Buying Crypto with Plastic? Not So Fast, say Card Issuers

Discover Card is the latest credit card provider to announce it won’t allow its users to buy cryptocurrencies, ICOs or tokens with its cards, affecting over 44 million customers.

“It’s crooks that are trying to get money out of China or wherever. Or if someone steals our credit card numbers they’re going to ask for payments in Bitcoin,” said Discover CEO David Nelms.

“Those are the only use cases I’m actually seeing today. You know, black market stuff. It’s not like our customers are clamoring to use it.”

This from a man who was paid over $100 millions last year for promoting technology invented in 1972. He’s not the only one though.

Capital One Financial Corp has more than 80 million card holders with more than 200 hundred million cards carrying a staggering $80 billion in debt. Capital One will not allow customers to buy cryptos either, due it says to “an elevated risk of fraud, loss, and volatility.”

In total, a dozen financial companies, including the nation’s biggest credit-card issuers, have banned clients from buying cryptos, totaling nearly 80% of the American public and more than $100 billion in credit.

The policies follow myriad stories of crypto investors in the United States and South Korea maxing out credit cards on ICOs in the hopes that their speculation will pay off the card and make them rich.

To illustrate the point that cryptos are not practical currencies, the Wall Street Journal sent a reporter out in New York to see what he could buy with Bitcoin.

He paid $76 for a $10 pizza, bought $50 worth of porn for $250 and turned down an offer of an island in the Caribbean for 600 Bitcoin.

Replacing Visa

Critics of the banks and financial companies such as Discover and Capital One say Wall Street fails to understand that blockchain companies may very well put them out of business.

Ethereum co-founder Vitalik Buterin told AngelList cofounder Naval Ravikant that before Ethereum can compete with the likes of Visa and MasterCard the platform will need to speed up.

“Bitcoin is processing a bit less than three transactions per second,” Buterin explained to Ravikant. “Ethereum is doing five a second. Uber gives 12 rides a second. It will take a couple of years for the blockchain to replace Visa.”

Old-school financial companies are skeptical, yet fintech, software companies, and even airlines and hospitals are embracing blockchain and Ethereum in particular.

Microsoft, for instance, has announced its own Ethereum-based protocol, and the Russian airline S7 began selling tickets on an Ethereum-based platform.

Consensys, Ethereum’s think tank and incubator, has announced more than 300 initiatives under its protocol and is announcing four to five new ones every week.

Even healthcare, the most inefficient of industries by far, is getting in on blockchain. Quorum Health, the nation’s third-largest hospital chain, has announced an Ethereum initiative to track their supply chain, though it has no plans to accept crypto payments yet.

Bitcoin and Gold Slaying Stocks: Why Not Own Both?

The Bitcoin vs. gold battle rages on as the two are best-performing assets of 2020. The price of gold is up 26% this year, while Bitcoin has soared 87% —

Companies Pile On Debt. Big Headaches Later for Investors?

How have companies handled the cash crunch during this pandemic? I came across an insightful in-depth research report this past week that had a few interesting charts on this. See

Potential Options Payoff in Post-Covid China Rebound

The Chinese economy is starting to show signs that it is rebounding better than other economies around the world. China was the first country that had to battle the COVID-19

Retirement Income Tip: Buy High-Yielding Dividend Stocks

Imagine a scenario where you can make money while you sleep. Sounds too good to be true, right? Enter high-yielding dividend stocks. Now, there are lots of stocks in the

Beat the S&P 500 with These Specific Stocks

Today I'm going to briefly discuss a major error that most stock market participants make on a regular basis and ways in which you can substantially increase your stock returns.

Iaccino: Dollar Down, Stocks Higher, Plus PayPal Meets Bitcoin

A renewal of federal stimulus on top of monetary stimulus after the election is likely to support the stock market, says Bob Iaccino, editor of the Stock Think Tank. The

investor or pay off debt

Invest or Pay Off Debt? In a Pandemic, I’m a Stock Buyer

If you were to tell someone that you were putting any extra cash you had into the market instead of paying off debt, they might think you have lost your

bitcoin mass adoption

Bitcoin Mass Adoption Can’t Be Far Off — That Means Surging Demand

When you look at past technological developments — from the 19th century industrial revolution through the introduction of the telephone, personal computers, Internet, and smartphones — there is a typical

stocks overvalued

Is the Stock Market Overvalued? Not By This Measure

You many have heard the term “TINA” mentioned in various financial and investment commentaries in recent months. This is an acronym for “There is No Alternative.” It is built around a

clx options

Options Play: Take Advantage of Bearish Sentiment On Clorox (CLX)

We are in the middle of a global pandemic and one of the best weapons against the virus is cleaning surfaces with bleach. If we were to ask 100 people

This Predicts Bitcoin Price — and It’s Uncannily Accurate

Many investment advisors are beginning to recommend some exposure to Bitcoin (BTC) and some alternative (alt) coins, such as Ethereum (ETH). But the biggest hurdle for many analysts is how

retail spending

Retail Spending Shoots Higher, Suggesting Stocks Will Follow

Data released today by the U.S. Department of Commerce indicate that sales at U.S. retail stores rose sharply during September. Specifically, that data indicate that U.S. retail stores rose during