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BlockFi has formally announced the introduction of BlockFi Institutional Services. Previously a retail hodler-focused company, it is now introducing enterprise-grade financing solutions for digital assets for institutional investors like market-makers, funds, exchanges, and family offices.

The move represents an about-face for the lending platform, which decided to limit the interest rates on bitcoin deposits over 25 BTC and Ether deposits over 500 ETH to two percent within months of launching. These limits were later reduced even further, with interest on more than 5 BTC paying only 2.2 percent and deposits of over 200 ETH earning 0.5 percent. 

Initially explaining the maximum rates BlockFi interest accounts would attract, the company declared in a March blog post that:

“From the start, BIA was meant to be a consumer-focused product. While we greatly appreciate the widespread adoption of BlockFi’s products, our mission is to provide the average crypto investor with the tools to build their wealth and invite new participants into the ecosystem…. These small adjustments are necessary to ensure that BIA can support as many clients as possible while maintaining the high quality services we provide to the average crypto consumer. We anticipate that our minimum interest-earning deposit amount will drop in the coming months.”

However, BlockFi did not anticipate the level of demand it would attract when it launched from institutional investors like hedge funds and VC firms, who sought returns on their crypto investments BlockFi (originally) offered; the security of their deposits being insured; and the custodial arrangements with Gemini.

The institutional demand has proven too enticing to overlook. The company had a successful Series A funding round in August, led by Peter Thiel’s Valar Ventures, alongside Winklevoss Capital, Morgan Creek Digital, Akuna Capital, and additional funding from original backers Galaxy Digital Ventures and ConsenSys Ventures. 

Today, the company announced the launch of BlockFi Institutional Services, which will offer “bespoke financing solutions that allow clients access to a variety of cryptocurrencies for executing trading strategies and hedging their positions, amongst other opportunities.”

As founder Zac Prince stated: “Our priority in the institutional space is to build a secure, best-in-breed platform for institutions to work with BlockFi in a way that lets us pass along economic benefits to our highly valued BlockFi users. We want to be there to help market-makers and funds enter and expand their crypto businesses, which will benefit the entire crypto ecosystem as a whole. Institutional clients can expect to benefit from the same client dedication and obsession we show for our retail clients.”

BlockFi Institutional Services has customers that include some of the largest and most credit-worthy market-makers and funds in the U.S. and Asia. These include Block8 Ventures and Climb Capital. 

The company’s mandate is geared toward adoption among institutional investors. Their stated aim is “to roll out products and services that make it convenient, compliant, and secure for institutions to enter the digital asset financing space.” It is expected they will move into integrating the services of administrators, custodians, and auditors for institutional clients.

BlockFi’s repositioning should come as little surprise given their recent study of crypto interest among institutions. As reported by Crypto Briefing earlier this week, the lender found crypto engagement among institutional players to be low, but growing, with only 201 private funds out of 60,000 in the U.S. with crypto exposure – a miserly 1.3 percent. Given their enthusiasm for insights into institutional interest, attracting them was a logical next step for the company.

BlockFi’s lending rates remain attractive for bitcoin (for amounts under 5 BTC at least), paying out 6.2 percent compound interest annually. Given their security and corporate credentials, their retail-focused products were always going to eventually appeal to institutional investors.

The post BlockFi Introduces Suite Of Institutional Investor Services appeared first on Crypto Briefing.

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