Survey: Two-Thirds of BlockFi Rewards Cardholders Spend Less with Cash-back Cards

About two-thirds of BlockFi Rewards cardholders spend less with cash-back cards because they have a crypto alternative, according to a survey conducted by the firm.

The wealth management and trading firm for crypto holders unveiled its Visa rewards credit card for a handful of its US-based clients in July. The company at the time had 400,000 people on its waitlist, which formed in December 2020.

Though there are a few competing cards that offer price exposure to crypto, BlockFi’s offering is the only credit card that allows cardholders to keep the crypto they earn, Gaurav Gollerkeri, General Manager of Payments at BlockFi.

The card offers 1.5% back in bitcoin on all purchases. The more than 70,000 people using the card have so far amassed roughly 235 bitcoins (about $11.2 million at Tuesday’s price), according to the company. 

BlockFi announced three months after the launch that the average BlockFi cardholder was on track to spend $30,000 per year. 

“We believe everyone should be able to get involved in the crypto community, and we want to lower the barrier to entry,” Gollerkeri told Blockworks.

The survey, conducted in mid-November and released Tuesday, found that about half of the nearly 1,000 respondents use the BlockFi Rewards Credit Card for at least 75% of their total card purchases.

“Our users see the way the financial world is moving and are overwhelmingly switching their spending to crypto rewards cards and opting to save their crypto rewards for long-term gains as they grow their wealth,” Zac Prince, co-founder & CEO of BlockFi, said in a statement.

BlockFi introduced its Rewards Flex feature last month, which allows cardholders the option to earn their rewards in other crypto assets, such as ether (ETH), litecoin (LTC), chainlink (LINK), pax gold (PAXG), basic attention coin (BAT) or uniswap (UNI).

A majority of cardholders appear to prefer bitcoin rewards, as only about 5% of cardholders opted to receive their rewards in a crypto asset other than bitcoin after the feature’s release, according to BlockFi.

The BlockFi cardholders primarily hold the assets they earn, the survey also found. Eighty-nine percent of them retained their bitcoin and haven’t traded out of it for another type of crypto asset since starting their accounts.

BlockFi is working to deliver enhanced rewards at select merchants to enable clients to earn even more crypto, Gollerkeri said.

“We will be enabling clients to pay their credit card bill using stablecoins, which increases the utility of stablecoins held on our platform,” he added. “We also want to add more traditional credit card features such as adding authorized users, so that clients can earn even more rewards while helping family members build their credit history.”

The survey follows on another recently administered by BlockFi that found that one in 10 Americans are gifting crypto for the holidays. Bitcoin was by far the crypto of choice for gifting and receiving, with respondents labeling dogecoin and ether as their second and third choices, respectively.

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