The PayPal Bitcoin (BTC) initiative has been strong over the past few months. Ever since the payments group announced it would allow anyone to buy and hold Bitcoin, Ethereum (ETH), and other assets in its wallets, the prices of such currencies have gone way up. If you’re one of those potential users who hasn’t invested and wants to learn how to buy bitcoin with PayPal, this guide has you covered.
Beforehand, potential investors new to the space would have had to sign up on an exchange, acquire a wallet, and figure out how all of that works. While it’s not the most difficult thing in the world to learn, it’s certainly not the easiest – especially for those who aren’t technologically minded.
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This increase in interest is due to the platform changing how easy it is to buy Bitcoin. We’re going to answer a few common questions surrounding the PayPal Bitcoin rush.
Can I Use PayPal to Buy Bitcoin?
Absolutely! In fact, it’s one of the easiest ways to do so – especially if you already have a PayPal account handy.
Can I Withdraw Bitcoin From PayPal?
You cannot withdraw Bitcoin from PayPal at this time, though it is possible to make purchases with your assets, which are instantly converted to fiat at checkout. To put it bluntly, if you’ve been wondering “Can I transfer PayPal Bitcoin to my wallet,” you can’t.
How Does Bitcoin on PayPal Work?
Now it’s time to answer the top question: how does Bitcoin on PayPal work? Let’s break it down.
1. Log In to (or Create) Your PayPal Account
This part’s easy, especially if you already have a PayPal account. Simply log in and head to the “Crypto” section of PayPal’s dashboard. Otherwise, create an account with a relevant email address and password and go from there.
2. Select Bitcoin
Once you click on the Crypto section of PayPal, there will be a list of cryptocurrencies to choose from. Since we’re examining Bitcoin today, select that asset.
3. Click Buy
Now that you’re viewing Bitcoin, take a look at its price chart. The page will show you a price history of 24 hours, 1 week, 1 month, and more ranging all the way to its entire past.
Click buy, and the page will provide you with default $20, $50, $100, or $500 worth of Bitcoin. Otherwise, you can enter a custom amount. From there, you’ll choose a payment method. This is where having an existing account comes in handy.
If you’ve already had your PayPal account, simply choose an existing payment method and click “next.” You can also add a payment method via this page. If you want to buy BTC with PayPal, you can only do so with a debit card or bank account. PayPal does not accept credit cards for cryptocurrency transactions.
When your payment method is selected, you’ll see a review page with the exchange rate, the total price of your purchase, transaction fees, and more. If you’re liking what you see, simply click “Buy Now” and you’ll be set!
Once again, note that any cryptoassets you purchase via this PayPal Bitcoin process are ones you must hold on the platform. Initially, PayPal did not allow you to withdraw assets to another cryptocurrency wallet. However, this policy has changed.
PayPal, as well as other apps such as Venmo and Robinhood, are making cryptocurrency more accessible, which is a huge attraction for many new investors. If you have a payments app on your phone and are interested in cryptocurrency, you can open PayPal, click crypto, and own a few hundred dollars worth of bitcoin in two seconds.
Traditionally, accessibility is the largest barrier to entry for cryptocurrency. Due to this fact, many question whether digital currencies have long-term staying power.
It was evident that cryptocurrencies were here to stay when PayPal made the decision to begin letting its users buy Bitcoin. Without a doubt, cryptocurrency is gaining traction in the financial world. However, check your anonymity at the door if you’re buying Bitcoin with PayPal. Not only do you give up money, but you also give up a large amount of personal data.
Furthermore, when you buy bitcoin, you are given two things to prove your ownership: a public and a private key pair. The public key represents your wallet address, and the private key grants you access to that wallet. With PayPal, until you take custody of your private keys, you do not “own” your bitcoin. Consider the custodial arrangement to be a type of IOU for your bitcoin.
Bitcoin was created to remove third-parties
Bitcoin and cryptocurrency removes third-parties and counter-party risks. If you buy bitcoin on Paypal, you introduce counter-party risk. Counterparty risk is a measure of the likelihood that one party to a contract will fail to fulfill their obligations. Financial transactions can involve a range of various counterparty risks.
When a customer deposits money at a bank, they assume counterparty risk, which means they could lose their money if the bank fails. This is also true for exchanges.
A true form of digital cash did not exist prior to Bitcoin. The only option was to store IOUs in exchange for dollars or other fiat currencies with a third-party financial institution. Third parties are a target for regulators all over the world, and money held by an individual or entity with these third parties could be seized or blocked from being sent for any reason.
To process electronic payments, Internet commerce has come to rely almost entirely on financial institutions acting as trusted third parties. While the system is adequate for most transactions, it suffers from the inherent flaws of the trust-based model. When you buy bitcoin on PayPal, you assume the risk of censorship.
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Frequently Asked Questions
What can you do with bitcoin on PayPal?
With PayPal, you can send and receive bitcoin, or sell your bitcoin to pay for purchases through your PayPal account.
What Cryptocurrencies does PayPal support?
Customers in the U.S. and U.S. Territories (excluding Hawaii) can transact with 4 different Cryptocurrencies on PayPal: Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.
Who can participate in cryptocurrencies on PayPal?
Customers with personal PayPal accounts in the U.S. and U.S. Territories (except Hawaii) can buy bitcoin and other cryptocurrencies on PayPal. However, this feature is not available for business accounts.
Are there any fees to buy Bitcoin on PayPal?
There are no fees for holding crypto in your account, but PayPal does charge a transaction fee when you buy or sell.
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