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How to spend Bitcoin with your Cash App card

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The Cash App card has many features such as discounts while shopping, direct deposits and instant transfers, but is there any way to spend that bit of profit your Bitcoin investment made?

The answer is: “sort of.” Cash App puts American users closer to spending their Bitcoin at stores than any other onboarding platform or exchange, but there is still a couple buttons that you will have to press.

How to sell your Bitcoin. Don’t worry, it’s quick. 

Unlike withdrawing your Bitcoin, there are no extra security steps to sell it. As long as you are allowed to purchase Bitcoin, you will also be able to sell it.

  1. Navigate to the Bitcon/Stocks page, on the bottom right side of your app.
  2. Press sell, then select how much you would like to get rid of.
  3. Confirm the transaction. The fee should be around 2%
  4. Funds should instantly be in your account, now you can spend it.

Cash App is the fastest way to spend Bitcoin in the U.S. 

In Europe, Coinbase has a debit card that allows you to choose between a variety of coins and spend them. Unfortunately, this is not allowed yet in the United States, and no other crypto exchange offers allows users to manage cash as closely to Bitcoin as Cash App does. Since Cash App allows direct deposits, one could receive payments from their employer through the app, immediately sell it for Bitcoin and be cash free until they need to make a purchase.

The only downside to this is that U.S. citizens pay “capital gains” taxes when selling assets for a profit. This can cost you 20% of the appreciated value depending on how much it is and what state you are in. Because of this, we recommend that you sell Bitcoin as infrequently as possible. At the end of the day, you will have to report all sales on taxes. Check out how to report Cash App Bitcoin transactions to the IRS here.

When will you be able to buy Ethereum on Cash App?

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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.Cash App supports Bitcoin Purchases

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:

Dorsey allegedly replied “no” to a tweet recommending that he “Buy ETH” which was later deleted:

Another damning tweet telling a fan that they’ll need to keep Coinbase for non-Bitcoin crypto:

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.

What cryptocurrencies can you spend using the Coinbase Visa debit card, and does it make sense to spend them?

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Launched in April, the Coinbase debit card allows European users to spend their crypto anywhere by swiping a card. Recently, they’ve been adding more and more crypto assets to pay with, and today, they listed the first stablecoin.

Crypto assets compatible with the Coinbase debit card

Bitcoin, the asset that everyone complains about not being able to spend, but probably shouldn’t be spending. Spending Bitcoin is like spending gold, it’s meant to be a store of value more than a medium of exchange.

Augur, also known as REP. This is a utility coin for a site that where you can gamble on things like ‘Will Trudeau still win the next election?” as if it were a derivative product. It’s been around for a while and claims to be “decentralized.”

Ethereum, the coin with the second highest market cap. Potentially analogous to Amazon in the dot com bubble, Ethereum is also subjectively likely to perform well. I wouldn’t buy coffee with it, but I do use it to pay for gas when wandering about the DeFi ecosystem.

Litecoin, one of the best possible names to help market an asset that is faster than Bitcoin. People with a limited understanding of the blockchain world know that Bitcoin is the O.G., Ethereum is supposed to be better than Bitcoin and Litecoin is fast. Ironically, Litecoin being fast is supposed to make people want to spend it without needing a central intermediary (like Coinbase).

Bitcoin Cash, or BCH. Again, aren’t you supposed to supposed to be able to spend this stuff without an intermediary? lol.

XRP, built by Ripple. Tons of huge corporations use Ripple for things like inventory management, but the price of XRP just never seems to go up. I guess this is one that you would want to spend?

ZRX, or 0x is a liquidity tool for Ethereum’s DeFi ecosystem. Developers admitted that their business model hasn’t worked out in the past, but they hope to change things with new updates. Right now it’s worth 20 cents, but with the hype around DeFi and how much decentralized exchanges need a liquidity solution, its future looks promising.

XLM, Stellar’s utility token, is required for every transaction in the network. Stellar is a cross border payment solution whose performance isn’t reflected by its price, much like XRP.

BAT, who hopes to replace the current advertisement business model for websites and content creators. This is actually kind of cool because you can earn it from viewing ads on the Brave Browser. Just a couple hundred minutes of Depends commercials and you can treat yourself to some nice Starbucks.

DAI, last but not least, is a stablecoin that is backed by mostly Ethereum and balanced by an algorithm of incentives. On Maker’s site, you can lock your Ethereum position up in exchange for a DAI loan that is paid back with interest. The Coinbase card is logical for this process. If you are going to spend your DAI loan, this is probably the most efficient way to do it.

Does using the Coinbase debit card make sense? 

