This comprehensive guide provides step-by-step instructions detailing how to buy bitcoin with PayPal. We walk you through the seamless process, revealing valuable tips and insider secrets that will make your experience efficient and hassle-free.
We also delve into the essential aspects of PayPal and discuss its potential weak points. Moreover, we will explore the most suitable platforms that complement PayPal’s strengths and address its limitations.
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What to know before buying bitcoin with PayPal
PayPal is an established financial giant, boasting millions of active users and over 26 million merchants. Unsurprisingly, crypto traders were excited when the giant payment service provider announced that it would support crypto transactions for U.S.-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 a different payment method.
PayPal’s cryptocurrency service operates as a custodial wallet, meaning a third party holds your private key and safeguards your funds. This may provide a sense of security for traders using PayPal. However, recovering funds can be challenging if the wallet is compromised since 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 in the crypto community have expressed concern about the centralization and inflexibility of PayPal’s custodial feature. However, others trust PayPal’s security and prefer their keys to be safeguarded by the company.
PayPal’s crypto trading options are relatively limited. This service is ideal for those looking to buy, store, and sell crypto when the price increases. For more active trading, PayPal may not be the best option.
How to buy bitcoin with PayPal directly
If you live in the U.S., you can use PayPal to purchase crypto directly with PayPal. Follow these steps:
- Log in to your PayPal account. Make sure you have funds available. You may need to link your credit or debit cards or bank account.
- Perform the KYC process. In compliance with strict regulations surrounding crypto, PayPal necessitates that users 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 crypto through PayPal are straightforward. However, note that exchanges also require users to complete similar procedures, such as providing a driver’s license for identity verification, to adhere to KYC and Anti-Money Laundering (AML) measures. Complying with these requirements may grant additional benefits, like raising the maximum daily withdrawal limit.
- Choose the crypto you want and complete the transaction.
PayPal users should research and compare exchange requirements with PayPal’s before investing. Before proceeding with purchasing crypto via PayPal, consider the advantages and drawbacks of buying digital currencies on the platform.
While the process is fairly simple and it only takes a few steps, the crypto fees, the inability to transfer the assets, and the limited crypto selection are huge drawbacks to buying directly with the payments conglomerate.
Top 3 crypto platforms where you can buy BTC with PayPal
The number of crypto exchanges and platforms offering an option to pay with PayPal has increased over the years. Buying crypto on a dedicated trading platform offers far better options for investors when compared with buying directly from PayPal. So here are some of the top platforms which allow users to buy crypto with PayPal.
eToro
eToro offers a plethora of trading options, including stocks and forex, and the opportunity to join over 20 million traders utilizing the CopyTrader feature for portfolio and trading decisions.
The main benefit of buying bitcoin with PayPal on eToro is the low fees. The platform doesn’t charge a transaction fee for opening a trade. Instead, eToro has a spread-based structure.
Note that while there isn’t a fee when trading crypto on eToro, the spread is paid for either side of the trade, which sits at around 0.75% for BTC trading.
Disclaimer
Cryptocurrency is offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. BeInNews Academy is not an affiliate and may be compensated if you access certain products or services offered by the MSB.
AvaTrade
AvaTrade is a trusted global brand that offers a diverse range of assets for crypto, forex, and CFD traders. Regulated by nine financial authorities, the platform excels in copy trading and features 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 in all financial markets.
Coinbase US
Coinbase stands out as an excellent choice for buying crypto due to its user-friendly interface, robust security measures, and a wide range of supported cryptocurrencies. As one of the largest and most reputable exchanges, it offers seamless transactions and reliable customer support. Furthermore, Coinbase provides educational resources and tools to help users make informed decisions, making it suitable for both beginners and experienced traders in the cryptocurrency market.
How to buy bitcoin with PayPal on eToro
You may have different crypto platforms offering PayPal deposits, depending on your location. In this example, we will use the eToro platform to buy Bitcoin with PayPal.
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Step 1: Create an eToro account
*Cryptocurrency is offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. BeInNews Academy is not an affiliate and may be compensated if you access certain products or services offered by the MSB.
You can create a new account in only a few minutes. You will need first to verify your email address before proceeding with the account.
Step 2: Verify your identity
As with all trading platforms, you have to verify your identity before making your first deposit.
In the case of eToro, depending on your nationality, it might let you deposit funds. Still, if you fail to verify your identity in a certain period of time, the platform will automatically close all your open positions and send the funds back to your bank account used for the deposit.
Identity verification is a simple process. You only need the following things:
- Photo of your national ID or passport
- Proof of home address. This can be a bank statement, utility bill, or any official document that has your name and address on it
Verification can take up to a few days, but it’s usually faster than that. You will receive an email once that verification process is complete.
Step 3: Make a deposit using PayPal as the payment method
Click on the deposit button, and a new window will pop up. Here, you can set the desired amount to deposit (EUR, USD, GBP, or AUD). Note that you will need a minimum of $10 to open a trade on eToro. This value may differ across different platforms.
Then you can choose a payment method. By default, the platform will ask for your bank card details. However, you can buy crypto with PayPal on eToro, when you select PayPal from the dropdown menu.
Then it will ask for your PayPal email. Click “Continue,” then log into your PayPal account and complete the transaction.
After logging in to your PayPal account, confirm the source and click the “Agree & Pay Now” button.
It should only take a few moments to complete the deposit when paying with PayPal.
Step 4: Buy crypto
After you deposit funds on the platform from your PayPal account, you can now use it to buy any crypto asset available on the platform. Of course, you can buy bitcoin with your PayPal funds.
To buy bitcoin, or any other asset, type in the name of the asset in the top search bar. In this example, we want to buy bitcoin (BTC). You can see that the first result is the asset we are looking for.
On eToro you can click on the name of the asset, which will bring you to the page of the asset if you want to learn more about it. The search also has an option for trading the asset. Click on “Trade” if you want to open the trading window directly.
In the trading window, you can choose between “Trade” and “Order.” The “Trade” option means you want to buy the asset at the current price, while “Order” means you want to place a buying order at your chosen price.
You can also choose to buy a specific amount. This is a fraction of the asset, which is equivalent to your funds in USD. Or you can specify the number of units you want to buy.
After setting all your trading details, click “Open Trade.”
Note that eToro is a multi-asset trading platform, not a crypto exchange. While eToro allows you to buy bitcoin with PayPal, it doesn’t allow you to transfer your crypto to other wallets. This means you can only trade it on the platform, but if you want to move your funds from eToro, you must close your trades.
After opening your trade, the platform will give you a notification.
You can see all your open trades in your portfolio.
You can choose to close your trade at any given time. For instance, you can even seat a “Stop Loss” or a “Take Profit” value for your trade, which is advisable in the volatile crypto market.
Ready to buy bitcoin with PayPal?
In this guide, we’ve shown you how to buy bitcoin with PayPal, covering all the essential information and steps you need to take. As you now know, multiple platforms facilitate smooth PayPal deposits, but this option may differ from country to country.
If you’re eager to buy bitcoin using PayPal, we suggest opening an account with eToro. The broker can connect directly to your PayPal account, allowing free deposits with a minimum of just $10. Additionally, eToro doesn’t impose substantial trading fees and provides a complimentary crypto wallet app for secure storage after your purchase.
Frequently asked questions
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