Cash App is a versatile financial app that offers a range of features, including money transfers, investment opportunities, and cryptocurrency purchases. Serving as a comprehensive financial tool, Cash App allows users to handle transactions, invest in stocks, and explore digital currencies like Bitcoin (BTC). The app aims to simplify financial tasks and assist users in navigating the modern financial landscape.
What is Cash App?
Cash App, developed by Block Inc (formerly Square Inc), is a mobile peer-to-peer (P2P) payment service that provides stored value services similar to deposit accounts. This innovative platform empowers users to access financial services without incurring the standard fees associated with traditional banks.
As a non-bank financial solution, Cash App enables individuals to transfer and receive money, pay bills, file taxes, and invest in stocks, all while enjoying the convenience of debit cards. With a substantial user base of 51 million individuals, Cash App offers an alternative to buying and selling Bitcoin on crypto exchanges.
The app’s expansion began in 2018, introducing cryptocurrency transactions limited to Bitcoin and establishing itself as one of the leading mobile payment apps in the United Kingdom and the United States. Starting from 2023, Cash App users can conveniently monitor their Bitcoin transactions and simplify the process of calculating taxes for BTC holdings using the TaxBit integration.
Buy Bitcoin with Cash App
Before purchasing Bitcoin through Cash App, there are several essential steps to ensure a smooth experience. First, install the Cash App and create an account. Then, link your Cash App account to a checking or bank account. Once the link is established, you can start buying Bitcoin. Additional security verification may be required to enable investment features, including buying Bitcoin.
It’s important to note that Cash App only supports Bitcoin transactions, and the investing balances are not insured by the Federal Deposit Insurance Corporation (FDIC) or the Financial Services Compensation Scheme (FSCS). However, there is limited coverage by the Securities Investor Protection Corporation (SIPC) for fiat investing balances. Remember these prerequisites for a hassle-free transaction process when buying Bitcoin on Cash App.
Steps to buy Bitcoin on Cash App
1. Launch Cash App and log in to your account.
2. Ensure that your Cash App account has sufficient funds. You can add money using your linked debit or credit card or receive direct deposits.
3. Tap on the “Investing” section at the bottom of the screen.
4. Look for the “Buy Bitcoin” option and tap on it.
5. Enter the amount of Bitcoin you want to purchase or use the slider to select a specific amount.
6. Enter your PIN and review the transaction details, including the current BTC price and any applicable fees.
7. Tap the “Buy” button to confirm your instant Bitcoin purchase.
Auto Invest Bitcoin on Cash App
The Auto Invest feature on Cash App allows you to schedule recurring Bitcoin purchases according to your preferences. By streamlining the accumulation of BTC over time, this function eliminates the need for manual transactions. Users can allocate a portion of their paycheck to Bitcoin consistently and spread out Bitcoin purchases to mitigate price fluctuations.
Steps to set up Auto Invest on Cash App:
1. Access the “Bitcoin Investing” screen and tap “Buy.”
2. Click the drop-down menu labeled “Change Order Type.”
3. Choose a frequency (daily, weekly, or every two weeks) and tap “Done.”
4. Opt for a preset amount or customize by tapping “…” and entering your desired amount.
5. Press “Next,” keeping in mind the $10 minimum for Auto Invest purchases.
6. Confirm your selection to set up automatic investments.
Cash App fees for purchasing Bitcoin
Cash App may charge fees for Bitcoin transactions based on the transaction size, and the current mid-market price of Bitcoin will apply to the purchase. The app also includes a spread, resulting in slightly higher purchase prices or slightly lower selling prices compared to the market value.
The margin may differ when buying Bitcoin using Cash App compared to selling it, and the fees can also vary from what is advertised on other marketplaces. Cash App imposes two types of fees during Bitcoin transactions: a service fee and an extra fee based on price volatility across U.S. exchanges. These fees will be displayed on the trade confirmation before completing the transaction, giving you the option to proceed or not if there is a disagreement with the final price.
Who can buy Bitcoin with Cash App?
To buy Bitcoin on Cash App, users must meet specific requirements. Users need to be at least 18 years old and of legal age in their residence state. They must be individuals, not businesses or other entities, and use the service for personal use only. Cash App is available in the U.K. and the U.S., and all 50 U.S. states can access the platform to purchase Bitcoin.
However, complete anonymity may not always be possible. Certain government-issued or digital currency transfers may require users to provide personal information such as name, phone number, address, taxpayer identification number, birth date, email, government identification number, and bank account details. Users may also be asked to disclose their source of funds and employment information.
Get Bitcoin with Cash App via Bitcoin Boost
Another way to acquire Bitcoin on Cash App is through the Bitcoin Boost feature. This allows you to accumulate Bitcoin with each Cash Card transaction. When you select a Bitcoin Boost and purchase a Cash Card, the earned Bitcoin is automatically added to your Bitcoin balance.
Steps to implement a Cash App Bitcoin Boost:
1. Access the “Cash Card” tab on your home screen.
2. Tap “Save with Boost,” choose a Boost, and click to add it.
3. Cash App does not charge any fees on Bitcoin Boost. For transaction-specific Bitcoin earnings, refer to your “Activity” tab and tap the relevant Cash Card transaction.
Security and safety measures offered by Cash App
Cash App complies with the highest security compliance standard for merchants that accept payments, the PCI Data Security Standard (PCI-DSS) Level 1. This means that as a user, your data is secure and encrypted.
While Cash App provides a convenient way to buy Bitcoin, it’s important to prioritize security. Consider implementing two-factor authentication (2FA) and using a strong and unique password for your account to protect your Bitcoin wallet and transactions.
By enabling 2FA, requiring a PIN for cash transfers, and activating alerts for account activity, you can enhance the security of your Cash App account. If your card is lost or stolen, you can deactivate it to prevent fraudulent charges. Additionally, avoid sharing sensitive information with anyone and be cautious of potential scams related to cryptocurrency purchases.
Drawbacks to buying Bitcoin via Cash App
While Cash App offers an alternative platform for buying Bitcoin, there are some drawbacks to consider. Firstly, if you’re an investor looking to diversify your crypto portfolio beyond Bitcoin, Cash App falls short as it only supports Bitcoin and does not offer other cryptocurrencies. Cash App’s investment options are limited, restricting your ability to explore various digital assets compared to traditional brokers.
Moreover, it’s important to note that Cash App’s Bitcoin and investing balances are not insured by the FDIC or FSCS, unlike traditional banks. This means that your funds held within the app are not protected in the same way as they would be in a bank account. However, investing balances may be covered by SIPC in some cases. In the U.S., Cash Card offers FDIC coverage for up to $250,000 of your Cash App account balance, ensuring security.
Therefore, if you’re seeking a more comprehensive range of investment options and the security of FDIC insurance, exploring dedicated crypto exchanges may be more suitable.