Key Points
- Cash App enables easy Bitcoin transactions, but requires ID verification and has certain limits and fees.
- Despite its convenience, Cash App may not be the best choice for those seeking control over their keys or dealing with other cryptocurrencies.
Cash App and Bitcoin Transactions
Cash App, a product of Block, Inc., has gained popularity for its simple dollar-zapping feature between friends using $cashtags. The app’s simplicity extends to Bitcoin transactions as well, allowing users to buy, sell, send, and receive Bitcoin right next to their stock slices and savings stash. However, it’s important to note that the app holds the keys when your Bitcoin is in it, meaning it’s not truly your wallet unless you withdraw it.
Before you can send any Bitcoin, you must verify your identity and have some Bitcoin ready in your account. This can be done by either buying it directly in Cash App using your linked bank or card, or by depositing some Bitcoin you already own from another wallet.
Bitcoin Transfers on Cash App
There are two main ways to send Bitcoin on Cash App: the old school way (On-Chain Bitcoin network) and the speedy lane (Lightning Network). The former involves sending to any Bitcoin address, while the latter is faster and cheaper, but requires the recipient to have a Lightning-enabled wallet. However, as of December 20, 2024, $Cashtag Bitcoin transfers are no longer available.
The cost of using Cash App for Bitcoin transactions varies. Sending fees depend on the speed tier chosen (Free maybe >$100, Rush/Priority cost extra), and buying/selling fees can add up, making it pricier than dedicated exchanges like Kraken or Coinbase Pro/Advanced Trade.
Pros and Cons of Using Cash App for Bitcoin
There are several advantages and disadvantages to using Cash App for Bitcoin transactions. The app is simple to use, provides a smooth bridge for buying Bitcoin with your linked bank or selling it back to your balance, and offers easy, cheap/free Lightning sends. However, it only supports Bitcoin, charges fees for buying/selling, and requires mandatory ID verification for Bitcoin use. Additionally, it’s a custodial service, meaning Block holds the keys and users must trust them.
Alternative Options
Cash App isn’t the only option for user-friendly Bitcoin transactions. Self-Custody Wallets like Exodus, Trust Wallet, Phantom, Mycelium, and Guarda offer full control and support a variety of coins. Other exchanges like Coinbase, Kraken, Gemini, and Crypto.com offer lower trading fees and a vast coin selection. However, these alternatives also come with their own set of pros and cons.
Ultimately, the choice of which platform to use for Bitcoin transactions depends on individual preferences and needs. Cash App is a solid choice for those who value convenience and mostly stick to Bitcoin, but those seeking control over their keys, wanting to handle other cryptos, or looking for the lowest fees may need to consider other options.
