What are the differences between Gemini and BlockFi? Over the years, the number of crypto exchanges has increased exponentially and some of these are more prominent than the others available in the market.
Two such names are BlockFi and Gemini. Though both these platforms deal with cryptocurrencies, there is a lot of difference in the way of operation as well as in several other aspects.
This article entails all those differences that will help you to make the right choice among the two based on your crypto needs with an enhanced knowledge.
With the increasing popularity of cryptocurrencies and a mainstream adoption around the corner, trading and investing in them is in vogue now.
However, without a reliable and efficient platform, going ahead with your ventures safely and productively will not be possible.
That is why you will need a reliable companion – a crypto exchange – by your side to take full advantage of this impetus and enhance your chances of making more profits.
For an effective comparison between these two crypto platforms you will need to consider their trading speed and options provided, the fees charged and benefits provided, the trading tools offered and much more.
For example, Gemini may be a good platform to earn more cryptocurrencies but they lend through unsecured credit but BlockFi asks for as much as two times the amount of loan as collateral.
Here comes the risk and security aspect. There are lots of such other aspects to consider for a proper head-to-head comparison between BlockFi and Gemini. This article offers an in-depth comparison of these two platforms just for you.
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10 Differences Between Gemini and BlockFi
BlockFi is a platform that offers crypto lending services and acts as a reliable custodian allowing the users to earn interest on their crypto assets but it has a pretty limited exchange. However, it offers a crypto rewards card to the users.
On the other hand, Gemini is a crypto exchange that is more focused on the security aspect while offering a wide range of services related to crypto to its users along with reasonable staking rewards.
It supports an imposing number of crypto coins and fiat currencies and also offers institutional services that are quite impressive.
Here are the differences between the two platforms which will provide you with an in-depth insight and help you to make the right choice eventually.
1. Basics
The most significant difference between Gemini and BlockFi is that BlockFi is primarily a Bitcoin custodian and a one-stop-shop for different financial services.
Based in New Jersey in the US, BlockFi is one of the few crypto exchanges that abides by and operates within the peripheries of the US state and federal regulations.
However, just like most of the other crypto exchanges, the funds stored in their account are not insured by the SPIC or the FDIC.
This platform is quite easy to access from all over the world and is a good learning platform for the beginners and inexperienced traders in the crypto space to learn new skills in trading digital assets.
It minimizes cryptographic literacy by allowing making direct deposits and buying or borrowing crypto coins instantly with little or no worries about commissions, balances, and minimum deposits on the platform.
Gemini, on the other hand, is a controlled crypto exchange that is good to go for trading and investing. It acts as a reliable custodian and also carries a proper license to hold the digital assets safely on behalf of consumers.
This trust corporation was founded by Cameron and Tyler Winklevoss and regulated in New York. It allows its users to trade their digital assets worldwide with fiat-to-crypto and crypto-to-encrypt pairings.
The prime objective of the company is to bridge the gap between the fiat and cryptography realms by making the digital assets more secure.
2. Products and Services
BlockFi provides a wide range of different solutions and products related to crypto including a crypto wallet. You can use the BlockFi wallet just like any other crypto wallet to store your coins and earn interest on them for the long term or use it to leverage today’s fiat currency.
Some other products and services offered by this platform include:
- Crypto-monetary trading and
- Crypto-currency loans
The platform is known for its BlockFi Interest Account, BIA, where the users can deposit their money and earn an interest of up to 8.60% on USDT, USDC, and GUSD.
This rate of interest is much higher in comparison to that provided by most of the traditional banks. The users are also rewarded for borrowing money from the platform, making it a profitable mechanism for the customers.
In order to make the platform more usable and transportable, Gemini on the other hand has created a large variety of new crypto-related goods. A few of these are:
- Its native coin, Gemini Dollar, which is represented as USDT and allows linking crypto with dollar, making it more stable and
- Initiation of first futures contracts for Bitcoin and attempt to get the initial ETF crypto regulators out of business.
In addition to that, Gemini also started setting up a Bitcoin trading system for the institutional investors. It has also built security protections and follows better regulatory measures in tune with a Wall Street bank to prevent scraping, hacking, and stealing from Bitcoin exchanges.
3. Number of Cryptocurrencies
Based on the overview of the two platforms, BlockFi handles fewer numbers of cryptocurrencies in comparison to Gemini. As for Gemini, you can deposit and earn interest on crypto coins such as BTC, ETH, LTC, AAVE, and LINK.
The list includes quite a lot of Altcoins as well but the only stable coin that is supported by this platform and you can earn interest on is DAI.
On the other hand, as for BlockFi, the platform supports BTC, BAT, BUSD, DAI, ETH, GUSD, LINK, LTC PAX, UNI, USDC, and USDT. Ideally, the number of coins supported by this platform is much lower than Gemini.
