Bitcoin gift cards now available for sale (get $100 for $99)

There is a new “Bitcoin Gift Card” available for sale digitally in the US. It is essentially a gift card you can redeem with a website for Bitcoin, which could be interesting for those who have been unwilling to provide bank account info to exchanges or not interested in a private sale of coin. It may also be interesting for those who like to spend and get most of it back, but the jury is out on that part.

A company called Bitcoin Solutions has partnered with Chain Bytes and Savvy to produce these gift cards, which are reportedly now available digitally from many retailers in the US and will supposedly soon be available at traditional brick & mortar stores in the near future.

Once you receive a gift card, you’ll need to go to www.mybitcards.com to redeem it (those who are new to Bitcoin will first have to create a Bitcoin wallet).

Update: There is conflicting information about what follows. See the added information below it.

The interesting thing is that if you receive a gift card as a gift and you don’t want Bitcoin, the MyBitCards FAQ page says that it will be possible to cash in the gift card for US dollars, though it’s unclear whether or not that will be a good deal.

Perhaps there is only a charge if you prefer a check over an ACH transfer? Or perhaps there are different fees depending on the cashout method? Could this be a good way to earn rewards and/or to liquidate gift cards? I’m writing this post before having a chance to try this out, so we do not yet know for sure.

However, that seems to conflict with the Gift Card Granny Terms and Conditions for Bitcoin Gift Card sales, which says:

Transfers may not exceed $200 per day or $2,000 per rolling 30 days. This card can only be used to redeem Bitcoin through our website, not for cash.

We’ll post an update when we know for sure.

However, as shown near the top of this post, Gift Card Granny is selling the $100 Bitcoin gift cards for $99, so it’s worth it to me to check this one out to see if it is worth it. We’ll post again with results when we know the entire process, but at the very least this looks interesting. If you’re actually interested in buying Bitcoin, I can’t imagine this will make much sense. The company obviously has to recoup any costs associated with this gift card business and still earn a profit, so I would be surprised if their Bitcoin prices aren’t inflated proportionately. That said, I’m far from a Bitcoin expert. If you’re more versed in trading it, please feel free to weigh in through the comments below.

See the full press release on these gift cards here.

Regarding comments: Comments posted at the bottom of Frequent Miler pages and posts are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

About Nick Reyes

Nick Reyes is a (fairly) regular guy with an animalistic passion for maximizing the value of miles and money to travel the world in comfort and style. There is little in life that he loves more than finding a fantastic deal and helping you shop smarter & harder to achieve your travel dreams.

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GeoffB
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GeoffB

The real issue is the price of bitcoin you get to buy with these is grossly inflated vs real market. If you have no other way of buying, then sure, but you’re paying ~10% premium over market to do this, so you’d better get a sweet discount.

John
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John

I have tried it. Bought at 1% discount, but then by the time you factor their inflated price and transfer fee, I actually received 8.24% less than the face value I bought. Not viable IMHO

Peter
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Peter

Another option is to buy discount gift card with bitcoin on coinforcard.com if you don’t want bitcoin. Probably still not worth it.

Joseph Stern
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Joseph Stern

Here’s a website that shows recent transaction fees:

https://bitcoinfees.info/

That’s approaching 0.5% alone.

Then, if they aren’t selling to you at a good rate, this doesn’t sound viable.

Any way to know the rate?

Nick Summy
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Nick Summy

This is the transaction fee, i.e. what it costs to send bitcoin to another wallet. Don’t confuse that with the rate, which is the exchange rate. Picture buying bitcoin as changing dollars for a foreign currency. This will give you an idea of what it is trading for: https://coinmarketcap.com/currencies/bitcoin/#markets

Adam
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Adam

The real issue is in Bitcoin price volatility. It isn’t unheard of the price of a single Bitcoin to swing by hundreds of dollars in one day. I would say you’re probably better off not trying this one, unless they are offering the USD cashout at a fair rate.

rdover1
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rdover1

Please update this post to highlight the extreme risk involved. This is essentially like having gift cards for foreign currency except the value of that currency can swing wildly for no tangible reason. Too many people will dive in thinking bitcoin fortunes, but many will be burned. This is like FOREX trading but way more risky.

