The cryptocurrency segment has experienced explosive growth over the past few years. Besides Bitcoin, there are over 4,000 altcoins in circulation. Once a niche product, cryptocurrency is now part of the mainstream and intersects with credit cards.
Cryptocurrencies are more than investment assets. Today you can get a Monero loan or buy Bitcoin at a special ATM. These kiosks accept debit cards, credit cards and cash. At the time of this writing, there are over 20,000 Bitcoin ATMs in the United States. So how do these systems work?
Functions of Bitcoin ATMs
Despite their name, these machines have limited functionality. Unlike conventional ATMs with a cash dispensing option, they have only one goal: to allow you to buy a limited amount of crypto coins in exchange for cash. Users pay fees for transactions, and the price of crypto doesn’t always have the best possible rate.
Buy cryptocurrency with a credit card
New opportunities for buyers have arisen. A limited range of cryptocurrencies can be purchased with a credit card. Only certain platforms support these transactions, and the fees are quite high.
The biggest concern is that financial institutions often view cryptocurrency as a cash equivalent. This means that your purchase will incur the same fees as withdrawing from a regular ATM. Interest will also be higher from day one.
Credit cards with Bitcoin rewards
Recently, credit cards with cryptocurrency bonuses have become available. In December 2020, one of the lenders announced the introduction of a single Visa card that pays rewards in BTC. The product was launched publicly on July 6, 2021. Here are its main features.
- Holders get 1.5% Bitcoin cashback on all purchases.
- You also get $ 250 if you spend $ 3,000 in the first 3 months.
- As the rewards are paid in BTC, you can benefit from its fluctuations.
This is a great example of the overlap between credit cards and cryptocurrencies. In contrast, the package comes with a high service charge. The correlation between the rewards and the price of Bitcoin is both a plus and a minus.
- The annual fee is $ 200, which is higher than the annual fee for regular cards.
- If Bitcoin depreciates, so do the rewards.
The cryptocurrency industry is evolving at breakneck speed and has started to overlap with conventional products like credit cards. First, you can buy virtual coins from tens of thousands of Bitcoin ATMs. Second, cryptocurrency can be purchased with a credit card on digital exchanges, although the fees can be substantial.
Finally, the unveiled Visa credit card offers bitcoin rewards. Holders can take advantage of its volatile rate and earn generous trading bonuses. More such products are expected in the future.