With Crypto.com's Visa Card changes, are they still worth it?

Hi everyone, as a reminder, nothing on here is financial advice and everything here is for educational and entertainment purposes only. Please as always do your own research and find what investments might be best for you. 

What Happened to CRO?

I think it's safe to assume that if you're holding any CRO right now, you might have noticed that there was a significant downturn in price. I mean the rest of the market hasn't been doing too hot, but CRO in particular has made some really significant losses:


The main reason for this price crash is Crypto.com's unexpected and abrupt announcement that they are significantly downgrading all of their prepaid debit card benefits in efforts to preserve the long-term stability of the project. Now given the negative course of the current markets (and I mean ALL markets, not just with cryptocurrency) I am not really surprised by the downgrades. If you've been following the news, there's been significant downgrades to many platforms in the past few weeks, most notably Anchor Protocol, who for the first time downgraded their earning rate from roughly 20% APY to about 18% APY. What I am surprised by though was that there was absolutely little to no-advance notice given about crypto.com's downgrades. The official announcement came out on May 1st, and I'm not sure why it says "effective June 1st 2022" because the announcement clearly says that for new consumers the downgraded rates go in effect after 13:00 May 1st! The changes were so abrupt that at the time of this posting, the https://crypto.com/us/cards# website still does not have the updated terms.

What are the downgrades?

Before going any further, I highly recommend that you read my previous analysis of the Crypto.com prepaid debit cards. As we'll dive into the specifics, like in my previous article we will not only see what returns you can expect, but see how ridiculous some of these cards are. 

The announcement itself was divided into 3 separate parts. 

Downgrade A, Slashing Staking rewards: 


This was a significant slashing, especially considering the rates were once: 


In a nutshell, every single card for both staking and non-staking benefits were significantly reduced, if not eliminated altogether. Perhaps the most painful was for the Ruby Steel holders who were cut down 75% for active staking and 100% non-active staking, and then in second worst being the Royal Indigo & Jade Green, whose card holders had their rewards cut by 50% for active staking and by 66% for non-active. What's more is that the pain of these cuts is compounded by:


Downgrade B, Capping Rewards:



To be honest, Downgrade B is probably the biggest nothing-burger because as we'll get into Iater, the reduced CRO rewards rate effect the cards values the most.  

This now leaves...

Downgrade C, no more staking rewards:


This means that for new consumers, the amount you have staked, whether that's $400 or $400,000 worth of CRO will no longer be earning any rewards, so essentially you are simply left with a set of cashback cards earning CRO instead of cash, with subscription benefits you can get for your corresponding tier. 

*UPDATE 5/5/2022: Looks like they indeed backtracked and are offering staking rewards at 8% APY for private members with an Obsidian, Icy White/Frosted Rose Gold, and 4% APY for Jade Green/Royal Indigo cardholders. 


Is there a card worth opening?


Case 1: The Obsidian - Requirement $400,000 staked

If you were simply to put $400,000 worth of stablecoins right now in a platform like Midas at 20% APY, you would be able to earn approximately $6,123.79 in interest after one month.


This means that in order to make the same amount in cashback from spending money on your Obsidian card, you would have to spend approximately $122,475.80 just to nullify your opportunity cost. In other words, you would have to spend $122,475.80 dollars just in one month just to break even. Yes, I know that there are other rewards attached to the Obsidian, like Netflix, Airbnb discounts, Private Jet Membership, etc., however I would have an extremely difficult time valuing all those memberships at more than $6000 dollars a month. 

Verdict: Personally, if I had $400k I most certainly would be looking for better returns that didn't require me to be spending or locking up so much money. 


Case 2: The Frosted Rose Gold/Icy White - Requirement $40,000 staked

If you were to simply gain interest on $40,000 worth of stablecoins at 20% APY, you would be able to earn $612.38 interest after one month. Using similar math from spend alone, in order to break even over the course of 1 month you would have to spend $20,412.66 over one month. Now in this case $612.38 might be a bit easier to swallow, but I would argue that the subscription benefits still don't outweigh the interest you're missing out on: 

Spotify ($12.99) + Netflix ($13.99) +Amazon Prime ($14.99) + Expedia ($50) + AirBnb ($100) + LoungeKey ($12.50) = $204.47

Even with the $204.47 taken out, you would still be required to spend roughly $13,057 over the course of the month just to break even. 

And in case if you're wondering why I only value the Lounge Key membership at $12.50, it's because its still possible to get an annual Priority Pass (comparable if not better than LoungeKey) with certain credit cards, and the valuation is normally priced around annually around $150, or $12.50 monthly. This is still a generous valuation as Crypto.com values this at roughly $11 a month. 

Verdict: Not as ridiculous as the Obsidian, but in my opinion, still definitely not worth it. 


Case 3: Royal Indigo & Jade Green - Requirement $4,000 staked

If you were to simply gain interest on $4,000 worth of stablecoins at 20% APY, you would make roughly $61.24 interest after one month. The subscription benefits of the Indigo/Jade are significantly reduced, but assuming you're making full use of the Spotify and Netflix subscriptions, in order to break even on spend, over the course of one month with 1.5% cashback you would still be required to spend roughly $2,284. 

Verdict: OK we're getting less ridiculous now, but I would still just stick with a no-annual fee 2% cashback on everything card--there's plenty of them out there. 


Case 4: Ruby Steel - Requirement $400 staked

Lastly with the Ruby Steel, if you were to gain interest on $400 worth of stablecoins at 20%APY over one month, you earn roughly $6.12 in interest. Now obviously, this means that even if you don't put any spend on the card, you would essentially be getting a Spotify Premium membership for $6.12 a month. Now this alone might be worth it for some, but assuming you weren't interested in the Spotify membership, in order to break even you would have to spend roughly $204 dollars a month. But once again, you might as well open up a no-annual fee 2% cashback card to get more return without needing to stake anything. 

Verdict: If you're already spending full price on a Spotify membership, than you might as well be opening up a Ruby Steel. 



Because of all the slashed rewards, these cards are only worth it if you're spending 10's of thousands of dollars, and in the case for Obsidian you would need to spend 100's of thousands. The only decent value given by any of the cards is the $400 Ruby Steel, and that's only if you're interested in the Spotify membership. 



If you've been patient enough to read this article, let me know if I'm not calculating things correctly because I'm definitely not a mathematician. If you aren't a member of Crypto.com, and you're considering opening a card (only the Ruby Steel of course), then consider using referral link: https://crypto.com/app/xya2fj7g7a (if you're on a phone) or go to https://referral.crypto.com/signup? and enter my referral code xya2fj7g7a (if you're signing up on your desktop). That way, we'll both get $25 dollars worth of CRO, and as I mentioned before, with the price as low as it is now, it might be a good time to do so. 

Or else if you're interested earning 20% APY on your stablecoins (which like Anchor, won't last for long) , you can signup for a free Midas account if you haven't already, or else you can read about it more through my latest review

Thanks for reading and please follow me on my new twitter account @CryptosWith: https://twitter.com/CryptosWith


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Messin' With Cryptos
Messin' With Cryptos

I've made a ton of mistakes along the way in the world of Defi and cryptocurrency. Hopefully by taking some of the lessons learned and cues i've went through, you'll be a bit more success

Messin' around with Crypto's
Messin' around with Crypto's

Follow me on twitter! @CryptosWith https://twitter.com/CryptosWith

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