting software programs, like Accointing.

Celsius Cons

  • Celsius only pays 4% on bitcoin deposits, while competitors pay up to 6%.
  • As of this writing customers can only access Celsius using a mobile app, but a web-based version is coming soon.
  • Their app is confusing to use.
  • U.S. residents are not allowed to receive interest in their native CEL token.
  • You’re not able to purchase stable coins directly on their platform.
  • Borrowers are not able to pay additional principle each month, making it difficult to pay off your loan early.
  • Paying off my loan in full took 4 days of emailing their customer service and was insanely frustrating.
  • They make it difficult to withdraw funds.
  • They force you to register a single withdrawal address for each token and then it takes 24 hours to make the initial withdrawal. So, if you want to withdraw your bitcoin and send it to more than one wallet, it’s a pain and takes several days. Their service is not suitable for those who actively move money around.

Celsius is my least favorite crypto bank, but still one that most people can consider.

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5) Earn Interest on Bitcoin with BlockFi

BlockFi was founded in 2017 and is headquartered in New Jersey. It’s one of the bigger names in crypto banking and isn’t insured, but is quite reputable. Many hedge funds and large institutions custody their crypto assets with BlockFi. As of this writing they pay 6% on the first bitcoin you deposit and 2% on the amount deposited that’s over 1 bitcoin.

If you need money and don’t want to sell your bitcoin or crypto and incur a taxable gain, BlockFi allows you to post your crypto as collateral and offers almost instant loans (like the other companies mentioned in this post.) The rates to borrow vary between 4.5% and 9.75% depending on the amount you’re borrowing compared to the amount you have deposited in your BlockFi account, known as Loan To Value (LTV).

BlockFi Pros

  • BlockFi is the crypto bank of choice for financial professionals and one of the most reputable names in the industry.
  • Their service can be accessed using their mobile app and by using an internet browser from your Mac or PC.
  • The service is simple to use
  • You can choose your preferred method of collecting interest, ie: bitcoin on your stable coins or more stable coin on your stable coin deposit.
  • They’ll lend you money with almost instant approval, using your deposited bitcoin or crypto as collateral.

BlockFi Cons

  • BlockFi only pays interest monthly, so compounding interest doesn’t happen as quickly as it does with the services that pay interest weekly or better yet, daily.
  • The minimum loan amount is $10,000, while other crypto banks allow you to borrow less than that.
  • You must wire money into and out of the platform to move between stable coins and U.S. dollars.
  • My biggest complaint about BlockFi is that it can take 48 hours to withdraw your funds, but that’s because they’re coming from offline storage and the delay is meant to protect your assets from thieves.
  • No API integration for accounting services, like Accointing.

4) Earn Interest on Bitcoin with Crypto.com

Crypto.com was one of the first crypto banks, originally formed in 2016 under the name, Monaco and rebranded in 2018 as Crypto.com. It has its own Visa card that allows you to spend your crypto and earn cash back. The other crypto banks in this article have credit cards coming out as well, but Crypto.com was the first. Their accounts are insured through BitGo and are held offline in cold storage.

Users can access their service through their mobile app and they support over 30 different cryptos. Crypto.com pays between 1.5% and 8.5% on your bitcoin deposited, depending on how many of their native CRO tokens you hold. If you don’t own any CRO tokens, they pay 1.5% without locking up your bitcoin and 4.5% with a 3 month lockup.

Crypto.com Pros

  • Unlike the other services in this article, the Crypto.com wallet allows users to stake certain tokens to generate extra yield, including Cosmos, Yearn and Compound.
  • Their mobile app is easy to use and has an attractive user interface.
  • You can purchase crypto and stable coins in the app using your debit or credit card.
  • Users can easily swap one token for another using their in-wallet exchange.
  • Interest on deposits is paid out and compounds weekly.
  • They’ll lend you money with almost instant approval, using your deposited bitcoin or crypto as collateral.
  • They offer a credit card that pays cash back in crypto.
  • The company has a strong reputation and accounts are insured.

Crypto.com Cons

  • Crypto.com’s advertised rates seem really attractive, but you must own their native CRO token to take advantage. Their rates are substantially less competitive for those who don’t own CRO.
  • Interest rates do not automatically compound. You must re-elect an interest period.
  • Their service is only accessible through a mobile app. There is no browser-based version.
  • No API integration with accounting services, like Accointing.

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3) Earn Interest on Bitcoin with Ledn

Ledn is one of the newer crypto banks, founded in 2018. They are based in Canada and store deposits offline that are indirectly insured through BitGo. Plus, Ledn pays 6% on bitcoin deposits and up to 12% on stable coins.

Ledn Pros

  • Ledn assets are held offline and insured through BitGo.
  • Loans can be paid off at any time without penalty.
  • They also offer a B2X program, where risk tolerant customers can borrow up to 100% of their holdings to effectively double their bitcoin exposure.
  • Customers can access Ledn using an internet browser or mobile app, and the service is exceptionally simple to use.
  • They’ll lend you money with almost instant approval, using your deposited bitcoin or crypto as collateral.
  • They are the first digital asset lending company to complete a Proof-of-Reserves attestation by a top-25 public accounting firm, Armanino LLP.
  • Ledn clients can anonymously verify that their assets are included in the semiannual reports.

