Spending Crypto – Post #5
Continuation from Spending Crypto – Post #4
This will be the last post on spending crypto, Post #5. It has only been 6 weeks of the experiment, well 6 weeks from the first transaction. The process total about 10 weeks now. (It took a long time to setup a crypto card.)
The Results:
Qualitative:
- It was easy but lengthy in time to setup
- First use of the crypto card was not a problem (in fact I have had no problems with usage)
- Nice app on the phone to go along with the card
- I'm impressed
Quantitative:
1. One transaction is still pending from over 40 days ago, at the time of purchase ETH was @ $251.07 based on the Card records, my records show ETH price was @ $257.84 ; today at time of this writing ETH is @ $131.65. That is one hell of a risk factor – “volatility risk” due to timing of the settlement as well as the price differential of my records to the cards records.
2. Another transaction was interesting and was not anticipated. This was a restaurant transaction, which includes the meal and a tip.
at the time of purchase ETH was @ $241.66 and $213.33 based on the Card records, my records show ETH price was @ $246.71
What actually happened was the meal transaction of $21.99 was completed that same day almost immediately @ the ETH price of $213.33 , however the tip portion of $10.00 was later settled the next day @ the ETH price of $241.66.
What about that 3% crypto back benefit?
Ha ha ha, don't fall for it. Volatility Risk negates any percentage back programs appeal. (Unless it was a “unit of account” and price did not fluctuate.) If you really look at what I mentioned on each of these unique transactions, the difference between the ETH price as per the Card was always a bit lower than the ETH price I documented at the time of the transaction. The math doesn't lie, it ranges between a 2-2.7% difference. LOL ... if someone needs further explanation I could go on and on, but its really not any crypto back!
Conclusion:
In an up trending market this volatility can be good for you, hut in a down trending market it can be bad. I can't wait to see what I really end up paying for the transaction that is pending since 40 days ago! It was a for gas, and right now it looks like it will have cost me 2x the amount since the market has turned down.
For myself, I like the card and vision of spending crypto, however, until a crypto becomes a “unit of account” the volatility risk factor is too high to go mainstream.
Best use case for spending crypto ... when the market shoots up and you want to sell. Instead of selling the crypto on an exchange for fiat, you could just use the Card. Just remember however volatility risk will never go away.
Best use case for spending crypto ... when the market shoots up and you want to sell. Instead of selling the crypto on an exchange for fiat, you could just use the Card. Just remember however volatility risk will never go away.
Thank you and ...
All Spending Crypto series:
Spending Crypto – Post #1
Spending Crypto – Post #2
Spending Crypto – Post #3
Spending Crypto – Post #4
Spending Crypto – Post #5
Credits:
Photo by Dmitry Demidko on Unsplash