The company behind this will be laughing as their business model is the interchange and transaction fees. They have no risk.

Mike
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Mike

Theoretically, this is amazing. I just went through the process, and it looks something like this: 1. Redeem your gift card for BTC. You get $100USD at the BTC-USD exchange rate that MyBitCards provides. 1a. Deposit this DIRECTLY to a wallet you own on an exchange, like Coinbase. There is no fee so far. 2. Convert the BTC to USD on the exchange. I used Coinbase Pro, and it cost me 28 cents.

Here’s the issue: the exchange rate that MyBitCards uses is out of date. It’s a complete mystery where it comes from other than – from their FAQ – “The Bitcoin we sell is priced at the time we acquire bitcoin. Our bitcoin is purchased through various exchanges, over the counter, and other sources.”

Right now, it’s quoting the price at $4300 USD-ish, when in actuality, the price is $3900-ish. So I lost 9 dollars in the whole transaction. If it was using an actual exchange price, this would be a great way to churn. BTC fees are SO low now, so it would be negligible to transfer. Unfortunately, it looks like MyBitCards is trying to limit their downside and skim from the top by quoting ridiculous BTC-USD rates.

rdover1
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rdover1

This is just like a FOREX spread (but a bit larger due to volatility). Ever go to a Travelex Foreign exchange bureau? The price they will sell you a currency is always inflated by around ~3-8% over the market, and the same on the buy side. High spread when they advertise “Zero or low fees”.

Saving the bitcoin price is $4.3k vs. market of $3.9k means a 10% spread (in their favor).

Mike
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Mike

100%. IMO, they’d do better just taking an actual fee on the transaction itself rather than inflating the price. Less money in that (obv), but there is no way anyone in their right mind would pay 10% over the actual exchange rate. You can buy on Coinbase with a credit card already (you used to be able to use gift cards, but they prevent that now)… at the correct exchange rate.

duffman
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duffman

I doubt this product is for “anyone in their right mind”. I remember when there were folks were touting a great new “MS opportunity” to buy BTC with a 3% fee on Coinbase

Sara
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Sara

Coinbase stopped excepting credit cards a while ago. They have been mostly all cut off by the credit card providers.

Mike
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Mike

On a separate note, this ignores tax implications. You’ll be taxed on short term capital gains when you cash out on an exchange, if you pay your taxes properly.

Nick Summy
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Nick Summy

Its obvious they are charging a premium that is baked into the exchange rate. There is no fee to buy or redeem these cards. The retailer has to make money on the sale. This company has to make money on the sale. I think its also telling that they don’t sell these directly and rely on a 3rd party.

DavidD
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DavidD

Very interesting.

Sara
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Sara

I think this product is operating like a Visa gift card. A Visa gift card you buy at the grocery store charges $3.99 – 5.99 for a $25, $50 or $100 visa gift card. That’s a 6%-16% surcharge just for a cash on cash purchase. It seems to be a convenience product. If you are a savvy bitcoin buyer, then I don’t think this is for you. But if you are not technically inclined, don’t want to hook up you bank account to an exchange, just want to buy a little, or give as a gift, then it appears to be a great idea….. Just my 2 cents…..

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Adam J
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Adam J

Well I have used them a few times. Yeah the price they value Bitcoin at is much higher by about a 10% markup. I think its just a little less. Its not terrible though compared to other places to buy Bitcoin with credit card/debit card. Other places will charge you 3.99%+ on credit card buys, they also markup the buy price of Bitcoin and they will also charge you a network fee to transfer the Bitcoins to your wallet. So MyBitCard is not terrible, its still a little more expensive then some places.