Bitcoin Rewards Is Becoming A Hot New Trend In Banking




The price of a single Bitcoin may be around half of what it was just a few months ago, but that doesn't mean crypto has run its course. The reality is, cryptocurrency has always been volatile in general, and Bitcoin has still shown an upward trend since inception, albeit with plenty of bumps along the road.

Many experts still project that Bitcoin will surpass $200,000 or more in value in the near-term. This includes billionaire venture capitalist and bitcoin investor Tim Draper, who recently told CNBC Make It that Bitcoin will reach $250,000 by late 2022 or early 2023 despite its dramatic swings.

This is good news if you're slow to get started investing in Bitcoin, but it's even better news if you want a way to grow your Bitcoin balance without even investing your own money. Over the last few years, an array of banks and financial institutions have created new ways for Bitcoin enthusiasts to get into the game via bank deposits and even credit card spending.

If you want to invest in Bitcoin while you bank or use a credit card, you have quite a few options to consider. Here are some of the Bitcoin-themed financial products you can explore right now.


    PayPal And Crypto

While PayPal has been a popular payment method for a while now, this company is constantly innovating and adding new features. As of early 2021, PayPal users can now buy, sell, hold, and pay for purchases with cryptocurrencies (including Bitcoin) directly through PayPal.

This option is available for personal and Premier PayPal accounts, but not for business accounts. PayPal is also offering resources to help users learn about cryptocurrency and track crypto prices all within the PayPal app, they note on a PayPal FAQ page.


    Bitcoin Rewards Credit Cards

There are a dizzying array of rewards credit cards that use cryptocurrency or dole out cryptocurrency as rewards. Since they all work so differently, it's important to understand how each one operates, what is required of you, and any fees involved before you sign up.

One of the most popular crypto credit cards right now is the BlockFi Bitcoin Rewards Credit Card, which is currently on a waitlist. This Visa credit card comes with no annual fee and no foreign transaction fees, yet it doles out 1.5% back in Bitcoin on all purchases, then 2% back in Bitcoin once you have spent at least $50,000 on your card within a calendar year.

New cardholders also earn 3.5% back in Bitcoin for the first three months. Other benefits include a 2% APY bonus in bitcoin on stablecoin holdings, a 0.25% trading bonus in bitcoin on all eligible trades, and a $30 bonus in bitcoin for referrals to the card.

Then there's the SoFi Credit Card, which lets users earn 2% back in rewards with no annual fee. While you can redeem rewards earned with this card for cash back, you can also use it for crypto deposits into a SoFi Invest account, loan payments toward SoFi student loan or personal loan balances, or as fractional shares into your SoFi Invest account.

The SoFi Credit Card is also a World Elite Mastercard, so it comes with perks like cell phone protection worth up to $1,000, three months of free DashPass membership, free ShopRunner membership and more.

Other credit cards that let you earn Bitcoin include the Brex Card, the Gemini Credit Card, and the Unifimoney Visa Credit Card, to name a few.


    Bitcoin Debit Cards

There are also debit cards that dole out Bitcoin and other cryptocurrencies on spending, the most popular of which is the Crypto.com Visa Rewards Card. This prepaid debit card lets you earn 1% to 8% back on spending depending on the "tier" of card you have and the amount of crypto you're able to stake.

For example, the highest level Obsidian card offers 8% back on spending with a staking requirement of $400,000, yet the basic Midnight Blue version of the card offers 1% back with no staking requirement. The second tier up, Ruby Steel, requires users to stake $400 and offers 2% back on all spending.

The Crypto.com Visa Rewards Card doesn't charge an annual fee, and each tier of card allows a certain amount of free ATM withdrawals each month and other perks. However, this card issuer is pretty vague about other fees they charge on this prepaid debit card. On the product page, Crypto.com says the following:

"Information about fees and limits (i.e. free ATM withdrawals, interbank exchange rates, top-ups, etc.) can be found in the ‘Fees & Limits’ section under ‘Settings’ in the Crypto.com App. Fees vary by card tier, so be sure you’re checking the correct one."

Another new choice in the debit space is Quontic Bank’s Bitcoin Rewards Checking, which offers 1.5% back in Bitcoin on eligible purchases.


    Bitcoin Bank Accounts

There are also quite a few crypto savings accounts that let customers earn Bitcoin on their deposits. The downside of these accounts is the fact that, unlike traditional bank accounts, they are not protected by FDIC insurance.

Still, crypto savings accounts can be profitable if you're willing to take the risk. For example, the BlockFi Interest Account lets users earn up to 7.5% APY on their crypto deposits, although returns on Bitcoin are lower than that. This account also comes with no hidden fees and no account minimums, and you receive an interest payment every month.

Also check out Outlet Finance, which lets users earn up to 9% APY on their deposits. This financial institution lends money to people buying cryptocurrency, and it is able to offer a higher rate of return as a result. You can add money to your account and earn interest in USD, so you don't even have to deal with cryptocurrency on the backend.

Other crypto savings accounts are out there, so make sure to check out options from Linus, Gemini, Coinbase, Crypto.com, and more.


    The Bottom Line

Bitcoin rewards banking is making it easier than ever to earn Bitcoin and other cryptocurrencies through credit card spending or secure a higher rate of return on your savings than you would with a traditional bank account. The fact there are so many options to choose from is mostly a good thing, although you should definitely read the fine print and know what you're getting into ahead of time.

At the end of the day, you should know that Bitcoin banking products come with risk, mostly because cryptocurrency itself is largely unregulated and you won't get any FDIC insurance. If you educate yourself and understand the potential downsides, these accounts could help you grow your Bitcoin balance or your savings over time.


Read the full article at www.forbes.com

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