The cryptocurrency segment has been experiencing explosive growth over the past few years. Apart from bitcoins, there are over 4,000 altcoins in circulation. Once cryptocurrency was a niche product, now it has become 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 from a dedicated ATM. These kiosks accept debit cards, credit cards and cash. As of this writing, there are over 20,000 bitcoin ATM machines in the United States. So how do these systems work?
Bitcoin ATM functions
Despite their name, these machines have limited functionality. Unlike conventional ATMs with cash dispensing capabilities, they only have one purpose – to allow you to purchase a limited amount of cryptocurrencies in exchange for cash. Users pay transaction fees, and the price of a cryptocurrency is not always the best possible price.
Buying cryptocurrency with a credit card
There are new opportunities for buyers. A limited set of cryptocurrencies can be purchased with a credit card. Only a few platforms support these transactions and the fees are quite high.
The biggest concern is that financial institutions often view cryptocurrency as monetary value. This means that the same fee will be charged for your purchase as for withdrawing funds from a regular ATM. Interest will also be higher from day one.
Bitcoin Rewarded Credit Cards
Credit cards with cryptocurrency bonuses have recently become available. In December 2020, one of the lenders announced the introduction of a unique Visa card that pays fees in BTC. The public launch of the product took place on July 6, 2021. Here are its main features.
- Holders receive 1.5% bitcoin cashback on all purchases.
- You also get $ 250 for spending $ 3000 in the first 3 months.
- Since the reward is paid in BTC, you can benefit from fluctuations in it.
This is a great example of the overlap between credit cards and cryptocurrencies. On the other hand, the package includes a high service charge. The correlation between reward and bitcoin price is both an advantage and a disadvantage.
- The annual fee is $ 200, which is higher than the annual fee for regular cards.
- If Bitcoin is depreciating, so is the reward.
The cryptocurrency industry is evolving at a breakneck pace, and it has started to overlap with traditional products like credit cards. First, you can buy virtual coins from tens of thousands of bitcoin ATMs. Secondly, cryptocurrency can be bought with a credit card on digital exchanges, although the fees can be significant.
Finally, the presented Visa credit card offers bitcoin rewards. Holders can profit from its volatile exchange rate and earn generous transaction bonuses. More of these products are expected in the future.