Crypto lender BlockFi rolls out zero-fee trading for Bitcoin, Ether, GUSD

Cryptocurrency lending business, BlockFi announced today it would roll out zero fee trading for Bitcoin, Ether, and Gemini USD. Users will be able to trade using their existing cryptocurrency deposit balances. According to BlockFi CEO, Zac Prince, The decision to offer trading on cryptocurrency deposit emerged as a response to customers informing BlockFi that they typically withdraw funds to trade. With a zero-fee model, the company instead plans to monetize the trading business by selling data on users’ trades to market makers that BlockFi counts as its clients. The company also announced today that users will be able to deposit and buy USDC and litecoin beginning December 11 and that the company plans to launch a fiat-to-crypto gateway in Q1 2020. Furthermore, in the second half of 2020, BlockFi plans to launch a crypto rewards credit card.

Why it matters:

• A continued trend we’ve seen this year is exchanges leveraging their positions as central sources of liquidity to provide ancillary services beyond trading. Throughout the year exchanges have rapidly expanded into lending, staking, capital markets and other services. Furthermore, open finance protocols are accelerating the features that exchanges can offer. The convergence of crypto financial services is emerging from all corners of crypto finance including those not primarily engaged in trading such as BlockFi.
• With the introduction of trading, BlockFi now becomes the first cryptocurrency trading platform to offer interest on customer funds. The announcement could prompt more exchanges to offer interest on customer deposits further pushing cryptocurrency exchanges into the realm of traditional banking.