This comprehensive guide provides step-by-step instructions detailing how to purchase bitcoins with PayPal. We’ll guide you through the process, revealing valuable tips and insider secrets that will make your experience efficient and hassle-free.
We also explore the essential aspects of PayPal and discuss its potential weaknesses. Additionally, we’ll explore the most suitable platforms that complement PayPal’s strengths and address its limitations.
Things You Need to Know Before Buying Bitcoin with PayPal
PayPal is a well-established financial giant with millions of active users and over 26 million merchants. Unsurprisingly, crypto traders were excited when the payment services provider announced support for crypto transactions for US-based accounts in August 2021.
Note that PayPal supports a limited selection of cryptocurrencies: Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. If you wish to trade other currencies, you’ll need to use another payment method.
PayPal’s cryptocurrency service functions as a custodial wallet, meaning a third party holds your private key and safeguards your funds. This may provide a sense of security to traders using PayPal. However, recovering funds can be challenging if the wallet is compromised, as the private key is not in the user’s possession.
Despite PayPal’s reputation for being more secure than most e-wallets, it’s essential to understand how custodial methods work. Some members of the crypto community have expressed concerns about the centralization and lack of flexibility of PayPal’s custodial feature. However, others trust PayPal’s security and prefer their keys to be protected by the company.
PayPal’s crypto trading options are relatively limited. This service is ideal for those looking to buy, hold, and sell cryptocurrencies as prices rise. For more active trading, PayPal surely may not be the best option to choose.
How to Buy Bitcoin Directly with PayPal
If you live in the United States, you can use PayPal to buy cryptos directly with PayPal. Follow these steps:
1. Login to your PayPal account.
Ensure you have funds available. You may need to link your credit or debit cards or your bank account.
2. Complete the KYC process.
Due to strict regulations regarding cryptography, PayPal requires users to undergo Know Your Customer (KYC) verification. This process involves submitting identification documents such as a driver’s license, proof of address, and a W-9 tax form.
The requirements for buying cryptocurrencies via PayPal are straightforward. However, note that exchanges also require users to undergo similar procedures, such as providing a driver’s license for identity verification, to adhere to KYC and Anti-Money Laundering (AML) measures.
Compliance with these requirements may grant additional benefits, such as increasing the maximum daily withdrawal limit.
3. Choose the crypto you want and complete the transaction.
PayPal users should research and compare exchange requirements with those of PayPal before investing.
Before proceeding with buying crypto via PayPal, consider the pros and cons of purchasing digital currencies on the platform.
Although the process is quite straightforward and only takes a few steps, cryptocurrency fees, the inability to transfer assets, and the limited selection of cryptocurrencies are significant drawbacks to buying directly from the payments conglomerate.
Top 3 Cryptocurrency Platforms Where You Can Buy BTC with PayPal
The number of cryptocurrency exchanges and platforms offering the ability to pay with PayPal has increased over the years. Buying crypto on a dedicated trading platform offers investors much better options than purchasing directly from PayPal.
Here are some of the top platforms that allow users to buy cryptocurrencies with PayPal.
1. eToro
eToro offers a multitude of trading options, including stocks and forex, and the ability to join over 20 million traders using the CopyTrader feature for portfolio and trading decisions.
The main advantage of buying bitcoins with PayPal on eToro lies in the low fees. The platform does not charge transaction fees for opening a trade. Instead, eToro has a spread-based structure.
Note that even though there are no fees when trading crypto on eToro, the spread is paid for both sides of the transaction, which is around 0.75% for BTC trading.
Register on eToro
2. AvaTrade
AvaTrade is a globally trusted brand offering a diverse range of assets to crypto, forex, and CFD traders.
Regulated by nine financial authorities, the platform excels in copy trading and offers user-friendly trading platforms, automated trading software, and comprehensive financial instruments.
With a monthly trading volume of over $70 billion, AvaTrade is an ideal choice for traders across all financial markets.
Register on Avatrade
3. Coinbase US
Coinbase stands out as an excellent choice for buying cryptocurrencies due to its user-friendly interface, robust security measures, and wide range of supported cryptocurrencies.
As one of the largest and most reputable exchanges, it offers transparent transactions and reliable customer support.
Additionally, Coinbase provides educational resources and tools to help users make informed decisions, making it suitable for both novice and experienced cryptocurrency traders.
Register on Coinbase
Conclusion
In conclusion, buying Bitcoin with PayPal offers convenience and accessibility, especially for users in the United States. While PayPal’s entry into the cryptocurrency space has expanded opportunities for investors, it’s crucial to understand the platform’s limitations and fees.
Utilizing dedicated cryptocurrency platforms like eToro, AvaTrade, and Coinbase US can provide more options and potentially lower costs for those seeking to purchase Bitcoin with PayPal.