#757 Earning Passive Bitcoin w/ Zac Prince
12/17/2021 · 26 min · transcript via mlx
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Key topics
— BlockFi's Bitcoin rewards credit card launched in summer 2021 with 3.5% cashback for 90 days, then 1.5% ongoing; 75,000 cards activated with $2 billion in projected first-year spending.
— Interest-bearing accounts and rate-setting mechanisms: BlockFi adjusts cryptocurrency and stablecoin rates monthly based on institutional and retail borrowing demand, not continuously like DeFi.
— Regulatory environment: BlockFi received cease-and-desist orders from New Jersey and other states regarding interest accounts; no orders have taken effect, and Zach expects positive regulatory clarity in early 2022.
— Card rewards behavior: 90% of cardholders hold all earned Bitcoin rather than selling; two-thirds have reduced spending on traditional cashback cards.
— Upcoming product roadmap: merchant partner programs with elevated cashback rates, stablecoin balance payments, roundup-to-Bitcoin feature, debit card, and expanded trading (derivatives, new cryptocurrencies, staking, DeFi).
— Credit card adoption metrics: average monthly card spend is $3,000 versus industry average of $1,500 for premium cards; zero waitlist as of interview date.
Market & price signals
— Pomp noted that Bitcoin appreciation has created outsized effective returns on card rewards—he observed earning 8% effective cashback at one point despite the stated 1.5–3.5% nominal rates, illustrating how Bitcoin price gains compound reward value over time. Zach's personal buying strategy during downturns ("long Bitcoin, short the bankers") and daily 0.25 BTC purchases at price dips reflect conviction in Bitcoin's long-term appreciation potential.
Actionable insights
— The BlockFi credit card offers asymmetric upside: nominal cashback rates appear ordinary, but if Bitcoin continues to appreciate, effective returns become substantially higher, making it potentially the highest-reward credit card available for long-term holders.
— BlockFi's interest-bearing accounts adjust rates monthly based on market conditions; monitor BlockFi.com/rates monthly to optimize allocation between cryptocurrency and stablecoin yields depending on market sentiment (bullish = lower crypto rates; bearish = higher crypto rates).
Episode sponsorships
Paid placements mentioned in this episode. BTC Pods is not sponsored by or affiliated with these advertisers. Links are included so you can find offers mentioned on the show.
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