Cash App is one of the most accessible crypto on-ramps for American citizens, and many others throughout the world. Right now, as long as you are willing to give Cash App your personal information, they will allow you to purchase a significant amount of Bitcoin with reasonable fees. This has Ethereum enthusiasts wondering when they’ll be able to buy ETH on Cash App.
Cash App still is figuring out Bitcoin’s business model
Unfortunately, Square has not said a word about adding support to Ethereum. In fact, they seem to be having trouble finding a profitable business model for Bitcoin. In Square’s quarter 3 earnings reports, it was clear that Bitcoin wasn’t making them much money. Square spent $146 million in operation costs for providing Bitcoin, and only brought in a revenue of $148 million, leaving total profits at $2 million. This was measly in comparison to their total $500 million in net profit.
Statement from Square‘s Q3 2019 shareholder letter:
In the third quarter of 2019, Cash App revenue comprised $159 million in subscription and services-based and transaction-based revenue, and $148 million in bitcoin revenue. During the quarter, bitcoin generated $2 million on gross profit.
Advocates of purchasing Bitcoin through a Cash App account liked to note that fees are significantly lower than on Coinbase for small purchases. Initially, Cash App made money through a price spread, which would cost tenths of a percentage on a $10 purchase in comparison to Coinbase’s 10%. After their 2019 Q3 earnings report was released, they switched over to a fee base model, similar to Coinbase’s but still cheaper for small purchases.
I say all of this to clarify that because they are still figuring out how to make decent money off of Bitcoin, they are unlikely ready to provide access to a less liquid token like Ethereum.
Would Cash App offering Ethereum pump the market?
When Bitcoin became available to purchase on Cash App, on of the most widespread financial apps in the world, what actually happened to the price? Crypto enthusiasts are always excited when their coin is listed on huge onboarding platforms, like Coinbase or Binance. One of the reasons Ethereum holders are even wondering if Cash App will list their token is because, let’s be honest, it has the potential to increase the value of ETH.
Bitcoin has been available for purchase on Cash App, in the U.S. since August 2018. During this time, price was ranging between $6.5k and $7k. A few months later, Bitcoin capitulated to its local bottom at around $3k. Basically, after Cash App allowed U.S. Bitcoin purchases, price still decreased by half and never returned to that $7k range until around 10 months later.
This is not to say that Ethereum has no chance of seeing positive price action from a Cash App listing though. Historically, Coinbase listings have had very positive effects on the price of some tokens. LINK, or Chainlink, for instance was listed in June 2019 and there were rumors of a listing dating back to April. During this time, the price of LINK increased to about 9x at its peak and has yet to drop back down to pre-April prices. Still, this type of price action has not been consistent with every coin listed on Coinbase.
If people could predict future values of assets, money would be free. There’s no real way to predict what would happen to the value of Ethereum with a Cash App listing, but it would undoubtedly allow more people to purchase it if they wanted to.
Has Cash App said anything about letting users buy Ethereum?
Jack Dorsey, CEO of Square (who owns Cash App), appears to be what one might call a Bitcoin maximalist. Here are some tweets where he has been transparent about his opinions of other crypto assets:
I only have bitcoin https://t.co/C24xNJxuFB
— jack ??? (@jack) February 5, 2019
Dorsey allegedly replied “no” to a tweet recommending that he “Buy ETH” which was later deleted:
— jack ??? (@jack) February 5, 2019
Another damning tweet telling a fan that they’ll need to keep Coinbase for non-Bitcoin crypto:
Working on it. But you’ll need to keep coinbase to buy fakebitcoin ?
— jack ??? (@jack) February 6, 2019
All of these tweets were written around a year ago, and he hasn’t made any comments on Ethereum since. There has been natural growth in Ethereum’s decentralized finance space, which has created tangible value. It’s really up to Ethereum’s community to convince people that their product is worth-while. Maybe as new Ethereum tech releases, Dorsey will become a believer.