It was the first in-person Collision in three years, during which time great leaps had been made in areas such as Web3 , artificial intelligence , machine learning , and cryptocurrency. Marquez filled the bill perfectly. But days before the conference kickoff on June 20, her name suddenly disappeared from the program.
That included her spot in a session called "What to Feed a Growing Unicorn. In January of this year, she and her co-founder, Zac Prince, were running the fastest-growing company on the Inc. They were going legit. But by June, they would find themselves swimming against a tide that was dragging the entire crypto industry under.
Now it's every month. That strategy was clearly working. Like others in this arena, including Binance, Coinbase, and Celsius Network, BlockFi's growth was hitched to the price of Bitcoin and other crypto coins.
Meanwhile, the day traders continued to party, embracing crypto's HODL hold on for dear life ethos. Crypto winters have occurred regularly and been followed by ever bigger booms.
The industry expected the same thing to happen this year. But the crypto winter of has proved far, far worse than anyone's worst dreams.
Several crypto firms, including Three Arrows Capital, Voyager Digital, and Celsius Network, would go bankrupt as their unsustainable business models--and that's using the term generously--imploded. Few ever confront the sudden reversal that BlockFi did.
In crypto, the innovators aren't necessarily people with backgrounds in traditional finance. Indeed, it's not unusual for disrupters to come from outside the sector they disrupt.
But when new entrants behave irrationally, the economics can follow, which is part of what happened in the crypto winter. With some understatement. For a time, even as Bitcoin turned south in early , BlockFi seemed to motor along. BlockFi also planned another capital raise to expand its balance sheet and lending. For the month of May, in fact, the company turned a profit.
UST was billed as a stablecoin, whose value could be pegged to the dollar. But it was also an algorithmic coin--backed by code instead of hard assets. Despite the turmoil, Marquez and Prince thought they'd built a cyber winter-proof organization.
The committee was peopled with Wall Street types who had experienced the financial crisis of They see no need for intermediaries in crypto, since every transaction is recorded via blockchain, whose air-tight encryption renders trust irrelevant. So is there even a need for companies such as BlockFi? I do find that super ironic. The reality, though, is that many companies are cross collateralized, cross invested, and basically crisscrossed at every level: investors, debtors, and creditors.
They would all share the pain. This became evident on June 12, when one of BlockFi's competitors, Celsius Network, froze withdrawals, citing "difficult" market conditions. Although BlockFi and Celsius had fundamentally different risk profiles, BlockFi customers started to head for the exits. You see these types of events happen in banking as well. BlockFi's customers would be protected under the agreement--any FTX claims were subordinate. Customers get nervous and flee, trying to be the first ones out of the door.
In his Twitter feed, Prince tried to forestall a run by talking up the balance sheet strength that the FTX deal offered. And on a crypto fanboy podcast called irony alert On the Brink, he made the case that BlockFi was solid, even if other companies failed.
But, alluding to the financial meltdown that wiped out firms such as Bear Stearns and Lehman Brothers, he allowed: "There are some parallels to This is a crypto version of that, and I don't think it's over.
That certainly proved to be the case. Although the claim wasn't true, the pressure on BlockFi got worse. But BlockFi's customers were, again, made whole, shielded by BlockFi's conservative approach to a speculative asset. There's a Wall Street maxim that the market can be irrational longer than you have money.
It was operationally sound, not overleveraged, and kept 10 percent of deposits available at all times--as conservative as any commercial bank. Marquez and Prince arrived at blockchain banking from different directions. After coming to the U. The couple's plans to return to Argentina and start careers there were undermined by the country's then and now unstable economy. So they moved to Miami, where Flori was born.
Marquez, 31, says she absorbed the typical pressure put on a child of immigrants to outperform the other kids at school. At Cornell, she studied prelaw, but, after talking to lawyers about their careers, she switched to finance, which offered a quicker path to paying off her student loans.
Failing to get an offer from the bank where she interned her senior year, she took a job as an investor relations manager at a hedge fund. She then jumped to Bond Street, a fintech startup that made loans to small businesses, and found herself on the phone with hair salon and coffee shop owners, figuring out how to underwrite their loans or, if they were in trouble, work out repayment schedules.
When Goldman Sachs acqui-hired the Bond Street team in , Marquez could have easily joined the blue chip firm. Or vanished within it. She put up her hand. She was now her own boss, and a business owner. A sunsetting business, though, since the portfolio would soon wind down. She decided to spend her nights managing the portfolio and days combing her network, looking for ideas and people to start a new business. They'd known each other through their fintech connections.
He had an idea. And a problem. The problem occurred when he applied for a loan to buy an investment property in Prince seemed like a good risk. He was already well established in a fintech career as a senior vice president of Zibby now Katapult , a lease-to-own lender. He had a thing for numbers, having financed his education, first at the University of Oklahoma and then at Texas State University, with winnings as an online poker player.
