Overview
- PayPal users in the United States can buy Bitcoin directly through their site
- Step-by-Step guide how to buy Bitcoin from PayPal
- Bitcoin bought on PayPal cannot be transferred out of PayPal’s digital wallet
- Some cryptocurrency exchanges like eToro, Local bitcoins, Paxful etc. support buying Bitcoin using PayPal
PayPal announced in October 2020 that it starts offering buying and selling of cryptocurrencies. More specifically, Bitcoin, Ethreum, Litcoin and Bitcoin Cash. However, the service is available only for residents of the United States of America.
On October 2020, PayPal stated on their official site that they launch new service enabling users to buy, hold and sell cryptocurrency. This includes direct purchases of Bitcoin and other cryptocurrencies (Ethereum, Bitcoin Cash and Litecoin) within the PayPal digital wallet, through a partnership with Paxos crypto Broker.
How to buy Bitcoin with PayPal
We do not recommend buying Bitcoin through Paypal because you don’t actually own the Bitcoin. Currently, it is not possible to withdraw it to other Bitcoin wallets.
In this step-by step guide, you will learn how to Buy Bitcoin from PayPal, its advantages and disadvantages, and some alternative ways of buying Bitcoin with PayPal for those outside of US.
Step 1
Sign up or login
Sign up if you already don’t have an account with PayPal. Here are the required steps for signing up:
Select Personal account
Verify your mobile phone number
Enter your name, email and password, address and date of birth
Link your credit or debit card to PayPal
Step 2
Verify your identityBefore you can buy or sell cryptocurrencies in PayPal you have to verify your identity. US users need to provide only their social security number (SSN) and they might get verified. However, sometimes other documents, like ID, drivers licence and proof of address are required from them also.
Basically, you take a picture with your phone and upload them to the PayPal site.
Step 3
Buy BitcoinThe buy and sale of Bitcoin can be done through the PayPal Android or Apple applications or by accessing your account online after logging in.
From the homepage, click on the Buy Bitcoin & more image. Alternatively, you can visit http://paypal.com/myaccount/crypto/ to access the crypto page
Select the cryptocurrency you want to buy. Your options include Bitcoin, Ethereum, Bitcoin Cash, and Litecoin. In this guide we’ll buy Bitcoin
Click on the buy button. The minimum you can buy is $1
Enter the USD amount of Bitcoins you would like to purchase
Choose a payment method. Either your credit or debit card, or your bank account
Review your order details and click Buy Now to complete your purchase. You should see a green notification after your purchased have been confirmed
You’ve bought Bitcoin..sort of
After buying Bitcoin or other cryptocurrencies through PayPal, you will be able to see the total balance of your account. Unfortunately, you won’t be able to move this Bitcoin outside of PayPal. This means, you cannot transfer it to crypto exchanges, like Coinbase, or send it to friends and family. The problem is that if a legal or regulatory restrictions came up, PayPal can lock up your Bitcoins and you would not be able to use them.
To withdraw your Bitcoin you have to first convert it to USD or other currency and then send it to your bank account.
Advantages and Disadvantage to buying Bitcoin with PayPal
Advantages- Easy to use: Buy cryptocurrencies through the PayPal app or website with just a few clicks.
- Track your portfolio. Quickly see the value of your current crypto portfolio.
- Flexible payment options: Pay by debit card, from your bank account or using your existing PayPal account balance.
- Instant transactions: Buying and selling encryption through PayPal is instant.
- Can’t withdraw your Bitcoins: You won’t be able to move your Bitcoins safely on the bitcoin blockchain or on other crypto exchanges.
- High fee: A fee will be charged based on the total amount of your purchase.
- Limited options: Currently PayPal only supports Bitcoin, Ethereum, Bitcoin Cash, and Litecoin.
Other methods you can use to buy bitcoin with PayPal
LocalBitcoins: is a face-to-face network of buyers and sellers and it works to buy bitcoins with PayPal. The main problem is that there are very low limits, however, if you are willing to go through its new identity verification process (uploading pictures of ID documents). This will allow you to buy more Bitcoins, but it also removes many of the privacy protections that LocalBitcoins used to provide its users.
Buy from LocalBitcoins.com
With LocalBitcoins.com, you can trade face-to-face with local people with cash or other methods, such as PayPal. You can also find people who accept credit card payments to buy Bitcoin or other cryptocurrencies. Read the comprehensive LocalBitcoins review.- Available in almost every country
- Low fees, depending on seller
- All payment methods accepted, including PayPal
Buy from Paxful
Paxful is a peer-to-peer Bitcoin exchange which connects buyers and sellers to easily trade Bitcoins. The exchange is famous for providing the ability to buy Bitcoin using PayPal or gift cards (iTunes, Amazon).- 300+ payment methods accepted
- Easy to use
- Slightly higher fees than LocalBitcoins
Buy from eToro
eToro.com is a social trading platform and allows you to make deposits through PayPal. It allows you to copy the trading activity of experienced and successful traders (copy trading). Still, similarly to PayPal, you cannot withdraw the Bitcoin out of eToro. Only the USD equivalent. Therefore, you can use it only for trading Bitcoin.- Lots of payment methods supported
- Easy to use
- Cannot withdraw Bitcoins or other cryptocurrencies
Summary
Buying Bitcoin with PayPal is available only in the US. However, once you buy the Bitcoin you cannot move it out of PayPal. You won’t be able to store it securely on the Bitcoin blockchain. Also, there is a risk of legal and regulatory ban of Bitcoin.
For the rest of the countries, there are alternative ways, like LocalBitcoins.com and Paxful where you can find local sellers that accept PayPal.