As the price and popularity of Bitcoin and other cryptocurrency has surged, companies have been making it easier for interested investors to buy in.
Fintech giant PayPal, for one, has made buying, selling, or holding Bitcoin, Bitcoin Cash, Ethereum, and Litecoin as simple as clicking a button within the app or online dashboard. You will need to have your bank account or debit card connected in order to do so.
While PayPal does make buying crypto convenient, it’s important to note that you can’t move it or transfer it outside of the app or digital wallet. On other cryptocurrency exchanges, users get a public address for receiving transactions, and private keys to access their account and send digital currency wherever they choose. You also have the option to transfer crypto to anonymous third-party wallets.
When you buy through PayPal, you don’t get a private key or a public address. While this protects you from fraud and scams, it does limit what you can do with Bitcoin and other crypto.
If you want to see if buying cryptocurrency through PayPal is for you, and a step-by-step guide on how to do it, check out our full article below.
Buying cryptocurrency ten years ago took some real insider knowledge and a particular set of tech-savvy skills. By the time Bitcoin started making some serious waves and hitting all-time highs in 2017, many mainstream exchanges and companies had emerged to meet the needs of any interested investors.
These days, many companies have made it even easier, including fintech giant PayPal.
PayPal users in the US or UK who want to invest in key cryptocurrencies can do so with a click on the PayPal app now. With a single click, you’ll be able to buy, sell or hold Bitcoin, Bitcoin Cash, Ethereum or Litecoin.
Investors should keep something in mind though – buying Bitcoin with PayPal isn’t quite the same as using other Bitcoin and cryptocurrency exchanges. While it is one of the most convenient ways for amateur investors to get into the crypto game, there are limits compared to investing through other avenues, such as investment apps like E*Trade.
In this article, we’ll show you how to buy cryptocurrency through PayPal accounts, the pros and cons of using PayPal to buy Bitcoin, and look at if investing through the financial service is right for you.
How to Buy Bitcoin with PayPal: A Step-by-Step Guide
If you’re comfortable with PayPal and want to get right to it, we’ve cooked up a quick guide for you. We’ll also discuss if PayPal is the right choice for you, especially if you are looking to make a larger investment. Just follow the steps below and you’ll be holding Bitcoin or a few other crypto coins in no time.
1. Set up an account with PayPal
First things first, if you don’t have PayPal, you’ll need an account, of course. At the moment only users in the United States and the United Kingdom can buy or sell cryptocurrency through the app.
You’ll need to verify your identity, set up some security measures, and take some steps such as linking your bank account, debit card, or credit card to create a PayPal balance account. To buy Bitcoin, you’ll need to have a bank account and debit card registered and linked to your account. You’ll also need to provide up-to-date tax information, as crypto gains are subject to government tax.
2. Click “Crypto” on the dashboard
On the main dashboard (home page) you’ll see your PayPal balance and underneath it Crypto. When you click on Crypto, it will take you to a screen where you can see recent price changes of Bitcoin, Bitcoin Cash, Ethereum, or Litecoin.
3. Click on Bitcoin, Bitcoin Cash, Ethereum or Litecoin
PayPal makes four of the most time-tested and stable cryptocurrencies available to users. When you click on one, you’ll be directed to a graph – similar to a stock or index chart – that shows the price movements of each given cryptocurrency over days, weeks, months, and years.
Once you’ve settled on which stablecoin to buy, you can choose between making a $1, $20, $50, or $100 investment, or entering a different amount. You can start with as little as $1 once you’ve got your debit card or bank account linked up. If you want to invest more, the maximum amount is $100,000 per week.
4. Agree to terms and conditions
You’ll need to agree to some terms and conditions from PayPal if you want to buy, sell or hold Bitcoin or other crypto. Due to the highly volatile nature of cryptocurrency, you’ll need to agree that PayPal isn’t responsible for any losses on the market.
Another point you’re agreeing to here is about payments. While you can’t use Bitcoin to pay for goods and services directly, you can instantly exchange your cryptocurrency for USD in your PayPal balance to do so.
Let’s say you wanted to buy a portable speaker online for $75. PayPal could give you the USD exchange rate for your cryptocurrency to pay if you chose. Due to high volatility, however, we don’t recommend using this option.
PayPal won’t charge you any fees for holding cryptocurrency, but they will charge transaction and conversion fees. Since your PayPal account will likely be connected to your bank, they might also charge different fees if you use your debit card or bank to buy Bitcoin and crypto.
|Purchase or sale||PayPal Fee|
|$1 – $24.99||.50|
|$25 – $100||2.3%|
|$100.01 – $200||2%|
|$200.01 – $1,000||1.8%|
5. Congratulations! You’ve bought cryptocurrency
You may have to pass a few more security checks and identity verifications. But once you do, if you look at your crypto account, you’ll see how much the Bitcoin or alternative cryptocurrency is worth. Don’t be surprised if it fluctuates from day to day.
Now all you’ve got to do is decide if you want to buy more, sell for some profit, or just hold on and see what happens.
Investing in Bitcoin with PayPal: Pros and Cons
Now that you know you can buy Bitcoin with PayPal, let’s think about if you should. Before you start buying up crypto, you need to see if the PayPal route meets your needs as an investor.
