I predict the Square Cash App BTC rollout will be detrimental to BTC... When millions of users try to withdraw from the Lightning Network to on-chain BTC my guess there will be severe on-chain congestion and transaction fee spikes.

Square (Block) has launched automatic Bitcoin payments for millions of U.S. merchants, enabling them to accept Bitcoin at checkout with zero processing fees through 2026 and near-instant settlement via the Lightning Network. Bitcoin Conversions allow eligible sellers to automatically convert 1% to 10% of their daily card sales directly into Bitcoin, which is deposited into their Cash App account daily; this feature includes a 1% conversion fee and is available to U.S. merchants excluding those in New York. In a major rollout for November 2025, Square began enabling these Bitcoin payment capabilities by default for roughly 4 million merchants worldwide, allowing instant transactions without the need for manual setup or holding Bitcoin volatility. Cash App Integration: Users can withdraw up to $10,000 daily and $25,000 weekly, making it a primary on-ramp for Bitcoin in the U.S. Future Goals: Block aims to integrate Bitkey self-custody wallets with Square to allow automatic sweeps of Bitcoin payments to self-custody by 2026. Revenue Impact: Cash App's Bitcoin revenue surged 1,000% to $1.63 billion in Q3 2020, highlighting the platform's significant financial growth in the sector.

Cash App does not automatically convert Lightning Network Bitcoin holdings back into on-chain Bitcoin. Instead, the conversion happens manually when a user initiates a withdrawal. Here's how it works: Lightning for Speed: The Lightning Network is used for fast, low-cost transactions within the Cash App ecosystem and for sending/receiving small amounts. On-Chain for Withdrawals: When a user chooses to withdraw their Bitcoin to an external self-custody wallet, Cash App executes an on-chain transaction. This process moves the Bitcoin from its internal Lightning/custodial system onto the main Bitcoin blockchain. User Control: The user triggers this conversion by selecting the "Withdraw Bitcoin" option and providing an external wallet address. The Bitcoin is then sent via the standard blockchain, incurring a network fee. In essence, the Lightning balance is a fast, internal ledger for spending and receiving, while the on-chain network is used for final settlement and moving funds out of the Cash App platform.