Some chosen users of the Square Cash platform are now able to buy and sell bitcoin.
TechCrunch reported this new development from Square, and Square's stock jumped to an all-time high of $41.80 per share. Some of these gains, however, were given up during the trading day. Still, the stock closed at $40.66 a share. This is up 2.3% at 5:18 p.m. ET, claims Markets Insider.
Square added the app feature to Cash, a competitor to Venmo, since users asked for this convenience. Square is still trying to determine how to make Square's Cash platform faster and easier. A small group of app users is testing the product.
Bitcoin, known for its crazy price swings, was trading up at $7284 per coin which is more than 10% from previous days. The upswing, according to Markets Insider, is due to Square letting some app users buy and sell the cryptocurrency.
Once the new feature is totally added, it will give Square the ability to compete with cryptocurrency exchanges like Coinbase and Gemini.
Credit Suisse analysts Paul Condra and Mrinalini Bhutoria feel the move could be a great boost for Square. There will be hurdles, but that's okay.
Square has the tendency to move slowly into new technologies. Cedit Suisse expects Square will move slowly with bitcoin purchases. The greatest risk is regulations that might limit the ability to provide the cryptocurrency service. With the addition of bitcoin, Square is exposed to counter party risk since it will be required to source bitcoin for users by using and exchanges or pre-buying. The risks are minimal, and the profits could be significant if cryptocurrencies become more globalized.
Square's interest in bitcoin shows that a major financial service firm is looking at the profit opportunities in the cryptocurrency market.
A blockchain technology company, StormX, added that its CEO Simon Yu, believes the news is a tremendous development for the cryptocurrency market.
According to Yu, "(there will) be a call to action to invite other forward-thinking firms in embracing the new token economy.”