The Best Crypto Rewards Programs
Adding crypto assets to your digital assets doesn’t have to be hard. Whether you are a crypto enthusiast or just a beginner, adding crypto to your portfolio can be as simple as choosing the right rewards program.
What are Crypto Rewards?
Crypto rewards programs allow you to earn rewards in the form of cryptocurrency. You’re probably already used to earning rewards from a variety of programs, from grocery store loyalty programs to airline points to rewards credit cards. These programs are similar, but the rewards you’ll earn will be in some form of crypto.
In addition, cryptocurrency exchanges may offer cryptocurrency rewards in exchange for staking crypto; more on that in a moment.
How Crypto Rewards Programs Work
There are a number of ways you can earn crypto rewards.
The first is to use a debit card, prepaid card, or credit card that offers crypto rewards. With these cards, eligible purchases earn you cash back rewards in the form of cryptocurrency.
The second way to earn crypto rewards is by using a card where the issuer pays you cash back in the form of US Dollars or points for eligible purchases. You can then use that cash (fiat currency) or points to buy cryptocurrency. Typically companies that offer rewards of this type will include additional perks such as waiving transaction fees when you redeem cash or points for cryptocurrency through them.
The third way to earn crypto rewards is when you make purchases through a loyalty program that offers this option. Some retailers and restaurants are starting to offer crypto as a rewards option when you spend money with them. Shake Shack, for example, ran a limited time promotion where customers who used Cash Card, the Cash App debit card, to pay for their purchases at Shake Shack could choose to earn bitcoin as a reward.
Retail and restaurant programs are still fairly new, but are expected to grow in the future. For the time being, these offer ways to dabble in crypto rewards but don’t offer a lot for serious investors.
Finally, many cryptocurrency platforms and exchanges offer staking rewards. Staking essentially involves locking up crypto for a period of time so it can be put to work to confirm transactions. Not all types of crypto allow for staking, but if it’s available, and you qualify, staking crypto can be an appealing way to earn a higher APY on your crypto holdings. It involves another layer of research and decisions to find the right opportunities, though.
Crypto beginners may want to check out Coinbase Earn, which offers small crypto rewards in exchange for watching educational videos about crypto. Coinbase is the most popular crypto exchange and it allows you to invest in dozens of the most popular coins and tokens, so it’s a popular starting point.
What to Look for in a Crypto Rewards Program
With so many different crypto options, identifying the right reward program can be overwhelming at times. Here are are some factors to consider:
How rewards are earned
Minimum requirements to earn crypto rewards
How rewards can be redeemed
Annual fees and redemption fees
Cashback and/or reward rates
ATM withdrawal fees
Interest rates (APR)
Domestic and foreign transaction fees
It sounds like a lot to consider, and it can be. If you don’t have a lot of experience with crypto, or a lot of time to research options, you won’t want to start out by staking to earn rewards. Instead, you’ll want an easier point of entry, such as a credit card that offers crypto rewards as an option.
Types of Crypto Rewards
There are many types of crypto rewards that can be earned. Hypothetically, as long as it is a cryptocurrency it can be offered as a reward. The most common types of cryptocurrency offered as rewards are Bitcoin and Ethereum.
If you are staking crypto to earn rewards, you’ll likely earn the same type of crypto you are staking, though occasionally rewards will come in the form of a different type of crypto.
The Best Crypto Rewards Programs
The best crypto rewards program for you will depend on your needs. If you want to earn serious crypto rewards outside of staking, you’ll probably want to look into cards that offer crypto rewards. (A few cards also require staking to earn higher levels of rewards.)
Many of these programs are aimed at consumers, not businesses. Businesses with high spend, such as ecommerce businesses with heavy ad spend, are in a great position to earn significant rewards by using the right card to pay for those purchases. That’s especially true if you use a card that offers unlimited rewards.
Here are some of the best crypto credit cards, debit cards and prepaid cards to consider:
Brex Credit Card
With a Brex credit card you earn 1 to 8 points with eligible purchases, depending on the spending category. You can also earn additional rewards by hitting certain spending milestones. You have the option of redeeming points for Bitcoin and Ethereum. (You will need to open a crypto wallet with Coinbase first.)
Brex requires a minimum of 1000 points per transaction while up to 1 million points can be redeemed for cryptocurrency.
SoFi Credit Card
The SoFi credit card gives you 2% back on eligible purchases as points. These points are worth 1 cent each and can be used to add either Bitcoin or Ethereum to your SoFi Invest account.
Keep in mind that you will need to establish a SoFi Invest® account and a SoFi crypto account before you can redeem rewards points into cryptocurrency and a minimum balance of 500 rewards points (worth $5) is required. While there is no fee when you redeem rewards for crypto.
BlockFi Rewards Visa Signature Credit Card
The Blockfi Rewards Visa Signature Credit card offers 3.5% back in rewards for the first 90 days (earning up to a maximum $100 in bitcoin) and then a 1.5% unlimited rewards rate. Once you hit over $50,000 on your annual spend you earn a 2% rewards rate on that spend.
BlockFi offers a wide variety of tokens to choose from including altcoins and USD-based stablecoins. (Note that the BlockFi interest account is no longer available to new customers in the US.)
Venmo Credit Card
The Venmo credit card allows you to earn 1-3% cashback in U.S. Dollars. The cashback you receive can then be used to purchase Bitcoin, Bitcoin Cash, Litecoin or Ethereum. As an extra incentive, Venmo waives certain transaction fees when you use your cashback earning to buy crypto.
Upgrade Bitcoin Rewards Visa Signature Card
You can earn 1.5% back on purchases in Bitcoin with the Upgrade Bitcoin Rewards Visa Signature card. The Upgrade card is tied to a line of credit, so you’ll need to make purchases then pay them off in full.
Crypto.com Visa Prepaid Debit Card
The Crypto.com Visa Prepaid Debit card requires staking to earn rewards. You select how much CRO you are willing to stake (for at least 180 days), and that will determine your reward levels, which range from 1-8%. For example, the Midnight Blue card earns 1% and requires no staking but Frosted Rose Gold and Icy White require staking $40,000 to earn 5%.
In addition, you can get airport lounge access, or reimbursement of certain subscriptions such as Spotify, Netflix depending on the card level you choose.
The Gemini credit card is another crypto rewards credit card that offers 1-3% back on eligible purchases. Specifically, you can earn 3% on your first $6000 in annual spend on dining purchases, then 1%; 2% on groceries and 1% on other purchases. The rewards are provided in the cryptocurrency of your choosing.
Do You Have to Pay Taxes on Crypto Rewards?
Crypto rewards will likely result in a taxable event at some point. Why will you probably end up paying taxes on your crypto rewards eventually? The IRS explains:
“The sale or other exchange of virtual currencies, or the use of virtual currencies to pay for goods or services, or holding virtual currencies as an investment, generally has tax consequences that could result in tax liability.”
The IRS offers several guides that cover crypto taxes but if you have questions about the tax implications of crypto, your best bet is to talk with a tax professional.