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Bitcoin bear markets are the best time to build, without the distractions of exciting price fluctuations during bitcoin’s bull run around the halving. Taking advantage of this great time to develop innovative products for the future, bitcoin startup Bold is building a credit card that’s backed by your bitcoin stack.
The Bold card will require no credit check. Instead, the credit limit is simply based on depositing bitcoin as collateral into a 2-of-3 collaborative custody multi-signature address where the customer holds one key. That key ensures their bitcoin savings are safe in cold storage on the blockchain where they deposited them.
Once deposited, a credit card is instantly issued for 35% of the value of the bitcoin. Spend fiat anywhere credit cards are accepted and get bitcoin rewards on every purchase - whether you want to travel the world or just pay for everyday purchases.
The Bold card has advantages over bitcoin loans because customers don’t start accruing interest right away. Your purchases in fiat accumulate on credit until your monthly statement and no interest is charged if the balance is paid in full. Bold will offer customers the option to make payments in fiat or bitcoin so they can suit their specific financial situation. It means bitcoin doesn’t have to get converted into fiat before it is spent.
Keeping a key to the bitcoin collateral is a major improvement over the vast majority of bitcoin loan offerings available today where the customer relinquishes complete control over their bitcoin. Those companies rely on rehypothecating bitcoin in order to make money, and are then subject to risks in the market and potential bankruptcy, which has happened all to often in the space.
Of course, with anything based on the fiat value of bitcoin, there is some volatility. So when the price of bitcoin drops, the spending limit on the card drops similarly. This is something that is top of mind today in the bear market. However, the flip side is that when the bull makes its run, credit limits will rise as well.
Author Bio:
Bold is an American company looking to advance the current state of payments for bitcoiners by offering a bitcoin-backed credit card that can be used globally. They help you safely store your bitcoin in a collaborative custody multi-sig wallet.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.