Bitcoin's increasing popularity in the last few years can be witnessed in the exponential price surges the cryptocurrency has seen. At one time, the price of Bitcoin even threatened the $20,000 ceiling before coming down to a more reasonable and stable $11,000 mark. This exceptional success of Bitcoin has made thousands of people interested in the digital asset as a short and long term investment driver.
When it comes to buying Bitcoin, many investors and traders wonder whether they can use PayPal to buy the currency on different crypto trading platforms. This is a question that we will try to answer in this article so you are not left with any confusions regarding purchasing Bitcoin with PayPal.
Our Quick Tutorial to Buy Bitcoin with PayPal
Step 1: Sign-Up
Step 2: Make your First Deposit
Once your account is set up, you can go to "Deposit" and follow the instructions to fund your account with PayPal . Enter the amount you want to deposit (beginners normally start with lower amounts), follow the steps and check your new account balance.
Step 3: Buy Bitcoin!
Other Methods of Buying Bitcoin with PayPal
The only other method apart from purchasing CFDs of Bitcoin through PayPal is to use a peer to peer marketplace. These are platforms that connect willing buyers and sellers of Bitcoin and other cryptocurrencies, and they can decide the terms and conditions of the sale themselves including the payment mode. So, if you want to pay with PayPal for your bitcoins, you can search for a P2P marketplace to invest in the cryptocurrency.
Advantages and Disadvantages of Buying Bitcoin with PayPal
Buying Bitcoin with PayPal Fees
If you are buying CFDs through an exchange, they will charge a standard commission which can be anywhere from 0.5% to 3% on the order value. Note that there might also be a deposit or withdrawal fee which varies from exchange to exchange.
On the other hand, if you are using a P2P marketplace to directly buy from a seller, it could be quite expensive to use PayPal since the marketplace charges its own commission on top of the standard PayPal fee. This means you can pay up to 4% to 10% of the order value in terms of charges.
Being one of the least popular methods to buy Bitcoin, PayPal can be quite expensive, especially if you are relying on peer to peer marketplaces that often have a complex fee and commission structure.
How to Buy Bitcoin with Paypal through CFD providers
Buying bitcoin through a CFD provider offers lots of advantages. Your money is considerably safer than if it were in an exchange, this is because they are regulated by governing bodies like the Financial Conduct Authority. Buying bitcoin as a CFD also allows you to scale in and out of a position with ease. This is because the market is more liquid and allows traders and investors to enter and exit a the price they want to get. Sometimes, with exchanges, you end up taking a worse price just to get into the market in the first place.
Another, but arguably the most important reason investors flock to CFD providers is because they do not have the limit exchanges do. If you were looking to invest a serious amount of cash into bitcoin via an exchange, you would be required to go through many checks before you can buy large amounts. by contrast, it is very quick and easy to deposit large sums into a brokerage and then immediately buy bitcoin.
How to Buy Bitcoin with PayPal through Coinbase Exchange
Paypal and Coinbase have had a rocky relationship. When cryptocurrencies first came about, Paypal was very much involved in the purchase of bitcoin and other cryptocurrencies. However as there was more controversy surrounding bitcoin, including its legality and its ability to hide criminal activity, Paypal took a step back. Currently, you can only buy bitcoin with PayPal instantly using Coinbase if you are a US citizen. It appears to be going well and Paypal plans to roll this out to other territories. If you are not a US citizen, although you can link your Paypal account to Coinbase, you cannot actually buy bitcoin with Paypal, or Litecoin or Ethereum for that matter. The only way you can use Paypal is to exchange your bitcoin for fiat currency and send it to your Paypal account. This procedure is fairly simple, but once you have it converted back into fiat currency, it is just as easy to transfer back to your bank account.
Buy Bitcoin with Paypal in the US
Bitcoin Paypal – US Exchanges
As highlighted earlier in this page, it is possible to buy bitcoins in the US via paypal on Coinbase, however, it is only available in the US. The plan is for Coinbase to role out this functionality across the world once they are happy with the pick up in the US. Meaning that in the US, you can buy bitcoins on quite a few exchanges with paypal. Coinbase as mentioned and also LocalBitcoins, which is an ever growing exchange that matches a buyer and seller to exchange bitcoin in whatever way they please. Paypal being a popular method in these exchanges. For more information on Local Bitcoins, see the guide below.
Bitcoin Paypal - US CFDs
CFDs in the US are completely banned. Therefore you cannot buy bitcoin with paypal as a CFD in the US, until they change their laws around this investment vehicle, those in the US who intend to buy bitcoin as a CFD must have a proof of address outside the US.
Proof of addresses include utility bills, tenancy agreements and bank statements. If you are fortunate enough to be a US resident and also have a home outside of the US then it is possible. For the majority of us who do not have that luxury, you must buy bitcoin with paypal through exchanges like Coinbase and Local Bitcoins.
U.S. Exchanges to Buy Bitcoin with Paypal
Before you begin, you must create a crypto wallet that will store your bitcoins once you have purchased them. You can do this by using the wallets the exchanges offer, or you can get specialized wallets that offer more features. There are many reliable companies offering e-wallets, you just need to do a bit of research to find the one matching your needs. Or check out our wallet page! We will now highlight a few exchanges that allow the purchase of bitcoin using paypal.
