Vincent Van Code, a renowned cryptocurrency analyst, has voiced his concerns over crypto credit cards, describing them as a marketing strategy that financially harms users. His comments were triggered by the news of Gemini launching an XRP credit card.
Concerns Over Crypto Credit Cards
Van Code supports XRP as a digital asset but does not view crypto credit cards as an effective way to use it. He argues that these cards force users to sell XRP at lower-than-market prices, preventing them from securing the best possible rate. Additionally, every transaction incurs capital gains tax, complicating bookkeeping. Van Code refers to crypto credit cards as a 'scam' and 'marketing,' asserting that they serve the companies' interests more than the users'.
XRP as a Store of Value and the Role of DEXs
According to Van Code, XRP should be held and utilized strategically, selling it on an exchange or through a decentralized exchange (DEX) for maximum returns. This reflects a growing sentiment in the crypto community that users should minimize their reliance on intermediaries. With the development of decentralized finance (DeFi), more XRP holders are turning to DEXs as a more efficient trading method.
The Financial Reality Behind Crypto Credit Cards
Despite their convenience, crypto credit cards come with several financial drawbacks. Gemini has recently been criticized for its credit card, high fees, and value losses during conversion, often leading to a decrease in value compared to direct trading. According to Van Code, these drawbacks outweigh potential benefits, making them an unattractive option for those looking to preserve their holdings.
Van Code’s critique suggests that crypto credit card users face financial risks and hurdles in maximizing their assets, which is particularly relevant for XRP holders against the backdrop of current market conditions.
