Square Inc. late Tuesday said it is expanding its Bitcoin pilot as the cryptocurrency continues to climb, briefly breaching the $13,000 level early Wednesday.
The pilot, which Square launched four weeks ago for what it said was a “small” number of Square Cash users, is now being made available to an undisclosed number of additional users, according to Twitter posts Tuesday night by Square chief executive Jack Dorsey and Square Cash staffers. Square Cash is a person-to-person payment service Square launched in 2013 that allows users to send and receive money via debit cards. The new Bitcoin feature allows users to buy and sell, but not send or receive, the digital currency.
Dorsey’s post, headlined “Turning on Bitcoin for a lot more cash app folks right now,” repeats the staff tweet, which reads, “We’re rolling out bitcoin to more of our most active customers. Swipe right from your Cash Card to see if you have it. #satoshi.” No information was immediately available regarding how many users “a lot more” refers to, nor whether the expansion is a step toward commercializing the Bitcoin capability. Responding to a request for comment from Digital Transactions News, a Square spokesperson says by email that “this is still only a pilot with a small number of customers.”
The move comes as Bitcoin continues to soar. It briefly exceeded $13,000 Wednesday morning after investors steadily bid up its price past the $12,000 level over a 24-hour period. As of midmorning Wednesday, it was trading at $12,970, giving it a market capitalization of nearly $217 billion, according to Coinmarketcap.com. Lending momentum to Bitcoin’s climb are moves by major exchanges to begin trading Bitcoin futures contracts. These contracts are expected to smooth out some of Bitcoin’s price volatility by allowing traders to bet on its future value.
While Square’s stock appeared to take a beating shortly after the company announced its Bitcoin beta, some observers argue the pilot’s expansion is a risk worth taking for the 8-year-old point-of-sale technology company. “Blockchain has the potential to change the way the world buys and sells things, and Bitcoin could be at the center of that,” says Rick Oglesby, principal at AZPayments Group, a Mesa, Ariz.-based payments consultancy. The blockchain is a distributed-ledger technology that allows traders in Bitcoin, as well as other cryptocurrencies, to keep track of transactions.
Expanding the Square Cash pilot is a risk worth taking because the upside potential exceeds the downside risk, Oglesby argues. “This is a toe-dipping exercise Square should be doing,” he tells Digital Transactions News. “They’re doing the smart thing.”
At late morning Eastern Time, Square’s stock was trading up 55 cents a share, at $38.15.