Bitcoin stays in the headlines when prices continue to fall and rise weekly. It is not a risk-free investment. There is no assurance of a profit or even a return on investment. The Australian Securities and Investments Commission (ASIC) warns Australian investors to be cautious with cryptocurrencies and their unregulated nature. You need to know if you’re aware of the dangers and wish to invest using PayPal or another exchange that accepts PayPal as a payment option.
Buy Bitcoin directly with PayPal.
Via cooperation with Paxos, PayPal rolled out direct Bitcoin (and three other cryptocurrencies) purchases within the PayPal digital wallet in October 2020.
This enables users to retain and sell Bitcoins acquired via the service and pay PayPal-supported businesses using Bitcoin. As of June 2022, PayPal customers can withdraw their cryptocurrencies into third-party wallets for personal storage or more extensive ecosystem usage. However, this option is only accessible to customers in the United States. The weekly maximum is $10,000 with no yearly maximum, and the fee is from 1.5% to 2.3% based on the magnitude of the transaction.
If you want to purchase Bitcoin using PayPal, a PayPal account is required. It is simple to visit their website using your bank account, credit card, and email address. Once this is completed, you can purchase Bitcoin, Ethereum, Litecoin, and Bitcoin Cash via the Paypal website or mobile app.
- Log in to your PayPal account.
- Search for the “Buy Bitcoin and more” button on the Payments page. You will see the list of the available cryptocurrencies.
- Choose the desired coin from the list of available cryptocurrencies, then click “Buy.” This will lead you to the asset page, where you can learn more about the currency’s history and pricing.
- Choose a value from the available choices ($20, $50, $100, and $500) or enter a value of your own. It must be more than one dollar but less than one hundred thousand dollars weekly. PayPal will inform you that your purchase price includes a “spread.” This represents a variable fee due to the difference between the bid and ask price. It varies according to market circumstances.
- Once you’ve selected how much to purchase, you’ll be prompted to opt for a payment method, either one you’ve already linked or added at that time.
- You’ll be asked to evaluate your purchase to confirm that the amount you enter is correct, and you’ll be informed of any applicable fees.
- Click “Buy Now” to purchase the item.
On your home page, your balance will be changed to reflect your purchase, and you will now have the choice to buy and sell.
Buy Bitcoin indirectly with PayPal.
Buy Bitcoin indirectly with PayPal. Image: Paypal
In Australia, unlike the United States and the United Kingdom, you cannot purchase, hold, or trade Bitcoin directly using PayPal. This may change in the future, but for the time being, the only option to purchase BTC via PayPal is to use a specialised cryptocurrency exchange.
Some crypto exchanges enable you to put PayPal dollars into your account, which you may use to purchase Bitcoin. In Australia, for instance, eToro allows Australian users to make fee-free PayPal deposits.
Once you’ve selected a Bitcoin exchange that supports PayPal, verify if it offers a safe Bitcoin wallet. If it does, and you’d like to store your Bitcoin in a hot (online) or cold (offline) wallet outside of the exchange, check to see if it supports transfers and if there are any withdrawal fees.
Place an order
Once your PayPal funds have been placed into your exchange account, browse the Bitcoin page and enter the amount you want to invest. The sum cannot exceed the amount that has been deposited through PayPal.
Consider that, with the price of Bitcoin hovering above $US20,000, you will likely be purchasing a fraction of one Bitcoin. To illustrate, if Bitcoin was valued at $US30,000 at the time of exchange and you purchased $1,000 worth, you would own 3% of a Bitcoin.
Securely store Bitcoin
Bitcoin should be stored in a secure wallet, whether that wallet is provided by your exchange, a third-party service, or an offline storage drive you own.
Hot (online) wallets are less secure since they are hosted online and are susceptible to hacking, but you can retrieve your assets if you forget your passphrases.
Cold (offline) wallets are more secure than web-connected wallets since they are not linked to the internet. However, if you lost your access codes, nobody could assist you in retrieving them, meaning you would lose access to your Bitcoin.
