How to Buy Bitcoin with Paypal
Bitcoin is everywhere - but how exactly can you buy bitcoin with Paypal? In this article, we will go over the steps you must take to buy bitcoin with PayPal as well as hidden fees and risks.
Coinbase is our recommended option for those who want to buy cryptocurrency in the United States. Coinbase has been around for several years and consistently ranks as one of the best and safest exchanges to buy Bitcoin.
Buying Bitcoin with PayPal
The process to buy bitcoin with PayPal is a relatively simple one. While you do have to go through some steps to get yourself set up, soon you will be able to buy cryptocurrency through PayPal!
PayPal offers the opportunity to buy four different types popular cryptocurrency, including Bitcoin, Bitcoin Cash, and others. Using the PayPal app, you will also be able to track trends and use Bitcoin to pay for purchases.
There are always some risks when purchasing cryptocurrency. This article breaks down how to get bitcoin and stay safe using it.
4 Steps for Buying Bitcoin with a Paypal
Setting up your PayPal to access bitcoin takes these four easy steps.
Step #1 - Sign-up/Login
You have to log in or sign up for Paypal. Having the account will allow you to buy and sell fees and goods and receive and send money. You will also be able to buy and sell bitcoin on the PayPal app.
Step #2 - Download App
Download the PayPal app with your smartphone. The app allows you to stay up-to-date on the offered cryptocurrencies and buy with the money in your PayPal balance or through your bank.
Step #3 - Navigate
Once you are on the dashboard or in the app, the third thing you must do is tap finances and see what cryptos are available and how much they cost.
You should be able to click each cryptocurrency to view a graph of their cost and their current market trends.
Step #4 - Buy Bitcoin
Select crypto from the dashboard. Tap buy, and you can then choose to buy $5, $50, $150, $200, or a custom amount worth of any available cryptocurrencies, including Bitcoin.
With PayPal, you can start as low as $1. Once you select the amount, PayPal will verify your identity. After following these steps, you will be able to finally buy, sell, and hold cryptocurrency with your Paypal account!
You will also be able to check out with crypto when you shop with Paypal.
Paypal Crypto Fees
When you buy and sell cryptocurrency with Bitcoin, there are transaction fees whether you buy or sell. A close review of these fees will sometimes determine if buying and selling cryptocurrency is right for you.
Once you are ready to buy or sell PayPal crypto, you will see a cryptocurrency conversion spread, which will show the exchange rate from Bitcoin to USD at that time.
The fees for purchasing or selling crypto are:
- 0.49 cents for buying or selling $1.00 - 4.99
- 0.99 cents for buying or selling $5 - $24.99
- $1.99 for buying or selling $25 - $74.99
- $2.49 for buying or selling $75 - $200
Once you spend or buy over $200, the fees change and are no longer a set amount of dollars. Instead, it changes to a certain percentage of the amount being sold or bought.
For any exchange between $200.01 to $1,000, there is a 1.80% fee. For those above $1,000, the fee is 1.50%.
Risks of Using a Paypal to Buy Crypto
There are two major risks when it comes to using Paypal to buy crypto:
- The market is not always stable
- PayPal is a centralized exchange
Cryptocurrency prices can be very volatile, so there is always a risk when it comes to buying or selling Bitcoin. The market can trend upwards very quickly and can drop just as fast.
This always makes buying cryptocurrencies inherently risky. PayPal is considered a centralized exchange, which poses a different risk. Centralized exchanges are when it is only one central authority managing the transactions.
Centralized exchanges are more vulnerable to data breaches than decentralized exchanges, making them riskier if you are worried about keeping your data secure.
Should You Use PayPal to Buy Bitcoin?
Using PayPal is unique in how they handle cryptocurrency compared to the average crypto market. Typically when you buy bitcoin, you get both a public and private key pair to make the ownership official.
The public key is your wallet address and the private key gives you control of that wallet. When you buy with a PayPal wallet, you only get the public address - the company keeps the private key.
Because of this, you are unable to move your Bitcoin or other cryptocurrency to cold storage or transfer tokens to a wallet outside of Paypal. While it may feel like a limitation to Bitcoin owners it also helps reduce the risks of buying Bitcoin, especially for those new to crypto.
If you lose that private key, you have to forfeit your cryptocurrency. It can sometimes be safer to give access to PayPal instead of dealing with it yourself, as long as you only plan on buying and holding your Bitcoin.
This way, there's no fear of losing your private key and therefore, your cryptocurrency. You’re also still able to use Bitcoin and other cryptocurrencies in your PayPal account to pay for items.
So if you are a cryptocurrency novice, a PayPal wallet is a great way to get started buying and selling Bitcoin. Get started with Paypal today with just one dollar!
Frequently Asked Questions
Still, have questions about buying bitcoin with PayPal? The most commonly asked questions were answered below, including using Coinbase, the cryptocurrencies available on PayPal, and more.
As of right now, you are unable to buy bitcoin with PayPal on Coinbase. This is because Coinbase doesn’t allow users to buy directly using their PayPal accounts.
Instead, you must use a debit card or bank account that is linked through your Paypal.
Paypal crypto currently offers four cryptocurrencies to buy and sell: Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. Bitcoin is the most popular currency for new and old investors.
This was the original cryptocurrency, and the first use of blockchain technology. Bitcoin was created to be a new kind of digital currency that could be sent from person A to person B without banks.
Ethereum is another favorite for those new to the market. Ethereum allowed the uses of blockchain to be expanded and made it possible to build applications on top of the blockchain.
Litecoin was designed to be a “light” version of Bitcoin. Litecoin can process more transactions while reducing fees associated with them, making it usable for everyday purchases.
Bitcoin Cash was also created as an alternative to Bitcoin, as an easier-to-use version of the popular cryptocurrency.
As of right now, you are unable to withdraw Bitcoin from your PayPal wallet and into a different, third-party wallet. However, PayPal’s head of cryptocurrency, Jose Fernandez da Ponte, revealed at the CoinDesk Consensus 2021 conference that this will be changing soon.
The new feature will also apply to Venmo, which PayPal Holdings also owns.
As we mentioned before, the Paypal wallet and cryptocurrencies hub is slightly different than other, decentralized exchanges. While you will have your wallet address, you will not have the private key that gives you access to the wallet.
Because of this, the PayPal Bitcoin wallet isn’t a true wallet in the way long-time investors are used to.
Coinbase is a secure online platform for buying, selling, transferring, and storing cryptocurrency.