Payment Firm Square Tests Bitcoin

Square Inc., the payment company, disclosed that it has begun to allow a select few of its customers to use its Cash app for buying and selling Bitcoins. The company is simply hoping to tap into the new cryptocurrency hype that sent Bitcoin up this year by almost 7 times. In terms of market capitalization, Bitcoin is the largest cryptocurrency available and it is also the first of its kind. However, it is important to note that even though it has successfully outperformed all the traditional currencies of the world, the institutional investors still continue to stay away from buying and selling Bitcoin.

Best recognized in the market for enabling merchants to process and accept credit card transactions without an expensive system or cash register, Square has stated that a number of its customers have expressed their interest in using this ‘alt-currency’. A spokesperson for the company said that they are always paying attention to their customers and they have discovered that the people are interested in using the Cash app for making investments in Bitcoin. The company said that cryptocurrency can have a huge impact on the ability of people in participating in the global financial system and they were looking forward to learn more.

As far as traditional investors are concerned, they regard the cryptocurrency as highly speculative and opaque, which means there is a potential of collapse. Moreover, the legitimacy of the currency has also been questioned several times as it is believed to be associated with the online black market, the Silk Road, where drugs are sold illegally. A number of Bitcoin exchanges have been forced to close down in China whereas the central bank in Russia has said that they would impose a ban on all websites trading cryptocurrency. The term ‘fraud’ has been used to refer to cryptocurrency by Jamie Dimon, the Chief executive at JPMorgan Chase & Co.

Regardless, none of these activities have deterred investors of Bitcoin in any way as they continue to invest in the cryptocurrency, which has attracted the attention of exchange operators in the US. Last month, the largest derivatives exchange operator in the world, CME Group Inc. said that they will be launching a futures contract for the cryptocurrency in this year. Earlier this year, their rival Cboe Global Markets Inc. had made an announcement about a Bitcoin exchange traded fund and now they are waiting for getting regulatory approval.

According to analysts and experts in the market, Bitcoin or similar other products will soon be offered by major financial firms for the purpose of investment. They said that within six months, a product would be launched that will become a turning point. In the meanwhile, Square did not reveal when they rolled out the feature to select customers or when it plans to offer to the rest of its customers. The announcement of this addition caused the company’s share price to rise up by 1.8 percent as they hit $40.44, but coming down from a record high of $41.80.