Investors and traders are looking for different things in the crypto world. Some are interested in profit-taking or swing trading, other holders want to make anonymous online Bitcoin purchases or transfer crypto to other accounts. Many just want to hold on, expecting Bitcoin to launch to the moon. It’s definitely not the best way to buy Bitcoin, but it’s probably quite convenient for regular PayPal users.
But when you buy Bitcoin with PayPal, there are some limits to consider.
Limits to buying Bitcoin with a PayPal account
When you’re using PayPal to purchase Bitcoin, we’d say that you don’t technically own it. You’ve instead entered into an agreement with PayPal buying Bitcoin and holding crypto on your behalf. The platform lets you hold, buy or sell cryptocurrencies and take profits or losses on price swings.
But you won’t be able to send actual Bitcoins to other accounts or users (not even other PayPal accounts) or move them out of your PayPal digital wallet.
Simply put, you’re limited to trading short-term, or holding long-term. Here are things you can and can’t do when you buy Bitcoin with PayPal, vs. other crypto exchanges and digital wallets like Coinbase, Etoro, or Binance.
|Buy, sell and hold Bitcoin and other crypto||✔||✔||✔||✔|
|Protection against fraud and scams||✔||✖||✖||✖|
|Public address to receive Bitcoin transfers||✖||✔||✔||✔|
|Private key to move or send Bitcoin transfers||✖||✔||✔||✔|
|Hundreds of alternative coins to Bitcoin to invest in||✖||✔||✔||✔|
|Transfer cryptocurrency to other users and accounts||✖||✔||✔||✔|
|Make online purchases with Bitcoin (goods and services)||✖||✔||✔||✔|
|Make anonymous payments with Bitcoin||✖||✖||✖||✖|
Users who want to make anonymous payments with Bitcoin will need to get a third-party wallet that lets them do so. For more information on buying and selling Bitcoin safely, check out this article to get step-by-step instructions.
Private keys and public addresses
If you want to own a digital currency (in every sense of the word) you’ll need two things that PayPal doesn’t give you.
- A private key: This is a key generated for you, be it on a crypto exchange account, hot digital wallet, or cold hardware wallet. If you lose this key, there are some backup security measures that can help you recover it. That includes a 12-word passcode that you must write down by hand and store somewhere. If you can’t generate this backup security measure, your private key, and digital currency that it opens the door to, would be lost forever.
- A public address to accept transactions: This allows you to accept Bitcoin as a form of payment, for any reason.
Some investors and crypto holders prefer to have these private keys and public addresses. But we understand that many beginners or those looking to simply hold long-term might prefer to have PayPal deal with this and give them peace of mind.
Should I Use PayPal to Buy Bitcoin?
Now that we’ve reached the end of the road, the answer is: It’s up to you. While you can cash it out quickly to make online payments, that’s about the extent of what you can do with it.
If you have no desire to send Bitcoin to and receive crypto from other parties or invest in lesser-known coins, PayPal could be your platform. PayPal allows you to safely buy, sell and make a profit on the value of the cryptocurrency, rather than expose yourself to fraud, scams, and shady dealings.
So while PayPal doesn’t give users the freedom that some crypto investors desire, they do offer a sense of security. Since they hold private keys, your crypto is in safe hands if you trust the digital finance app. When you own the private keys and get scammed or someone steals your crypto, it’s essentially impossible to get it back.
Use a VPN When Accessing Financial Information
There are also additional security measures you should take when using your PayPal, doing online banking, or accessing other sensitive financial accounts. The first step toward protecting your sensitive information is to get a VPN and always use it when performing financial activity online.
The best VPN providers use 256-bit military-grade encryption. This means your activity and data – like logins, passwords credit card numbers, bank account numbers, cryptocurrency account details — is encoded and can’t be decrypted by hackers or other third-party snoops.
If you want to learn more about VPNs and their advantages in protecting your privacy and personal information, take a deep dive with our article here.
What Exchanges Accept PayPal to Buy Bitcoin?
While you can buy Bitcoin through the app, you can also use the app to buy Bitcoin through a third-party exchange. Though there haven’t been many options available to users up until recent memory, there are a number of exchanges that accept it as a form of payment now.
Here are the main services that let you buy Bitcoin using your PayPal account:
- Binance P2P
More Reading on PayPal and Crypto
Interested in some more articles about cryptocurrency and PayPal? Take a look at some of our other pieces on the subjects.
Got questions on buying Bitcoin and cryptocurrency with PayPal? Check out frequently asked questions below.
PayPal has made it quite simple for users to buy Bitcoin and other cryptocurrencies through its app. You can start with as little as $1 and invest in Bitcoin, Ethereum, Bitcoin Cash, or Litecoin. You’ll just need to have a bank account and debit card linked to your PayPal account. Read our article for a quick how-to guide on buying Bitcoin with PayPal.
If you buy Bitcoin through PayPal, you won’t be able to transfer it anywhere. That means you can’t send it to other exchanges, accounts, or wallets outside of PayPal, or even to other accounts within PayPal. You’re limited to buying, selling, and holding Bitcoin within PayPal’s digital wallet.
The most popular ways of buying Bitcoin are through cryptocurrency exchanges like Coinbase, eToro, or Binance. PayPal also has an option for users to buy, sell, or hold cryptocurrency within their app.