If you read the snarky commentary on all of the listed crypto, you’ll have an idea of why spending some crypto might make more sense than spending others. But in reality, spending crypto might not even be the point of this card.

Watching mainstream media cover Bitcoin, you’ll often come across people who ask, “but can you spend it?” Coinbase’s card allows people to answer which is good for the market, and in turn good for Coinbase.

So yes, coins like BAT and DAI actually make sense to spend in certain situations, but the rest are supposed to be investments. If they weren’t supposed to be investments, Coinbase wouldn’t name the place you manage coins, your “portfolio.”

 

What is a crypto whale and how can you find them?

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Whale is a term unique to the crypto space even though they exist in every market. Basically, it’s an investor with a bag big enough to affect the price of an asset. The difference between crypto whales and those in the traditional markets is that there aren’t many institutional investors yet, which means it could just be a guy in his room.

Why are whales so threatening to crypto markets?

Nowadays, you’d have to be a pretty huge whale to impact the price of Bitcoin at any random time. Still, when an order is placed in at the right price and right time, it’s relatively small impact can trigger retail traders to enter or exit in mass.

bart

This is why the “Bart” pattern exists, and it is what people consider market manipulation. Some people’s definition of a scam is theft, and for other’s it’s simply misleading.
Market manipulation in this sense would be misleading traders to think that natural movement happened, and it’s quite effective.

Lower market cap coins are easier to straight up control. Since whales can afford to purchase or sell more of the total supply, they could at any time shift the market.

All of these examples are theoretical, based on common sense economics. It’s not like a scientists has sat down with a whale, told him what trades to make and done a study. At the end of the day, it’s folklore with a bit of logical reasoning.

How to spot a crypto whale

Corn.lol whale finder

There are a few depth finders you can use to spot yourself a whale. Don’t assume that speculating on their transactions is a secret key to predicting price action, but there are definitely traders take them into consideration.

corn.lol is an incredible order aggregator that many people keep running passively. It includes orders from BitMEX, Coinbase, Deribit, Bitfinex, Binance and more and lets users filter sizes of orders. Additionally, it shows liquidations among the exchanges that offer leverage.

Something a bit more indirect, but also interesting is a Twitter account called Whale Alert. Most of what this Twitter account reports is movements of crypto from unknown wallets to other unknown wallets. One way to interpret these movements is if they similarly sized and followed by large movements in price, a continuation of transfers could mean a continuation of that price movement.

Again, nothing is guaranteed, but at minimum watching these orders will give you an idea of how much money is moving around in the market, and the potential power one trader can have.

5 of 8 top blockchain venture capital funds are invested in games

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The Block published research of the top 8 crypto investors, and 5 out of 8 have money invested in blockchain-based games. Galaxy Digital, specifically has about 15% of their holdings in games while firms like Polychain and Coinbase Ventures hold a bit less.

blockchain investment research
Credit: The Block

Still waiting to see blockchain games reach the masses 

Games take a while to make, but it seems like the only topics that hit mainstream crypto news are investments in blockchain games or blockchain inclusion in mainstream games. It is rare to hear news about the performance of a primarily blockchain based video game.

The principle makes sense, in games like World of Warcraft, you spend hours grinding to receive items that only hold virtual value. Games like this have policies that ban players if they sell accounts or items for cash, which means that the virtual value can never be translated into physical value even though there is demand.

Some blockchain-based games are regular games that implement a physical economy and some have a steeper learning curve, requiring some sort of crypto deposit to play. The thing is, not many games have made it easy to siphon value out of the game even though it is encouraged. Games with blockchain implementation often require players to use an external market place to exchange, very few have one implemented.

Another detriment to blockchain based games is that inherently, they are focused on implementing a specific tech to a game rather than making a good game that implements new tech. It’s similar to the developing virtual reality market, we tend to hear way more about the capabilities of VR headsets than than any popular game you can play with them. With that being said, investing in blockchain gaming is understandable and a respectable decision by gaming enthusiasts, but it there isn’t much momentum yet.

Where is other blockchain money invested? 

In the research, they found that most investors have money locked in crypto exchanges. This makes a bit more sense because most popular exchanges have high leverage, high risk, which means more profit for owners. Exchanges in crypto often feel like casinos guised as a place to trade. There is an extent to where leverage is useful, but the line is crossed when sites like Binance offer 125x buying power. Crypto has a reputation of being volatile and making people rich. High leverage capitalizes on that and in the end, the house wins as usual.

There are promising games being worked on, like those on Hackernoon’s list, but all of them are still in progress. Let us know in the comments if there are any games that prove our opinions invalid, we’d love to hear about them.

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