Cash App is one of the most useful apps on the market.
It’s available on Android, iOS, and can be used almost anywhere, just like your PayPal account. The thing is, Cash App has a chokehold on the market in a way that nobody else does. No bitcoin market can compete with them for a few simple reasons.
Cash App bitcoin traders pay less fees on average than the major marketplaces that offer BTC trading. We’re going to do a full rundown of Cash App, and why it just might be your best friend when it comes to buying, selling, and trading bitcoin with other people.
What Exactly is Cash App?
Cash App is an application developed by Square, Inc., who are best known for their product Square—a mobiel, card-swiping, chip-taking device that plugged into the 3.5mm jack of your phone.
Eventually, they upgraded to entire POS systems, multiple ways to take cash and card, and customer websites to sell items and services on. They’ve been around for a while, and know a thing or two about finances.
They developed Cash App almost like an alternative to PayPal. It’s a mobile banking app that doesn’t require you to actually tie yourself down to a series of physical banking locations.
You can send money to friends and family, or as payments, and you can even get a Visa debit card mailed to you with direct access to your app, just like a traditional debit card.
But then, Cash App did something amazing, and allowed users to purchase bitcoin straight through the app. Then, they allowed you to deposit bitcoin into your Cash App, and trade it as you see fit.
With access to instant transfers and ultra fast access to your money, it’s become the equivalent of Robinhood to the stock trading world.
Actually, speaking of that, you can purchase stocks through Cash App without having to spend a single dollar, so if you want to diversify your investments, this is the way to do it.
How Does it Work?
Cash App allows you to receive checks, payments, and receive money from multiple sources like an online bank account. A few years ago, they started including bitcoin in their trading platform.
Picture a giant curtain, and on the other side of it in the back-of-house operations, there’s a currency exchange that you don’t have to see, hear, or interact with. Instead of paying exchange rates and fees, and having to manually go in and trade your cash for bitcoin, you can do it in a few taps with the Cash App.
Because you’re given information just like an actual bank account, you can also sign up for direct deposit payments. You can send money to friends, usually without incurring fees if it goes straight to another Cash App account.
This is called a $Cashtag, which is basically the other user’s online ID. You can even send BTC to them through this method.
How Does BTC on Cash App Work?
By signing into Cash App, you’re greeted with your standard bank account-style wallet, which contains USD.
On top of that, you can maintain a BTC balance (no bitcoin cash right now), where you can then sell that bitcoin when the prices go up, buy when it’s low, and just maintain that bitcoin in Cash App, safely and securely.
When depositing bitcoin, you are able to store up to $10,000 USD worth of bitcoin in any seven-day period. If you deposit $10,000 in bitcoin on the 7th of any month at 12:10 PM, then at 12:11 PM on the 14th, you will be able to deposit more.
It runs on a full seven-day cycle, not just based on the days of the week. You can’t deposit on Sunday night, and then when the workweek starts again on Monday, do it again.
You can’t buy bitcoin by using a third-party card through Cash App. You can only use your Cash App USD balance to purchase bitcoin.
If you deposit USD, whenever those funds become available, you can use them to purchase bitcoin straight away. Currently, there is no limit on the amount of bitcoin that you can buy.
Depositing bitcoin and purchasing bitcoin are two separate things. When depositing bitcoin, it’s a little more involved: you have to transfer it from your current crypto wallet, or whatever it is that you’re using to store your bitcoin.
If you’re withdrawing bitcoin from your Cash App, you have to have at least 0.0001 BTC in order to complete the transaction. Anything less, and it’s not worth Cash App’s time or resources, since the fees will eat up most of, if not, all of the transaction in question.
When buying bitcoin through Cash App, it can take up to forty-five minutes or so for it to appear in your account. If you’re spending four figures on BTC all at once (especially for the first time), this can be very jarring, but your money is not lost.
You should receive confirmation from Cash App, whether an on-screen message or through an email, that your purchase of bitcoin has gone through, and will take some time to reflect on your account.
Under extreme circumstances, it has been known to take a few hours. These transactions should never take more than twenty-four hours, so if that amount of time persists, you’ll need to contact Cash App right away.
Last but not least, if you’re regularly investing in bitcoin every single week and you don’t want to wait for prices to fall out of favor, you can arrange weekly, automated bitcoin purchases through Cash App. Scheduling allows you to purchase daily, weekly, and bi-weekly depending on what you want to do.
Cash App Fees for Purchasing and Selling Bitcoin
You can only sell bitcoin if it’s in increments of 0.0001 BTC or more, and of that, Cash App will take a fee. These fees change from time to time.
