Cash App, an all-in-one financial app, offers a range of features such as money transfers, investment opportunities, and the ability to purchase cryptocurrency. Acting as a comprehensive financial tool, Cash App grants users the ability to handle transactions, invest in stocks, and explore digital currencies like Bitcoin (BTC). The app’s objective is to simplify financial tasks and aid users in navigating the modern financial landscape.
What is Cash App?
Cash App, created by Block Inc (formerly Square Inc), is a mobile payment service that operates on a peer-to-peer (P2P) basis. It offers services similar to deposit accounts, providing users with access to financial services without traditional bank fees. As a non-banking financial solution, Cash App allows individuals to transfer and receive money, pay bills, file taxes, and invest in stocks. It also offers the convenience of debit cards. With a user base of 51 million individuals, Cash App provides an alternative to buying and selling Bitcoin on cryptocurrency exchanges. The app expanded its services in 2018, allowing users to engage in cryptocurrency transactions primarily involving Bitcoin. This established its reputation as one of the leading mobile payment apps available in the United Kingdom and the United States. Starting in 2023, Cash App users can efficiently monitor their Bitcoin transactions and simplify tax reporting using the TaxBit integration, making the process of calculating taxes for Bitcoin holdings more streamlined.
Buying Bitcoin with Cash App
Before purchasing Bitcoin through Cash App, certain steps must be taken to ensure a smooth experience. Firstly, install the Cash App and create an account. Then, link your Cash App account to a checking or bank account. Once this link is established, you can proceed with purchasing Bitcoin. Additional security verification may be required to access investment features, including buying Bitcoin.
It is important to note that Cash App only supports Bitcoin transactions, and 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. Keep these essential prerequisites in mind to ensure 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 your Cash App account has sufficient funds by adding money from your linked debit or credit card or receiving direct deposits.
3. Tap on the “Investing” section at the bottom of the screen.
4. Look for the “Buy Bitcoin” option and tap to proceed.
5. Enter the amount of Bitcoin you wish 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
Cash App offers an Auto Invest feature that allows users to schedule recurring Bitcoin purchases based on their preferences. This function streamlines the accumulation of Bitcoin over time, eliminating the need for manual transactions. By using Auto Invest, users can allocate a portion of their paycheck to Bitcoin consistently and spread out 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 it by tapping “…” and entering your desired amount. Press “Next,” keeping in mind that there is a $10 minimum for Auto Invest purchases.
5. Confirm your selection to set up automatic investments.
Cash App fees for purchasing Bitcoin
Cash App may charge fees for Bitcoin transactions based on transaction size, and the purchase will be based on the current mid-market price of Bitcoin. The app also includes a spread, meaning you may pay slightly more or less than the market value when buying or selling Bitcoin. The margin for purchasing Bitcoin using Cash App may differ from the margin for selling it, and prices can vary from those advertised on other marketplaces.
During Bitcoin transactions, Cash App will impose two types of fees: a service fee and an additional fee based on price volatility across US exchanges. These fees will be displayed before completing the transaction, giving you the option not to proceed 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 must be at least 18 years old and of legal age in their state of residence. Additionally, individuals, not businesses or other entities, can use the service for personal use only. Cash App is available in the United Kingdom and the United States, and all 50 US states can access the platform to purchase Bitcoin.
However, complete anonymity may not always be possible. Certain transfers involving government-issued or digital currencies 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 need to disclose their source of funds and employment information.
Getting Bitcoin with Cash App via Bitcoin Boost
Another way to acquire Bitcoin through Cash App is by earning it. The Bitcoin Boost feature allows users 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 utilize a Cash App Bitcoin Boost:
1. Access the “Cash Card” tab on your home screen.
2. Tap “Save with Boost,” select a Boost, and click to add it.
Cash App does not charge any fees for Bitcoin Boost. For transaction-specific Bitcoin earnings, refer to your “Activity” tab and tap the relevant Cash Card transaction.
Security measures offered by Cash App
Cash App adheres to the highest security compliance standard for merchants, PCI Data Security Standard (PCI-DSS) Level 1. This means your data is secure and encrypted. While Cash App provides a convenient way to buy Bitcoin, it is crucial to prioritize security. Consider implementing two-factor authentication (2FA) and using a strong, unique password for your account to protect your Bitcoin wallet and transactions. Enabling 2FA, requiring a PIN for cash transfers, and activating account activity alerts can enhance the security of your Cash App account. In case you lose or misplace your card, you can deactivate it to prevent fraudulent charges. Additionally, be cautious about sharing sensitive information and remain vigilant against 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, it only supports Bitcoin transactions and does not provide support for other cryptocurrencies, limiting your ability to diversify your crypto portfolio beyond Bitcoin. Cash App’s investment options are also limited compared to traditional brokers, restricting your access to various digital assets.
Furthermore, it is important to note that Cash App’s Bitcoin and investing balances are not insured by the FDIC or FSCS. This means that your funds 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 certain cases. In the US, Cash Card offers FDIC coverage for up to $250,000 of your Cash App account balance, ensuring security. As a result, dedicated cryptocurrency exchanges may be more suitable for investors seeking a broader range of investment options and the added security of FDIC insurance.