Buy Bitcoin with PayPal on LocalBitcoins Exchange
Sellers can charge a premium for using paypal because the chargeback issue lies with him. The good point is that bitcoins will be transferred to your account instantly.You can buy bitcoins from LocalBitcoins using your PayPal account. The company offers a platform to buyers and sellers to meet and trade. In order to buy bitcoins from LocalBitcoins platform, you need to locate a seller willing to sell you bitcoin by accepting payments from your PayPal account.
There is also a sense of community with localbitcoins. This is because you can go back to old sellers you have purchased bitcoin from in the past and buy from them again. This is where trust is gained and ultimately what the blockchain is all about – a decentralized network that is based on trust.
One of the perks of using a P2P service like LocalBitcoins is that it provides you with a variety of sellers from all around the world, so there are bigger chances to find someone who accepts your preferred payment method. However, fees tend to be much higher on P2P exchanges compared to some other brokers or exchanges and P2P services can't give any guarantees on the transaction.
Step-by-Step to Buying Bitcoin with Paypal through LocalBitcoins
Before you buy bitcoins through LocalBitcoins, you first must open a wallet. Once you have opened a wallet, you can then purchase bitcoins via Localbitcoins, you will then be required to send your wallet address to the seller, who can in turn send the bitcoins to your wallet.
- Sign up for free, by clicking the 'Sign Up Free' button in the top right corner. You will then find a 'Register New Account' page where you must fill in the fields with your details.
- Once you have created an account, you then must fill in the main fields on the home page. This includes how much you want to buy, what currency and via what payment method.
- LocalBitcoins will then match you with a seller or a choice of sellers.
- You then must choose who you want to purchase the bitcoins from. They may offer you different prices, and although we should recommend taking the lowest price, with market places like this, it is also advisable to go with sellers with the best reputations.
- Once you have decided who to buy from. Click buy and you will be taken to a confirmations page.
- Here you will be given instructions to buy bitcoin with paypal. As you can see in the example above, you must send the seller your Paypal email address, they will invoice you and you can pay the invoice via Paypal.
- Once payment is complete, you must give the seller your bitcoin wallet address. They will send the purchased bitcoin to your wallet.
Is Buying Bitcoin with PayPal the Best Method?
There is no single best method to buy Bitcoin, including PayPal. Although it has its challenges, so do other alternative payment modes. If you want the ease of use and security of PayPal, then you might overlook the limited options in terms of exchanges that are available to you.
However, if you are looking for alternatives, then you can also buy Bitcoin using your credit or debit card, bank transfer, Payoneer, and other similar e-payment methods. This provides you with the option to choose between multiple payment modes depending on a diverse range of factors including convenience, transaction charges, security, and reliability.
Tips to buy Bitcoin with PayPal
Acquiring Bitcoins using Paypal is very practical and a great solution for many users who only have that option. Of course, it isn't the cheapest alternative, but if you need to do it that way, I recommend following these tips:
- In addition to checking commission fees, also check the Bitcoins' purchase price.
- The platforms I suggest are safe, but it is advisable for you to change your deposit to Bitcoins and transfer them as soon as possible to your wallet. That way, only you will have control over your funds.
Is it safe to buy Bitcoins with PayPal?
When you buy Bitcoins with Paypal, you always have an advantage over the seller, and that's one of the reasons why Paypal doesn't want you to use their platform to do digital currency transactions. Imagine that you're buying your Bitcoins and decide to make a complaint stating that you never received them. If the seller didn't ask for enough proof for that transaction, it'll be much more difficult for them to prove that they did send them, and you could end up with the Bitcoins and the money you paid for them.
Frequently Asked Questions
It totally depends on what you value the most. If payment security, reliability, and convenience are of utmost importance to you, then PayPal might be the right option for you.
Due to some regulatory issues, PayPal is not made available by all the cryptocurrency exchanges to directly buy Bitcoin.
The two underlying reasons people want to use PayPal are its ease of use and quick processing.
The other payment options include debit or credit cards, bank transfers, other cryptocurrencies, and fiat currency.
We offer our users a complete list of brokerage websites and trading platforms that allow PayPal payments.
Not at all. It is a simple regulatory compliance issue which stops exchanges from offering PayPal as a payment mode. You can still use it to buy Bitcoin CFDs.
Yes! The ease of use, transaction fee, and security play a big role in terms of keeping your investment safe. Features that PayPal offers.
It depends on the peer to peer network and the seller. We usually advise to only use highly reputable P2P markets that discourage fraudulent behavior and block such sellers.
At the time of writing (October 2020), it is not possible to transfer BTC funds from a Bitcoin wallet to PayPal. However, PayPal seems to be excited to burst into the cryptocurrency markets and the company is said to be in talks with crypto firms to acquire them, which could lead to built-in wallets in the PayPal platform in a near future. According to the BBC, PayPal recently entered the crypto-sphere and "its customers will be able to buy and sell Bitcoin and other virtual currencies using their PayPal accounts" following the lead of other online payment platforms like Revolut or Square's Cash
You can consider buying Bitcoin using alternative payment modes including credit card, debit card, bank transfer, and other online payment methods.
If you believe that an exchange or marketplace has deducted more than they have promised, you can contact their customer support to resolve the issue. Although, this kind of occurrence is quite rare.