Cryptocurrency is a store of value, and Celsius lets users profit from deposits. This platform is regarded as a blue-chip of crypto interest accounts. But are its conditions the best? Find out in our guide.
What Is Celsius?
Celsius, which was established in New York in 2017, is one of the pioneers. It is a CeFi platform — a centralized company that uses decentralized assets. The provider has a native token (CEL) and takes custody of its users’ assets.
Comparison of Interest Rates
So, how much money can your crypto deposits bring? As this Celsius network comparison shows, the rates are attractive but not the most competitive. How much you earn depends on the asset. The best yield is provided for stablecoins.
Celsius offers 6.2% APY for up to 2 BTC and 3.51% for the rest of your deposit. In comparison, the highest APY on BlockFi is 5%, and it is only available for the first 0.5 BTC. CoinLoan offers more — up to 7.2%.
Any amount of Ethereum gains 5.5% APY. In comparison, the highest rate on BlockFi is 4.5%, and CoinLoan offers 7.2%.
The rates for these deposits are rather competitive. Celsius offers a flat interest rate of 8.88%. On BlockFi, the highest rate of 9.3% is provided for Tether (USDT), while other popular stablecoins bring 8.6%. On CoinLoan, stablecoin deposits bring up to 12.3%.
Key Things to Know
- Unlike BlockFi users, members of Celsius enjoy weekly payouts. They can also request as many crypto withdrawals as they want without fees. These are undeniable advantages.
- The company uses fairly standard security precautions, and it is exposed to the same risks and threats as any other cryptocurrency holder. On Celsius, your funds are secured by BitGo’s multi-signature wallets. The insurance policy for all clients is worth $100 million.
- Celsius does not have FDIC insurance, but it is expected to launch private insurance in the future. There are rumors of third-party providers planning to cover crypto interest accounts for around 2.6% of APY.
- The platform does not have a mobile version, which is a major disappointment for some users.
- If you purchase the native token, you are entitled to a proportional share of 80% of the company’s profits.
- Users outside the US can add around 2% to their APY.
- You can earn competitive interest on trailblazer assets, such as Polygon, Polkadot, and Compound.
How Does Celsius Make Money?
Cryptocurrency platforms rarely provide a fully transparent breakdown of their strategies. They justify this by the need to protect their methods from competitors. Celsius is no exception.
After lending to crypto exchanges and hedge funds, Celsius provides 80% of profits to holders of CEL. Now, aside from taking over the functions of a bank (facilitating loans), Celsius seems to be ready to dip its toes in DeFi, which is more lucrative but riskier.