Ziglu is the latest to drop its crypto earn rates
Shockwaves from the crypto price crash continue as Ziglu becomes the latest provider to drop the yield rates on its crypto earn accounts.
The crypto crash has wiped more than $1.5 trillion (£1.2 trillion) from the market in a matter of weeks. Bitcoin dropped to an 18-month low at the end of May, while Ethereum’s price is down around 65% from an all-time high reached last year.
As a result, crypto earn account providers are reviewing what yield rates they can offer customers. Following the lead from the likes of AQRU, Ziglu has informed customers that it will drop the rate on its Bitcoin Boost account from 5% to 2%.
Ziglu Bitcoin Boost rate cut
Effective June 15, 2022, Ziglu Bitcoin Boost account holders will receive a rate of 2%. This is considerably lower than the current rate of 5%.
Ziglu cited market conditions as the reason for the move. In a message to customers, it said “Our Boost accounts are one of the most popular features of the Ziglu app. However, to align with the borrowing rates available in the broader market, we’ve taken the difficult decision to decrease the rate.”
The Bitcoin Boost account works by customers adding funds to their accounts. Ziglu then borrows this Bitcoin and partners with lending platforms to lend the Bitcoin on. This typically generates a return which is passed back to the customers. But with the value of Bitcoin tanking, borrowing rates have also plummeted and so returns have dropped.
Ziglu – one of the few crypto companies registered with the UK watchdog, the Financial Conduct Authority (FCA) – also has a Sterling Boost account. It did confirm that the rate on this account will remain unchanged at 5% APR. The exchange also said it was looking to add more Boost products in the coming months with different yield options.
Rates for crypto
The shift from high yield rates to lower returns reflects what is happening in the wider crypto market. With the majority of coins experiencing a drop in value, crypto earn providers have had to react accordingly. The loss of so much value is making the industry sit up and review the concept of leverage in cryptocurrency markets.
Whether or not we will see the return of high yield rates will depend on whether the market will bounce back. Cryptocurrency prices are notoriously volatile, with Bitcoin experiencing several market crashes since its inception 12 years ago. Some could argue that there will be another surge following this latest crash.
However, this is unlikely to happen in the immediate future. And as traditional savings rates start to rise again, investors may start to rethink their financial strategies and shun riskier options including crypto earn accounts.
*Cryptocurrencies aren't regulated in the UK and there's no protection from the Financial Ombudsman or the Financial Services Compensation Scheme. Your capital is at risk. Capital gains tax on profits may apply.
Cryptocurrencies are speculative and investing in them involves significant risks - they're highly volatile, vulnerable to hacking and sensitive to secondary activity. The value of investments can fall as well as rise and you may get back less than you invested. Past performance is no guarantee of future results. This content shouldn't be interpreted as a recommendation to invest. Before you invest, you should get advice and decide whether the potential return outweighs the risks. Finder, or the author, may have holdings in the cryptocurrencies discussed.
