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Few topics in the fintech space are as seductive and polarizing as cryptocurrency1. Some believe that it’s the unavoidable future of finance, while others firmly believe that it’s a drawn-out fad driven by provocative and rebellious traders. But whether you’re a die-hard aficionado of the digital asset revolution, or choose to maintain a healthy skepticism, the rising popularity of the cryptocurrency market is impossible to deny. One particular development seems to signal crypto’s long-awaited acceptance in the mainstream by consumers and investors alike: crypto as credit rewards.
Earlier this year, Deserve partner BlockFi announced the launch of their BlockFi Rewards Visa Signature Credit Card2, the first of its kind in an increasingly competitive credit card industry. Instead of cash-back perks or airline miles, consumers can now make purchases to build their Bitcoin profiles.
Although the cryptocurrency market may seem unpredictable, BlockFi’s move represents a huge win for crypto enthusiasts. This development further expands the opportunities for digital currencies to break into the mainstream more permanently. Assuming the most optimistic outlook, here’s why we think cryptocurrency cards like BlockFi’s are the future.
Over the past few years, cryptocurrency platforms in digital asset lending have exploded, with total lifetime loan originations exceeding $10 billion in mid-2020. BlockFi has had remarkable success in its fundraising efforts, completing a $350 million Series D funding run earlier this year, landing its overall valuation at around $3 billion. The company now boasts $50 million in monthly revenue compared to the $1.5 million in monthly revenue from last year, which is a truly astounding growth rate by any industry standard.
For a market as presumably “volatile” as cryptocurrency, this high-profile investor* activity points to a significant shift in how these assets are viewed by experts and the financial industry at large. And if anything signals a mainstream breakthrough for crypto, it’s that investors* are willing to back their curiosities with high volumes of capital.
One issue that has previously held back digital currencies is their lack of appeal to mainstream consumers and casual investors. The crypto environment has long been the territory of message-board traders, entrepreneurs, and others with the financial stability and experience to navigate the exchange. But crypto reward cards offer beginners an entirely different experience and entry point into acquiring digital currencies: one that’s much easier, and far less intimidating, than making investments and purchasing assets through a trading service.
When obtained in the form of credit rewards, cryptocurrency gives providers and consumers an opportunity to experiment without venturing too far out of their comfort zone and creates opportunities for potentially high returns. In many cases, cardholders can avoid paying the commission rates associated with popular trading apps, which tends to be a turn-off for new investors.
When it comes to the long-term viability of any industry or product, it’s generally good to have diversity of competition. While the idea of a cryptocurrency card isn’t necessarily new—crypto debit cards already exist, and large financial institutions like PayPal allow crypto spending on commercial products—the credit rewards trend is less than a year old and has already matured into a highly competitive space. While BlockFi is leading the charge, a handful of other platforms have promptly followed suit and introduced cryptocurrency rewards as a part of their broader offerings.
The finance world has not yet reached a consensus on the overall role of digital currencies, but their rapid emergence in credit reward programs hints at a growing recognition of their potential and mainstream viability. As far as we can tell, cryptocurrency is here to stay.