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BlockFi crypto credit cardholders are getting a better deal than expected, thanks to rising bitcoin price

BlockFi crypto credit cardholders are getting a better deal than expected, thanks to rising bitcoin price
Written by publishing team

In July, major crypto lender BlockFi officially launched its credit card that allows customers to earn crypto rewards based on spending. Today, the company said that the number of BlockFi card holders has grown to more than 50,000 in the past three months.

Unlike crypto debit cards offered by companies like BitPay and Coinbase – which allow customers to spend their cryptocurrency – the BlockFi credit card incentivizes users to spend US dollars in order to earn cryptocurrency.

BlockFi first announced its partnership with Visa to issue a bitcoin-back rewards credit card in December 2020. Instead of the recurring cashback or rewards that credit cards typically offer, the BlockFi card pays holders 1.5% BTC (BTC-USD) at all. Purchases.

Based on the latest financial data from American Express, Mastercard, and Visa, the average US credit card user of these three major issuers spends about $20,000 annually. By comparison, in three months of data, BlockFi cardholders are on track to spend an average of $30,000 annually or 50% higher than major issuers. Based on the same spending forecast by the company, BlockFi cardholders are expected to spend more than $2 billion annually.

The BlockFi report also notes that Costco, Amazon, and Home Depot are the merchants where cardholders spend the most, but in particular, during the first month, BlockFi released the Compass Mining Card, the retail-friendly bitcoin mining company, which was in the top 10 sellers list. based on the amount of expenditure.

“Our typical cardholder is a smaller, smarter investor who has managed to grow his fortune,” BlockFi CEO Zach Prince told Yahoo Finance. “They generally believe in the power of bitcoin and see access to the BlockFi Rewards Card as a valuable place to earn passive income and boost their financial health.”

Since announcing their credit card at the end of last year and launching this summer, several other companies have upped the competition by issuing their own variants of crypto reward cards: Venmo, SoFi, and Brex (a partnership between crypto exchange Gemini and Mastercard), a partnership between the fintech company Upgrade and NYDIG, and the prospective Unfimoney credit card with Visa.

Each cryptocurrency redeemable credit card gives a different reward spin. Gemini offers tiers of 3% return on food, 2% on groceries, 1% on all other purchases, and payouts in bitcoin plus 30 other cryptocurrencies. The upgrade offers 1.5% back in BTC but customers will not receive rewards until they pay off their existing credit card purchases.

BlockFi launched its Bitcoin credit card with Visa on July 6, when the price of Bitcoin was around $34,000. Since then, she has run an advertising campaign with both online and physical billboards as well as a series of commercials (1,2,3).

The company gave its cardholders 3.5% of the bitcoin rewards for the first 90 days as a sign-up bonus. Thanks to the bitcoin rally since then, cardholders actually earned more than 4% of their BTC spending with a sign-up bonus, or 1.8% without a sign-up bonus.

In the past, the timing of cryptocurrency investments as bitcoin prices soared has been bad for retail investors, according to a report by consumer spending data provider Cardify. It showed that crypto investment deposits by retail investors lagged behind the bitcoin price rally in May before fully rallying with the price crash at the end of the month. Earning Bitcoin or other crypto rewards for spending may offer investors themselves a relatively safer avenue in the cryptocurrency markets.

David Hollerith covers Yahoo Finance’s cryptocurrency. follow him Tweet embed.

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