Spending Crypto – Post #2

Continuation from Spending Crypto – Post #1

What good is crypto if you don't use it?

So I started down the path, a journey contemplating of using crypto by spending crypto instead of using the 2% cash back credit card. Again I am going to spend that money anyway, why not be a pioneer in the crypto revolution.

There are a few debit cards out there where you can spend your crypto, I won't go into specific cards and the reward benefits they offer. I have narrowed it down to one I think is pretty good that offers a debit card that pays 3% CryptoBack and 1% CashBack* on all purchases. So should be easy to just start using the crypto card instead of the credit card!

Implementing the Cryptoback plan, same as the Spending Crypto – Post #1 experiment.

So I have prepared to start using the Cryptoback Debit Card and pre-funded my account (since this is not credit) with crypto. Still waiting on the card to arrive.

But I started to ask myself some questions:

  1. Ok, I bought some crypto, pre-funding my card to spend. What tax implications will I have to deal with that spending with Credit Cards I did not have to contemplate?
  2. What if the price goes down, crypto is pretty volatile?
  3. Hey if it goes up in value that is just icing on the cake!
  4. Wait, if the price goes down, and I need to refill my debit card by pre-funding again! What about a Wash Sale rule.

Pre-funded my account

Lucky me, I decided to pre-fund my account and am just now waiting on the debit card to arrive. (Does it really take this long? seems like its been a month) I say lucky me because since prefunding the account, the crypto has increase in value from $3,000 to $4,786 at the time of this writing. Wow that great, I guess waiting was a good thing. But what if it went the other direction!


The plan is to just use this crypto debit card just like my cash back card and reap the benefits of crypto back instead of cash back. But when you buy crypto and spend it, you incur a taxable event. This could be a capital gain or a capital loss. So every month I will just refill the account and go about my normal day but now I have to manage and track these tax implications.

What is a Wash sale?

Very simply, a wash sale is when you sell lets say crypto at $1.00, you can't buy it back before 30 days at lower than $1.00 without triggering the IRS Wash Sale rule. If you buy it back at anytime for anything above the original $1.00 price, you have no Wash Sale worries.


Does that even apply to crypto? I am not sure.

Well to avoid this rule I could:

  1. Pre-fund my Debit card 2 months of spending ($6,000) and after 30 days pre-fund again the normal $3,000 spending monthly moving forward.
  2. Utilize more than just 1 crypto. By rolling from say XRP to ETH to Dash to BTC etc... I could just fund weekly and swap between them and not buy again until after 30 days time elapses for each one.
  3. Get very lucky and never have to worry about the IRS Wash Rules cause the crypto is always more expensive than the original buy price. (hahahaha, I wish)

So what do you do think, which one above is best? Give me a tweet @mirraeinc on twitter

Wait we forgot something!

Wait we forgot something! Read Spending Crypto – Post #3 to find out.

All Spending Crypto series:

Spending Crypto – Post #1

Spending Crypto – Post #2

Spending Crypto – Post #3

Spending Crypto – Post #4

Spending Crypto – Post #5


Photo by Dmitry Demidko on Unsplash