Pros & Cons Of Buying Crypto With PayPal
Intuitive: PayPal allows you to buy cryptocurrencies through its app or through the website in as little as a few clicks.
Allows you to track your portfolio: PayPal also allows you to visualize your current crypto portfolio, as well as its total worth.
A wide array of payment options: You can buy crypto through PayPal by using your debit card, your bank account, or using your PayPal account balance.
Lightning-fast transactions: You can buy and sell crypto through PayPal instantaneously.
Higher fees: You’ll be charged a fee for each purchase you make, and these fees are frequently higher than those you would expect from a cryptocurrency exchange.
Not your keys, not your coins: PayPal does not provide access to your cryptocurrency keys, so you won’t be able to store your crypto tokens in an external wallet
Limited cryptocurrency support: To date, PayPal only supports four tokens, which are Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC).
Exchange markups: Conversion rates will apply to your purchase, so you’ll be buying and selling cryptocurrencies at a small price disadvantage.
Not available in Australia: Despite the fact that PayPal plans to expand this service outside of the US in the future, it’s not yet accessible for Canadian accounts as of this time.
Alternatives To Buying Crypto With PayPal
Buying Bitcoin using a credit card via a firm like Coinbase or Bitpanda is a popular solution. These services provide the same usability as PayPal without the same restrictions on supported payment methods, countries, or cryptocurrencies. However, they come with their own drawbacks, such as higher fees, longer wait periods for transactions to be completed, and the necessity to verify before purchasing cryptocurrency.
A second alternative is to use a cryptocurrency exchange with high-security features. These sites enable you to purchase and sell various cryptocurrencies at cheaper rates than PayPal. For instance, CoinSpot is largely considered Australia’s highest-rated cryptocurrency exchange. It has the highest security certifications in Australia and is Blockchain Australia-certified, offering innovative and multilayered support systems. CoinSpot provides a list of more than 350 cryptocurrencies, including Bitcoin, Ethereum, Cardano, Dogecoin, Solana, and Shiba Inu, as well as smaller-cap altcoins with the potential for more significant gains.
CoinSpot Watchlist. Image: CoinSpot
Should you purchase Bitcoin using PayPal?
Before using PayPal to purchase Bitcoin in Australia via an exchange, you should consider your motivations. PayPal is only one of the numerous methods to buy BitCoin on crypto exchanges. You should also consider a credit card, cryptocurrency, debit card, Osko, and PayID, which are prevalent on Australian exchanges.
Which Cryptocurrencies are supported by PayPal?
Currently, only Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC) are supported. This is relatively restricted compared to other exchanges and services that accept dozens or even hundreds of coins.
Which crypto platforms accept PayPal for Bitcoin purchases?
Here is a list of sites where PayPal is accepted as payment for other cryptocurrency services.
- Cryptocurrency Brokers: eToro, Plus500
- Cryptocurrency Exchanges: Coinbase
- Peer-to-peer (P2P) Marketplaces: LocalBitcoins
How quickly can Bitcoin be bought using Paypal?
PayPal is a speedy payment option; if your broker is quick, you’ll be able to purchase Bitcoin in a flash. Please note that Bitcoin transactions may sometimes take up to 30 minutes due to the network’s sluggishness (high traffic).
Can you buy BTC via PayPal anonymously?
No, you must do a comprehensive ID verification by providing all relevant documents. Additionally, you must connect your PayPal account to your bank account.
Can Ethereum be transferred to PayPal?
While it is not feasible to transfer Ethereum to PayPal directly, you can execute the transfer via Coinbase. If your Ethereum is not already on Coinbase, you must first send it to the exchange. Next, convert your Ethereum into your preferred fiat money. Finally, withdraw your fiat currency into your PayPal account.
PayPal is an excellent way to purchase Bitcoin if you want to ignore the technical aspects of dealing with cryptocurrencies, so long as the procedures are required to withdraw your BTC. However, keep in mind that profits are not guaranteed, and invest only with funds you can afford to lose.