The cryptocurrency segment has seen explosive growth over the past few years. Aside from Bitcoin, there are over 4,000 altcoins in circulation. Once a niche product, cryptocurrency is now part of the mainstream, and it is intersecting with credit cards.
Cryptocurrencies are more than investment assets. Today, you may get a Monero loan or buy Bitcoin at a special ATM. Such kiosks accept debit cards, credit cards, and cash. As of this writing, there are over 20,000 Bitcoin ATMs across the United States. So, how do these systems work?
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Illustration of hands showing bitcoins
Functions of Bitcoin ATMs
Despite their name, these machines have limited functionality. Unlike conventional ATMs with a cash dispensing option, they have just one purpose — to let you purchase a limited amount of crypto coins in exchange for cash. Users pay fees for the transactions, and the price for crypto has not always the best possible rate.
Buying Cryptocurrency With a Credit Card
New opportunities for buyers have emerged. A limited range of cryptocurrencies may be bought with a credit card. Only some platforms support these transactions, and the fees are quite high.
The biggest concern is that financial institutions often regard cryptocurrency as a cash equivalent. This means that your purchase will entail the same fee as withdrawal from an ordinary ATM. The interest will also be higher starting 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 unique Visa card that pays rewards in BTC. The product was publicly launched on July 6th, 2021. Here are its key features.
- Holders get 1.5% cashback in Bitcoins on all purchases.
- You also get $250 for spending $3,000 within the first 3 months.
- As rewards are paid in BTC, you can benefit from its fluctuations.
This is a great example of an overlap between credit cards and cryptocurrencies. On the downside, the package includes high service fees. The correlation between the rewards and the price of Bitcoin is both a benefit and a drawback.
- The annual fee is $200, which is higher than the annual fee on ordinary cards.
- If Bitcoin depreciates, so do the rewards.
Bitcoin currency exchange concept illustration
To Sum Up
The cryptocurrency industry is evolving at breakneck speed, and it has started to overlap with conventional products like credit cards. First, you can buy virtual coins in tens of thousands of Bitcoin ATMs. Secondly, cryptocurrency may be purchased with a credit card on digital exchanges, although the fees may be substantial.
Finally, the unveiled Visa credit card offers rewards in bitcoins. Holders may profit from its volatile rate and earn generous bonuses for transactions. More such products are expected in the future.
