By James Davis
If you are looking to acquire your first Bitcoin, you don’t have to do it on a crypto exchange anymore. That’s because multiple FinTech platforms, like Revolut and Cash App, are now offering users the opportunity to purchase cryptocurrencies directly on their apps. In this guide, we will focus on Cash App. We will teach you how to buy BTC using the platform.
What is Cash App?
Cash App ranks among the top payment apps in the world, enabling customers to send and receive funds electronically. The platform was founded by Bob Lee in 2013. You can use Cash App to make peer-to-peer transactions and pay online purchases.
A recent report by Business of Apps revealed that Bitcoin transactions accounted for a significant percentage of the Cash App’s revenue in the 2022 financial year. Per the report, the FinTech platform collected $7.1 billion in fees from BTC transactions. Notably, Cash App collected trading fees worth $10 billion in 2021.
How Do You Purchase BTC on Cash App?
Before buying Bitcoin using Cash App, you need to register an account and then deposit funds. The following details will be required when setting up an account: Full name, residential address, date of birth, and employment status. After providing this information, wait a few minutes for the Cash App team to verify it. Once approved, you will be ready to purchase Bitcoin. Here is how to do it:
Step 1: Go to the Bitcoin section on the Cash App homepage and click “Buy.”
Step 2: Choose your preferred order type. You can select one-time order, which involves buying BTC only once, or Auto Invest, which requires you to set up automatic daily, weekly, and bi-weekly purchases. You can also opt for the custom purchase order. Here, you will need to predefine the price at which you wish to buy Bitcoin. Cash App will then execute the trade automatically if the price is hit.
Step 3: After choosing the order type, enter the amount of money you want to spend on the Bitcoin purchase and click “Next.”
Step 4: The next page will show the transaction details, including the fees charged and the amount of BTC to be deposited in your account. Input your Pin and click “Confirm” to approve the transaction.
What Consider When Purchasing Bitcoin Using Cash App
Here are some important aspects you must consider before using Cash App to buy BTC.
Limits and Trading Fees
As mentioned earlier, Cash App generates revenue from collecting fees. Therefore, expect to incur some charges when buying Bitcoin on this platform. Before confirming your BTC purchase, Cash App lets you preview the fees to be charged, allowing you to decide whether to continue with the transaction.
Note that the FinTech app does not explain what criteria it uses to determine the fees. Nonetheless, the charges are usually about 3% for small purchases and reduce the more BTC you buy.
Moreover, Cash App doesn’t impose commission fees on customers who invest through their brokerage accounts. Also, no fees are charged when opening or transferring funds to your Cash App account.
However, the platform incurs regulatory fees, which it passes on to its customers. Those fees are paid to Financial Industry Regulatory Authority (FINRA).
In terms of limits, most FinTech apps have a cap on the amount of funds customers should spend on crypto purchases, usually between $1,000 and $10,000 per month.
Safety Measures
For security purposes, Cash App stores your Bitcoin in cold wallets as they are considered safer than hot wallets, which can easily be targeted by cybercriminals. Further, the platform is audited regularly to ensure it maintains integrity.
Crypto Price Volatility
Before purchasing Bitcoin, beware that its price is subject to high volatility stemming from a number of factors, like the speculative nature of the crypto market, market sentiment, and regulatory uncertainties. That said, you could lose your funds within minutes. Therefore, invest an amount you are okay losing.
Conclusion
With several top FinTech companies now supporting Bitcoin trading, there are good chances that cryptocurrencies will witness mainstream adoption soon. Although the fees could be cheaper, Cash App provides a convenient way for novice crypto users to acquire Bitcoin.