One of the earliest platforms to get onto the crypto bandwagon was the payments provider Square, back in October 2020 when it announced that it had converted a small percentage of its overall cash holdings, amounting to around $50 million, to Bitcoin. The company followed this up with yet another purchase, worth $170 million, a couple of months later, with the result that 5% of its total assets were held in the form of Bitcoin in 2020. The company, which was founded by Jack Dorsey, the co-founder of Twitter, has long been a supporter of cryptocurrencies, and it has now doubled down on this through its Cash App, where users will be able to send Bitcoin for free to each other.
While announcing this move, the Cash App team also announced a $1 million giveaway through Bitcoin. This move is another significant milestone for Bitcoin in terms of being used and accepted as a currency. Cash App has over 30 million users who have now been given free access to Bitcoin, while the fact that these transactions are free is even more important considering how transaction fees for Bitcoin are rising, and will continue to rise as more Bitcoin is mined and more transactions take place. Thus, Cash App could play a big part in any Layer 2 scaling solutions for Bitcoin transactions in the near future. This move will make it extremely attractive for Bitcoin owners to use the token to make payments online or send money to friends and family members, and will therefore increase the adoption of Bitcoin and crypto in the United States.
This move is supposedly in response to Binance Pay, which is a crypto payments app that was launched recently. This is another example of mainstream financial providers bringing crypto into their operations. PayPal had joined the crypto bandwagon last year when it announced that users would soon be able to make payments in crypto on its platform, and this has now been extended to users in the United Kingdom as well. Various institutional investors have put money into crypto, while the likes of Visa and Mastercard are also working on adding support for crypto on their payment networks. Crypto has also been adopted outside of financial markets and payment systems. A good example of this is the online gambling sector, where casino operators have begun using crypto to attract customers. One of the ways of doing so is by creating a BTC online casino i.e. online gambling websites where players can place bets through cryptocurrencies. They are also using blockchain to support these websites, which improves their safety and reliability, and the overall effect has been to increase traffic and revenue for these platforms, with more and more people interested in the benefits that using crypto brings online.
Many transactions on the Cash App are already free, and this move will make others free as well. For example, earlier, users would have had to pay a 3% fee for sending money via credit cards. Cash App has also played a big role in facilitating retail investment in crypto, since it has given regular users access to crypto markets. According to research by JPMorgan, retail investors have bought 187,000 Bitcoin so far this quarter, compared to 173,000 Bitcoin bought by institutional investors. This makes Cash App’s impact clear, and through this move, it is likely that even more people will enter crypto markets in the United States.
Jack Dorsey has been a proponent of crypto for a long time now, and this move is just the latest to promote crypto ownership and trading. Square can therefore play a leading role in the way Bitcoin trading will evolve in the near future through this initiative.