“In April this year, 76% of customers earned interest from all or part of their bitcoin holdings. By may, this proportion increased to 81%, and by the end of June, 83% of bitcoin holders had begun to actively use their bitcoin to earn interest.” Ariane Murphy, marketing director of mode banking, a UK cryptocurrency financial technology company, confirmed. In fact, we can not only see the trend of higher interest rate in the current digital currency environment, but also earn a stable return on digital assets. So the enthusiasm for digital money is probably not a short-term temporary market performance. ”
the Bank of England kept interest rates at 0.1%, the lowest in the Bank of England’s 326 year history, which also means that depositors’ deposits with many banks are almost non interest bearing. At the same time, the data just released by the office for national statistics showed that the GDP of the UK fell by more than 20% month on month in the second quarter, and the economic recession caused by the epidemic situation was obvious. Many economic uncertainties make the Bank of England fully consider the advantages and disadvantages of negative interest rate, and do not rule out the possibility that the UK will cut interest rate to negative interest rate for the first time. The Bank of England warned investors last month.
in Denmark, northern Europe, negative interest rate loans have emerged. House buyers with loans from jyske bank can borrow at – 0.5%, which means that their monthly payments to the bank will be slightly reduced. Only negative interest rate loans also mean that buyers may need to pay more down payment to obtain loans. For example, after the outbreak of the epidemic, the down payment ratio of house purchase loans in Britain has increased from 5% down payment to 10% or even 15%. At the same time, some European banks began to charge for cash accounts.
in the context of low interest rates, more and more cryptocurrency holders are pursuing cryptocurrency interest accounts, hoping to earn returns by collecting interest on digital assets.
according to Google trend, in the past two years, the search frequency of “interest account” has increased dramatically, and reached its peak in June and July. With 100 as the highest point, the proportion of Internet users searching for “interest accounts” before the epidemic is about 50% to 75%. However, since the outbreak of the epidemic in Europe and the United States in mid March, the search for interest accounts has risen to 75 and remained high.
although many fintech companies started to provide “interest bearing” accounts as early as last year, this trend has accelerated since the outbreak of the epidemic in Europe and the United States in March this year, attracting more cryptocurrency financial technology companies to join in.
Sina Finance and economics learned that mode banking announced in April that they would launch an interest bearing account for bitcoin, which can be purchased and saved directly through the mobile app. The annual interest rate of the savings account is 5%, and the interest is settled weekly through the value of bitcoin. According to the company’s latest statistical report, 83% of bitcoin holders have deposited bitcoin into savings accounts.
similarly, blockfi has launched cryptocurrency savings business, covering almost all popular cryptocurrencies. Bitwala, a financial technology company in Berlin, also offers so-called “passive bitcoin interest” products to 80000 European customers. The interest account offers up to 4.3% annual interest rate, which is also paid on a weekly basis.
the UK encryption wallet platform also launched an interest bearing account for cryptocurrency in May, with an annual interest rate of 4.5%, but this service is not provided to customers in the United States, Canada and Japan.
founded in 2011, it is one of the earliest cryptocurrency service companies in the world, and now it has begun to diversify its business, involving in exchange and lending business. As for the resolution to launch interest bearing accounts, the company’s official announcement also mentioned that the interest rate of traditional savings accounts is very small, and even negative interest rates may exist.
in response to the introduction of interest bearing accounts by many cryptocurrency platforms, coinbase, an American cryptocurrency trading institution, recently launched a bitcoin account borrowing service. Brian Armstrong, CEO of the company, said in March that low interest rates in the European and American markets could be an opportunity for cryptocurrencies.
these cryptocurrency platforms provide the operational logic behind interest bearing accounts, usually in collaboration with other technology companies, which earn returns by lending bitcoin and other digital assets. Unlike traditional savings, bitcoin’s interest is not limited by “fixed-term” and can be withdrawn at any time. However, there are also many cryptocurrency platforms that combine interest bearing accounts with loan business, and institutions launch other derivative services and other traditional financial product modules.
the volatility and unpredictability of cryptocurrency bring great risks to this kind of financial currency. At the same time, because cryptocurrency is not affected by too many stock market shocks, many young investors are willing to add a small proportion of cryptocurrency products to their portfolio.
“if we make a more detailed analysis of the customer base, we can find that for customers born before the 1980s, they are less willing to earn interest through bitcoin than the emerging investors born in the 1980s and 1990s. This was particularly evident in April this year. However, by May this year, this “generation gap” has begun to shrink significantly. Whether it is after 60 or 90, the new thing of making interest on special currency has gradually begun to accept. ” Ariane Murphy made it clear.