- Bitcoin was on a tear Wednesday after mobile payments company Square confirmed it was letting some people buy and sell bitcoin on its Cash app.
- Bitcoin was trading at $7,284, up more than 10%, at 5:18 p.m. ET. Square, on the other hand, ended the trading day up 2.3%.
Square, the mobile payments firm, is running a trial that allows some users of its Cash platform to buy and sell bitcoin.
The news, which was reported by TechCrunch, sent Square's stock to an all-time high of $41.80 per share soon after the markets first opened. It gave up some of those gains during the rest of the trading day and closed at $40.66 per share, up 2.3%.
Bitcoin is also in the green today. The cryptocurrency, known for its wild price swings, was trading up more than 10% at $7,284 per coin at 5:18 p.m. ET, according to data from Markets Insider.
Square added the feature to Cash, a rival to Venmo, because users asked for it, the company said in a statement. The company is still trying to figure out how to make it "faster and easier" and is only offering it to a "small number" of Cash users, it said.
The new feature will allow Square to compete with cryptocurrency exchanges such as Coinbase and Gemini.
A research note penned by Credit Suisse analysts Paul Condra and Mrinalini Bhutoria said the move could be a tailwind for the company, despite some hurdles. Here's the bank (emphasis ours):
"Given SQ’s tendency to move judiciously into new technologies, we expect it will do the same with bitcoin purchases. We believe the largest risk is regulation, which could limit its ability to provide the service or outright ban it. SQ is also exposed to liquidity and counterparty risk as it must source bitcoin for users either by pre-buying or using an exchange. Despite these risks, the upside could be significant if crypto currencies become more mainstream."
As for bitcoin, the Square news is the latest example of a mainstream financial services firm showing interest in the profit opportunities in the booming cryptocurrency space.
Simon Yu, CEO of StormX, a blockchain technology company, said the news is a "fantastic development" for the cryptocurrency ecosystem.
He said it will "undoubtedly be a call to action to invite other forward-thinking firms in embracing the new token economy.”
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