Prince grew up in San Antonio, where he was a nationally ranked tennis player on the junior circuit before his interests turned to finance.
But after graduating in , finance jobs were in short supply, so he joined a tech startup that was developing programmatic advertising and then made his way to online lending at Orchard Platform, a broker dealer.
But when he included Bitcoin and Ethereum among his assets, his lender balked, seeing them as latter-day Confederate scrip without actual value. That was his light bulb moment for starting BlockFi, Prince explained in a corporate video. Every asset class needs debt and credit products for investors; crypto would too. Marquez had an offer from Goldman in her pocket the morning she decided to talk to Prince. She knew, on the basis of her own family's experience, that billions of people around the world were locked out of banking.
Blockchain-based finance, which sidesteps governments and bank intermediaries, could be an entry point for them. The two weren't alone in their thinking. BlockFi had ridden out its first crypto winter.
The forecast looked positively sunny. Getting into the lending business isn't like opening a bakery. It's subject to both federal and state banking regulations.
And that's just in the U. Yet at both the federal and state levels, there were few regulations and regulators for crypto. That posed players with a choice that many new-technology firms face: Launch and ask for regulatory permission later or try to bring the regulators along with you. After all, the company wanted consumers to think of it as they would any other bank or finance firm.
Marquez, the regulations wonk, worked at getting lending licenses state by state, beginning with California, while cajoling legislators to start thinking about how to bring crypto into the regulatory fold.
That product, the BIA, launched in Indeed, BIAs were especially attractive in countries where liquidity is an issue and borrowing and lending in U. Prince talks pointedly about avoiding "asset-liability mismatch" taking in crypto and lending dollars as well as duration risk borrowing short and lending long , both issues with institutional clients: investment banks, hedge funds, and pension funds needing crypto for proprietary trading or their own customers.
Now customers could trade Bitcoin and Ether in addition to borrowing and lending. And that was just the beginning. Even bad news seemed like good news for BlockFi, at least initially. The decision was not unanimous, with commissioner Hester M. Peirce writing in dissent, "Is the approach we are taking with crypto lending the best way to protect crypto lending customers? I do not think it is. Still, Prince and Marquez, and others in the industry, considered the consent decree a big step forward--a de facto seal of federal approval.
He also announced a new product, BlockFi Yield, for high-net-worth individuals. That mil sure would have come in handy in June, as BlockFi's balance sheet got squeezed. The company wasn't yet big enough to absorb a significant hit.
With withdrawals rising and trading volumes declining as the price of crypto crashed, the company was increasingly in a bind.
Cryptocurrency platform BlockFi unveiled the first credit card to offer Bitcoin rewards Tuesday, giving consumers a way to earn the cryptocurrency instead of points or airline miles on every purchase. The BlockFi Bitcoin Rewards Credit Card, available next year, will function much like a traditional cash-back rewards card. Once approved, cardholders will have a credit limit they can spend against to earn 1. The digital currency reached an all-time high price on Monday, according to cryptocurrency index site CoinDesk.
But annual fee and rewards may limit appeal to just bitcoin buffs
On Dec. This isn't the first Crrdit crypto has been used in a rewards program—bitcoin debit cards are aplenty. But this will be the first credit card of its kind in an industry dominated by cash back, points, and miles. Blockfi Credit Card Bitcoin, rewards credit cards have offered cash back, points, or miles. BlockFi's Bitcoin Rewards Visa Credit Card will be the first to offer Money Man Tymb in the form of a nontraditional currency or digital asset like bitcoin.
Introducing crypto rewards to Blockfi Credit Card Bitcoin credit card industry should help elevate the visibility and legitimacy of bitcoin and other digital currencies. Among cash-back credit cards, 1. So the prospect of earning 1. So while the potential upside of investing in Blockif could make the steep annual fee worth it for die-hard fans, Bihcoin rewards credit cards are unlikely to see a lot of competition for wallet space.
Credit Cards. Credit Card News. Rewards Credit Cards. Cookies collect information about your preferences and your devices and are used to make the site work as you expect it to, to understand how you interact with Bloc,fi site, and Credti show advertisements that are targeted to your interests. Your Money. Personal Finance. Your Practice. Popular Courses. Key Takeways BlockFi, a cryptocurrency-based lender, says Floating Wrist Tether will launch its Bitcoin Rewards Visa Credit Card, the first credit card to offer rewards in bitcoin, in early Cardholders will earn 1.
The waitlist for the Blocifi is already open to BlockFi account holders and CCard open to the public Bloclfi January. Article Sources. Investopedia Blockfi Credit Card Bitcoin writers to use primary sources to support their work. These include white papers, government data, Blockfi Credit Card Bitcoin reporting, and interviews with industry experts. Related Articles. Bitcoin How to Buy Bitcoin. Partner Links. Related Terms. How Does Cash Back Work?