You’ll also incur a fee for buying bitcoin. This can vary based on where you live and what state your Cash App is registered in, but just go forward assuming you’re always going to have to pay a fee.
Cash App and Taxes From BTC
Buying and selling bitcoin is considered an investment, just like a play in the US stock market.
When you buy or sell bitcoin, it affects your overall wealth for the tax year. Selling bitcoin, even if it’s for less money than you initially paid to purchase it, is considered an income, and must be recorded as such.
When it comes to filing your taxes, investments are one of the most hard-hit sections. The IRS will check your investments no matter what. That being said, it’s also one of the most complicated sections of your taxes, even if you’re using a tool like Intuit’s TurboTax to file every single year.
Cash App does something fantastic: they generate all the information that you need for your taxes, and make it available almost immediately into the next year.
That means that when it comes time to file in February, or whenever you receive your W2’s, Cash App will automatically generate a form for you to submit with your taxes.
This information can be used to manually fill in the blanks on your tax filing software, or simply be brought to your CPA or tax person when you’re filling. This takes all the guesswork out of taxation when it comes to your BTC investment.
If you sell a single scrap of bitcoin, even 0.0001, then you have to report it on your taxes. If you purchase even 0.0001 of bitcoin, you have to report it on your taxes. If your friend sends you free BTC in Cash App, you still have to record it on your taxes, because it’s an investment.
There’s this misconception that if you earn under $600 from an investment, that you don’t have to record it. To clarify, that’s for working a job that requires a W4 form.
If you worked a job at a gas station for a week, and it didn’t work out, then that $400 check is negligible to the IRS. Investments are always serious and need to be recorded, no matter the amount.
Can You Send BTCs via Cash App?
You most certainly can. If you’re sending BTC to a friend, all you need is their $Cashtag to send it to them. You don’t need any other information such as routing numbers, or any of that. It’s all done on the app.
This is done differently than sending BTC as a payment, however. When you send BTC to a friend, you can still incur fees, but depending on the amount, they may be waived. If you’ve ever sent money to friends and family via PayPal, you’ll be familiar with the lack of fees.
Is Cash App Safe for Bitcoin?
There’s an obvious trepidation that comes with a decentralized, digital-exclusive currency, but Cash App has been trusted for years now to handle bitcoin and keep it safe. Cash App is safe to purchase, sell, deposit, and withdraw bitcoin in any way that you see fit.
Safety is certainly not a current concern with Cash App, however, there are convenience factors that you have to work in. After all, this is a free service that Square, Inc. is providing, and there are going to be some pitfalls along the way.
Is Cash App Convenient?
It is convenient for BTC. It’s easy to send and receive BTC, but there are some restrictions—which you’ll run into on any marketplace, platform or app—that you need to be aware of before you dive head-first into Cash App.
BTC withdrawals are a thing. You can withdraw up to $2,000 worth of BTC in a single day, but only up to $5,000 in a single week, so 2 ½ days of max withdrawals for the week.
If you end up making some serious money with bitcoin, you have to sell on the platform, and then transfer that cash through another platform or buy more bitcoin on the app. Keep in mind, you don’t want to put all of your eggs in one basket because of that $5K restriction.
When it comes to bitcoin, the ability to send it to your friends, receive it from people, buy, sell, and even deposit bitcoin from another wallet into your Cash App is all fantastic. Withdrawals from your Cash App to other crypto wallets are also possible. It’s convenient in many regards.
Cash App does run into some issues with other forms of funding, though. I mention this here on a bitcoin article because it may affect how you fund your Cash App, and in turn fund your crypto wallet.
You can get a Visa card through Cash App, which adds to that convenience, but these cards don’t have lengthy expiration dates like they do from your standard bank.
Depending on the user, it can sometimes be a two-year card, or a four-year card. Activating a new card can take five business days, so you have to deactivate your old card, wait out five business days, and hope that it activates the new one in this time frame.
If most of your money is digital, you might run into further issues funding your Cash App. It currently doesn’t accept cash payments through Facebook or PayPal.
That being said, you can use a PayPal Mastercard (business class) to send money to your Cash App by making an invoice, and then paying it with that card.
Saving and Trading Smarter
Square, Inc. is known for making some truly fantastic advancements in payment-oriented apps, software, and even hardware in the past, which is why it’s at the forefront of BTC trading and depositing for the foreseeable future.
You can trade bitcoin on Cash App, pay people in bitcoin, and even accept deposits, giving you the option to get paid in bitcoin without having to pay an absolute ton of fees, like many marketplaces try to try from you. With Cash App, you’re in the driver’s seat.
Last Updated on June 16, 2020 by Eito