Ledn Cons

  • Ledn pays account interest monthly, while competitors offer weekly and even daily compounding.
  • U.S. residents are not currently allowed to participate in their B2X program and that program has a 2% service fee.
  • Their website and mobile app is so simple, that it made me question the company’s legitimacy.
  • No API integration with accounting services, like Accointing.
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2) Earn Interest on Bitcoin with CoinLoan

CoinLoan is a lesser known crypto bank. It’s based in Estonia where crypto laws are most friendly and definitely one to consider, because accounts are insured and the service is easy to use. They support quite a few different tokens and users can easily swap from one to another using their in-wallet exchange.

CoinLoan’s borrowing rates vary between 4.95% and 12%, depending on LTV and the length of time of the loan. Like Crypto.com, Celsius and Nexo, rates are more favorable for those who own the native token. Their service can be accessed both through a mobile app and internet browser.

CoinLoan Pros

  • CoinLoan accounts are insured, so you can sleep at night and they pay interest on a wide variety of tokens.
  • The service can be accessed using their mobile app or through an internet browser, and it’s easy to use.
  • You can borrow as little as $1000 instantly in stable coin, crypto or fiat.
  • They’ll lend you money with almost instant approval, using your deposited bitcoin or crypto as collateral.
  • Their customer service responds to emails in a timely manner and there is actually a phone number to call!

CoinLoan Cons

  • The biggest drawback to CoinLoan’s service is that interest is paid out and compounds monthly. Other than that, it’s a great service and one of my favorites.
  • No API integration with accounting services, like Accointing.

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1) Earn Interest on Bitcoin with Nexo

Nexo was founded in 2017 and is based in Switzerland. It was co-founded by Michael Arrington and is backed by TechCrunch. Nexo is by far my favorite crypto bank. Users can access their accounts using any web browser or the mobile app, which is super easy to use. They are fully licensed and regulated in the European Union and depositor accounts are insured up to $100k. The company has been featured on Bloomberg, CNBC, Forbes, Yahoo Finance, etc.

Like the other crypto banks mentioned in this post, they’re working on releasing a Visa card that pays cash back in bitcoin. Nexo pays depositors between 4% and 5% on bitcoin and 8% to 10% on stable coins. Rates to borrow are between 6% and 12%. Unlike the other crypto banks, 30% of profits are distributed as a dividend to NEXO token holders.

Nexo Pros

  • Nexo depositor accounts are insured up to $100k, which allows you to sleep at night.
  • The site is super easy to use and funds can be withdrawn right away, just like any crypto wallet.
  • You can remain anonymous and open an account with just an email address.
  • Nexo pays interest daily, so it’s the best place to compound your holdings.
  • 30% of profits are paid out as a dividend to NEXO token holders.
  • There’s a bonus loyalty dividend for long term NEXO token holders.
  • Users can easily swap one token for another using their exchange feature.
  • They’ll lend you money with almost instant approval, using your deposited bitcoin or crypto as collateral.
  • Loans can be paid back at any time and with ease.
  • They send out regular emails that will keep you up to date with the company and crypto industry.

Nexo Cons

  • Nexo has absolutely zero customer service. Don’t expect them to answer any of your questions.
  • U.S. residents are not allowed to receive interest in their native NEXO token.
  • Interest compounds daily, so it’s one of the worst places to borrow from.

Other than those 3 things, Nexo is absolutely great and MY NUMBER ONE CHOICE TO BANK CRYPTO.

Is interest paid on crypto taxable?

YES!!! The above services all offer spreadsheets that can be downloaded to give to your CPA and/or file with your taxes. Celsius Network even has an API that links to accounting software, like Accointing. I highly recommend keeping track of your transactions using a service, like Accointing. The government knows if you own crypto and crypto investors are at higher risk of an audit, so keep track of your transactions and be honest on your taxes.

Celsius, BlockFi, Crypto.com, Ledn and CoinLoan all require you to verify your identity by uploading a driver’s license or passport. Only Nexo allows anonymous accounts, without uploading ID and completing the KYC (Know Your Customer) process.

If you have experience to share or have found a different crypto bank that kicks ass, please leave a comment below!

Matt Nathanson, your online business mentor

Freedom Through Digital Education

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Matt T. Nathanson

  1. Tim Nichols left a comment on March 31, 2021 at 2:45 am

    Great breakdown of the various crypto banking options. Always appreciate your in-depth crypto insight.

  2. Jamison Bellucci left a comment on April 1, 2021 at 9:43 pm

    This saved me countless hours of research. Thanks for giving the facts and being objective so I can decide what works best for my situation.

  3. Victor N left a comment on April 2, 2021 at 9:55 pm

    Great article, I am going to be to taking my crypto investing up a notch with these recommendations.

  4. Warren left a comment on April 16, 2021 at 10:13 pm

    Thank you Matt really appreciate your insights.

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