Many financial experts claim that Compound interest is the most powerful force in the universe. The long term potential of compound interest has significant benefits for investors.
This financial tool has long been the center of the financial industry and is now available to crypto investors. It provides Bitcoin investors with the ability to earn compound interest on their Bitcoin and cryptocurrency holdings.
BlockFi offers compound interest services for Bitcoin and Cryptocurrency investors World Wide.
Lets dive right in to find out how it all works
How Does Compound Interest Work?
The key to compound interest is patience and staying power. Typically, compound interest products are long term, normally 1-5 years on average. By keeping your money invested and adding to it, it begins to accelerate like a snowball.
Imagine you deposit 10 Bitcoins on January 1 2020 earning 6% interest compounded monthly. By may 1 2020, your balance would be approx 10.1 BTC. You’ve just earned interest on that deposit.
So how does the power of compound interest work?
In the first month you earned interest on the 10 Bitcoins but the next month you would have earned interest on 10.025, increasing the amount of interest you will earn for each month that goes by. This process repeats month over month until you cash out.
If you leave your deposit in for one year your balance will now be 10.62, earning you 0.62 Bitcoin of interest over that time period. Now that you have 10.62, you will start the next year off earning interest on the 10.62 and it will continue to accelerate year after year.