4. Buying Crypto
The ecosystem of Gemini offers a selection of crypto services and you can purchase a large variety of currencies by using fiat currency. The platform offers two specific ways in which you can buy crypto on their platform. These are:
- Gemini Exchange – This will allow you to make instant purchases of your chosen crypto using some fiat currencies. However, you will need to pay extremely high fees for every trade that you make, which may start from 1.49%.
- Gemini Active Trader – In this process, you can lower the fees and pay as little as 0.35% maximum depending on the type of your trade, which is more than 4 times lower.
However, the only downside of Gemini Active Trader is that you will not be able to purchase BTC or ETH and a variety of crypto coins using only the three fiat currencies that it supports such as GBP, SGD, and EUR.
And, you will also need to make two trades to own other currencies apart from BTC and ETH. For example, if you want to own LINK from your GBP, you will need to trade GBP to BTC first and then from BTC to LINK.
On the other hand, on the BlockFi platform, you will not be able to buy crypto directly with fiat or by using your credit card. However, you can transfer USD through a wire transfer into your account with a minimum deposit of $10.
In return, you will receive an equivalent amount of GUSD, which however is the stable coin that is produced by Gemini. And then you can trade using this currency.
5. Interest Rates
Both these platforms offer different rates of interest on the funds you hold depending on the type of the coins. On Gemini, some of the rates of interest are:
- BTC – 2.05%
- LINK – 4.08%
- ETH – 2.05%
- LTC – 2.77% and
- PAXG – 1.81%
In comparison, the rates of interest offered by BlockFi are:
- BTC – 0.25% and up to 4%
- LINK – 0.5% and up to 3%
- ETH – 0.25% and up to 4%
- LTC – 2% and up to 4.5% and
- PAXG – 0.5% and up to 2%
Though the rates of interest offered by BlockFi are tiered, overall, it provides much higher rates for all the common crypto coins except LINK in comparison to the interest rates of Gemini.
6. Borrower’s Perspectives
If you look at both these platforms from the perspective of the borrowers, Gemini offers its loans out only to the borrowers approved by them such as The Genesis Global Capital.
You will need to be extra cautious when you place your funds on Gemini Earn. This is because Gemini does not ask their borrowers to post any collateral to take out a loan which increases the risks.
This means that in the event of defaults by the borrowers, you may not be able to get back your money. And, the borrower does not even have to pay much of a penalty if and when they default on their loan repayment.
On the other hand, BlockFi usually offers over-collateralized the loans wherein the borrowers need to post some assets with the company to take out a loan.
This means that in the event of a default the platform can make use of the collateral so that the depositors do not lose their money. Therefore, BlockFi is much safer since it lends only to trusted corporate and institutional borrowers who are able to pay back.
It, therefore, lowers the risks involved in loaning in spite of the fact that the fund you own in BlockFi is not insured by the FDIC.
7. Withdrawal Limits and Fees
There are no minimum deposit requirements to use any of these two platforms by the crypto traders. You can deposit any amount and start earning immediately on your crypto. However, when it comes to withdrawals the minimum limits may differ.
On BlockFi, the withdrawal limit is 0.003 BTC and 0.056 ETH if you deposit only a small amount. Other than that, on BlockFi, depending on the type of crypto coins you want to withdraw, the limits over a 7-day period may vary, such as:
- For BTC, it is 100
- For ETH, it is 5000
- For LTC, it is 10000
- For PAXG, it is 500 and
- For stable coins, it is as high as 1,000,000.
You can even withdraw lower than this minimum amount but all transactions will involve a wait time of up to 30 days to get your withdrawal request processed.
As for the withdrawal fees, however, BlockFi allows the users to make only one withdrawal a month for free, whether you want to make it in crypto or stable coin.
And, this free withdrawal is applicable only to one particular currency. Over and above that, the users will have to pay variable fees for making withdrawals.
The amount of it however depends on the type of crypto coin withdrawn. It is 0.00075 in BTC, 0.02 in ETH, 0.0025 in LTC, 0.015 in PAXG, and $10.00 in USD for stable coins. No matter how insignificant these fees look, they can easily eat up your funds.
On the other hand, Gemini does not charge any fees for the first ten withdrawals made by you every month out of the platform. This is an exclusive feature that makes this platform much more flexible when the users want to send their crypto to some other platform.
And, you can receive your funds when you use Gemini almost instantly. However, sometimes it can take up to five working days depending on the conditions.
8. Security
When it comes to security, the majority of the funds deposited by the users of Gemini are stored in a cold storage which they claim to be one of the most secure ones.
The platform also uses an offline cold wallet. The remaining portion of funds that they hold is stored in hot wallets and is insured and therefore is safe as well.
In fact, the US dollars on this platform are insured by FDIC up to 250,000 for each user. The platform takes a number of initiatives to ensure the safety of it such as going through frequent bank exams, cybersecurity regulations by the New York Department of Financial Services or NYDFS and more.
It has in fact passed the SOC 1 Type 2 and SOC 2 Type 2 exams to get an ISO 27001 certification.
However, in comparison, BlockFi stores 95% of their funds with Gemini itself which is insured by Aon. They use this platform as their primary custodian.
