Cryptocurrency is the financial instrument of the future. There’s no doubt about the current power that Bitcoin (BTC), Ethereum (ETH), and others enjoy in the current marketplace or in terms of their viability as financial assets over the long run. These and other crypto assets are only going to continue increasing in value as time progresses because the primary value addition to the crypto environment is in the spotlight right now. As more traders focus on the benefits of the native crypto exchange space, cryptocurrency itself grows stronger as a financial resource and a proof of concept for additional blockchain applications.
One fascinating development in the crypto universe is the introduction of crypto credit cards. The crypto credit card is a new take on an age-old idea. Leveraging your cryptocurrency holdings to borrow against for lent spending power is a novel concept, and one that’s making waves with cryptocurrency investors in the United States and all over the world. While debit cards that are linked to cryptocurrency wallets have existed for a number of years, the expansion of the crypto world into credit card offerings and borrowing limits is something unique and exciting.
But in order to understand the credit card system backed by crypto assets, it’s important to first understand how value is infused into the network of crypto holdings itself.
Cryptocurrency as a Hedge
Perhaps the most important function that crypto tokens play in the modern world is that of a hedge against the fatal flaw in fiat currencies worldwide. Central banks peg or float the value of their currencies according to domestic monetary policy or economic needs, which can often send out ripple effects into the world beyond.
The United States, for example, has been railing against Chinese “currency manipulation tactics” for many years. Domestic turmoil—or stability—can affect currencies in the wider world, setting off international battles competing over currency, trade, and everything that flows out from these questions of globalized commerce.
The cryptocurrency model takes this power away and hands it to the users themselves. Crypto tokens are decentralized assets and can be spent without the regulatory oversight of a national government, regardless of the physical territory that you happen to be standing in. This means that the landscape of cryptocurrency assets is removed from the political sphere of influence and exists in a user-oriented dimension. Many investors seek out Bitcoin and other crypto holdings as a hedge against the rising inflation that weakens the U.S. Dollar and every other fiat currency. But this hedging also plays another pivotal role.
Crypto as a Collateral Instrument
Rather than simply leveraging crypto holdings to create growth in a stock market-like environment, users are now able to leverage the value of their holdings in order to borrow as cardholders wielding a line of credit. Backed by this decentralized matrix of currency tokens, a cryptocurrency credit card is a uniquely powerful financial tool that melds fiat spending with the freedom of a decentralized monetary system.
Crypto credit cards are also fantastic for rewards. Just like the standard card that resides in your physical wallet, a crypto enhanced card offers cashback rewards, low transaction fees, and automatic conversions to local currency, on the fly. Issuing financial institutions are FinTech giants and offer cutting-edge technology that allows you to take advantage of the strength of your crypto assets while transferring into high-value, real-time trades that take advantage of local currency marketplaces.
Checking out cryptocurrency offerings in the credit game is the best way to make your crypto assets work harder for you. Cryptocurrency is the smarter option when it comes to personal finance; make sure you’re taking full advantage of all that these assets have to offer.