Individual stock traders coordinating their behavior on Reddit have sent Wall Street into an absolute tailspin: A hedge fund has gone bankrupt while some traders have made actual millions.
Users in on the stock-pumping action have a few options for trading stocks. While most users use the trading app Robinhood, another app, called Cash App, is also reaping the benefits.
As users report, Robinhood seems to be attempting to get a hold on the free-for-all by blocking some trades of stocks the community is targeting for pumping, such as GameStop and AMC. But Robinhood is not the only option: The financial Cash App also enables extremely easy stock trading.
Cash App is currently number seven in the top free apps Google Play store, and 11 in the Apple App Store. People on Twitter participating in the stonks madness are advising others to download Cash App as Robinhood falters.
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What is Cash App?
Cash App, which is owned by Square, is kind of like a hybrid between the apps Venmo and Robinhood. You can buy and sell both stocks and Bitcoin, and you can transfer money between individuals. Cash App also has a debit card that offers limited-time cash back offers on purchase categories called "boosts." With both a debit card and account, it's a digital alternative to traditional banking.
It's free to use, and has cash incentives for inviting friends to join. All you need to do to start transferring cash is first download the app, connect it to your phone number, and add your bank account via a debit card. If you want to use the app to buy and sell stock or Bitcoin, you'll have to provide some additional information, like the last four digits of your social security number.
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How did Cash App get so popular?
Although created in its initial form in 2013, Cash App really started taking off only in recent years: It was the tenth most downloaded app of 2020.
In 2013, Square — the payments company started by Twitter CEO Jack Dorsey — launched Square Cash, the app which would eventually become Cash App. In 2018, it added the ability to buy and sell Bitcoin. The following year, it did the same for stocks.
Cash App is also an advertiser for podcasts including the Joe Rogan Experience, and Rogan has told his massive following of viewers to download the app. Rogan has also had Dorsey on his podcast where they discussed Cash App and Bitcoin trading.
While some users love Cash App for its cash back "boosts," most recently, Cash seems to have ridden the wave of renegade Reddit stock traders. According to Apptopia, U.S. users have downloaded Cash App 27 million times compared in the past six months, compared to 16 million times for Venmo.
Square's Q3 2020 shareholder report indicates that stock trading helped grow Cash App's popularity. It says that all Cash App transactions doubled in the year since it added stock trading, and that more than 2.5 million users have bought stocks using Cash App, with "billion of dollars" traded by October 2020.
Are there any downsides to Cash App?
There is a day trading limit, which you can read more about here. Like Venmo, Cash App charges a fee to send money using a credit card, and a fee for instant transfers to your bank account.
If you want an instant transfer, it will cost you.Credit: screenshot: Cash app / mashableShould you download Cash App?
If you want to have a one-stop shop for multiple aspects of your financial life, Cash App is a great option. Its cash back boosts can really add up, the money transfer interface is clean and simple, and it's perhaps perilously easy to start trading stocks and Bitcoin.
However, if all you're looking for is a money transfer app, you might be better off with Venmo or Zelle. It's likely that more people you know are already on these services, and they have fewer features to get bogged down in.
Additionally, Cash App has been hailed as a great trading portal for beginners. But if you want to get more serious about trading stocks or Bitcoin, it's worth it to look into other dedicated portals like Coinbase, Robinhood, or even perhaps a human stockbroker who could help guide you.
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