However, they also use other custodians to store the assets of their users such as Coinbase, and BitGo. However, there is one important thing to note here.
Though the Gemini exchange and wallet are quite safe and secure providing more than $200 million worth of insurance for the funds of the users, this protection is not applicable to Gemini Earn.
Typically, Gemini does not insure those assets that are in its custody. This means that once it is sent to its creditors, there is a considerable risk of losing them.
9. Referral Deals
Both these platforms offer referral bonuses to the users. As for Gemini, their referral program allows the users to earn $10 USD in BTC. All you have to do is:
- Register and
- Trade for USD $100 or more.
On the other hand, according to the referral program of BlockFi, you will also get to earn $15 to $250 USD in BTC, in tiers, and for that, you will have to:
- Sign up with the partner link and
- Deposit $100 USD or more.
However, you will have to hold that amount till the day the next interest is paid, which is the first working day of the following month.
10. Few Other Differences
Like always, knowing a few other smaller yet important differential parameters between Gemini and BlockFi will enable you to choose a better platform to serve your crypto trading and investing needs.
While BlockFi was launched in 2017, Gemini was founded in 2015. Therefore, BlockFi is younger than Gemini.
In terms of fiat currency support, BlockFi supports only USD while Gemini supports quite a few including USD, EUR, AUD, GBP, CAD, SGD, and HKD.
On the Gemini platform, you can place limit orders but the BlockFi platform will not allow you to do so.
The Spreads on BlockFi can range anywhere between 0.7% and 1.5% while that of Gemini is 0.50%.
Since BlockFi offers crypto-backed loans, they charge a 2% origination fee on them.
If you want to make any debit card purchase, the BlockFi platform will not charge you anything for it but Gemini, on the other hand, will charge a fee of 3.49%.
While BlockFi does not support wire transfer, ACH transfer and crypto conversion, Gemini allows the users to do all these for free apart from crypto conversion for which the platform charges a fee ranging anywhere between $0.99 and 1.49%, whichever is applicable.
BlockFi is more transparent when it comes to changing the rates of interest offered. They typically review these rates every month and accordingly make the changes, if required. Gemini, on the other hand, does not state clearly how frequently they will make changes in the rates of interest.
The BlockFi platform can be used by anyone looking to buy, earn interest or borrow crypto coins. On the other hand, the Gemini platform targets the crypto traders and investors who want a platform that offers a variety of services such as trading and exchange, crypto loans, earning interests, wallet, custody, and more.
As for trading, the maximum trading limit on the Gemini platform is varied and depends on the methods. For ACH transfer it is $5,000 per day and $30,000 in a month and for debit card use it is $1,000 per day.
However, for wire transfer and digital assets there are no restrictions. As for BlockFi, the maximum limit for a single trade is $1.2m USD or its equivalent.
Which is Better – Gemini or BlockFi?
Considering and comparing the nuances of these two leading platforms, BlockFi and Gemini, one of them will be a good fit for an average crypto trader and investor while the other will be best suited for advanced trading and investing.
The question is which among the two to choose. And, the simple answer is, based on your crypto needs.
If you are looking for a platform that has been around in the market for a long time and offers a variety of products, Gemini is the right one for you.
There is a large number of crypto coins compatible with this platform and it also offers a crypto interest account, Gemini Earn. Its stable coin GUSD is USD-backed and unique as well. And, it is also quite a secure platform that comes with an ISO certification.
On the other hand, if you are looking for a crypto platform that is considered to be one of the biggest crypto interest account providers then BlockFi is the one to choose.
You can borrow USD backed stable coins and other crypto-backed loans at a low interest rate of 4.5% APY, use its trading account, or the crypto credit card recently launched by this platform.
If you consider the interest rates of each of these two platforms you must keep in mind at this point that the rates of interest are subject to changes, like all other accounts, and is not guaranteed since both these platforms reserve the right to modify the yield rates at any point in time.
If all these points of difference still do not help you to choose one among BlockFi and Gemini fast, then this surely would.
You should choose BlockFi if:
- You are okay with a relatively younger crypto platform
- You are looking for a one-stop platform that offers a variety of financial services
- You want to take out a crypto loan
- You want a higher rate of interest
- You want a card that pays 1.5% back to users in Bitcoin on all purchases
- You want secured and over-collateralized loans
- You want to lend ETH or LTC
- You are okay with one free withdrawal in a month.
On the other hand, you should choose Gemini if:
- You want a controlled crypto exchange
- You want to avail of the Gemini Pay feature to pay in cryptocurrencies in reputable stores
- You want more currency support
- You want to make more free withdrawals
- You like to have more flexibility and make unlimited free transfers
- You are okay with the lower security of loans.
Conclusion
Both Gemini and BlockFi come with distinctive benefits and disadvantages though both are good to have an alternative way to earn rewards on crypto assets rather than staking. This article hopefully has helped you in making the right choice.
I have special interest in crypto and intend to help common people to gain knowledge about the digital asset as well as its potential. Follow Me at Linkedin.
