PayPal users who want to invest in cryptocurrencies are often wondering whether the two are compatible.
The answer is both YES and NO.
To put it simply, you can’t buy Bitcoin with PayPal. However, there are various indirect methods of gaining bitcoins with your PayPal funds. This option isn’t supported by PayPal itself though, which is why it’s not an easy task.
Good news – we can run you through some alternatives. These methods require services of additional sites or software but they’re proven methods. Thousands are using them to buy Bitcoin with PayPal every day.
No Direct Buying with PayPal
PayPal executives have had different opinions on the cryptocurrency. Some have been in favour of it and even considered allowing direct BTC transactions. Others, however, have expressed the opposite views.
Long story short, bitcoins are still not supported by this payment platform. In fact, it couldn’t be directly supported even if everyone was on board.
That's because these two systems work in a fundamentally different way:
“PayPal transactions can be reversed, while Bitcoin transactions are irreversible.”
Hence, they can’t be directly linked to one another in their current state at least. Maybe the policies will change in the future and buying BTC with PayPal will be easier. Today, however, there’s no way it could be done.
Buying Bitcoin with PayPal Indirectly
So, the only alternative is to buy it indirectly. Why all this fuss, you may ask? Wouldn’t it be simpler to just use another method for acquiring virtual currencies like that?
Oh, it would be simpler alright.
However, some people want to spend their PayPal balance instead of any other funds for bitcoins. Luckily, we have found some methods that actually work pretty well.
So, if you can’t use another payments platform for this (which we recommend you to do), you can use:
- LocalBitcoins marketplace
- eToro platform
Selecting one of these or a similar intermediary is necessary for purchasing BTC through PayPal. It’s not a direct route but, as we mentioned, the direct route is impossible at the moment. Hence, it’s the best option you’ve got.
Below, we will walk you through the process of using your PayPal funds for bitcoins in two different ways.
LocalBitcoins is a site where people meet to buy or sell BTC in many different ways. One of these ways is – you guessed it – PayPal.
This online marketplace is one of the most popular Bitcoin exchange sites and is valued for many reasons.
To start buying on LocalBitcoins via PayPal you’ll need:
- A PayPal account with funds in it
- A LocalBitcoins account
- A Bitcoin wallet to deposit your purchased coins to (recommended)
The process is fairly simple. You sign up at the site, find a seller and purchase BTC in whatever currency you have on PayPal.
|✓ Seller reputation system||✗ Possible scammers|
|✓ Many sellers worldwide||✗ High transaction fees|
|✓ Easy to use|
Step-by-Step LocalBitcoins Guide
Here’s what you need to do:
- Create a LocalBitcoins account
- Find a BTC seller
- Complete the transaction
First things first, you’ll need an account to be able to use the marketplace. Trust is very important on this site, so most trustworthy sellers want reliable buyers with accounts.
Luckily, the registration is very easy. You’ll just have to enter your basic info and contact details.
Finding a seller
The most important and time-consuming step is finding a seller to buy bitcoins from. There’s a search bar at the top where you can enter your details. These should include:
- Amount of bitcoins you want to buy
- Seller’s country
- Payment method (i.e. PayPal)
From the list below, you will find a number of people willing to trade with you based on your query. You can click on any one of them to check their data.
We recommend you check the seller’s info every time as it’ll help you avoid scam. Pay attention to details like ‘Feedback Score’, ‘Number of Confirmed Trades’, ‘Trust’, ‘Blocks’ and whether their details are verified. An account that’s been active for longer is also more trustworthy.
We suggest you use this method with care because there’s no middle-man on this site. In other words, the communication and transactions happen directly, so nobody else will take your responsibility.
Making a Transaction
Once you find a seller that you like, you can make a trade request. They will review your account just like you did theirs. If both parties agree, you can proceed to make the transaction via secure escrow service.
Thus, you’ll be able to pay from your PayPal wallet and receive bitcoins. Just keep in mind that you won’t be able to withdraw them back to your PayPal account. Instead, a virtual BTC wallet is necessary for maximum safety.
eToro is a perfect site for making cryptocurrency investments. It has a neat layout, secure payments platform, millions of users and supports several virtual currencies too.
However, it’s dedicated precisely for making investments and speculations. If you want to buy bitcoins and actually use them, eToro won’t work for you.
The thing is, this platform doesn’t allow withdrawing in cryptocurrency. If you want to take out your funds, you’ll have to do that in a fiat currency.
If this isn’t a problem, eToro is one of the best options available to UK residents. It’s not available in the US, though.
To get started, you’ll need:
- A funded PayPal account
- An eToro account
|✓ Low transaction fees||✗ Can’t Withdraw in BTC|
|✓ No Bitcoin wallet needed|
|✓ Many useful features|
|✓ Completely secure|
Step-by-Step eToro Guide
To use eToro marketplace, you’ll have to follow similar steps we mentioned before. They are:
- Create an eToro account (and verify it later)
- Open a ‘Buy Trade’
- Withdraw your balance
Creating an Account
eToro account creation is very easy and quick. However, if you want to trade in real money, you’ll have to verify your account. Naturally, this takes more time but in return, you get a completely safe and secure environment with no risks involved.
What can I do without verification, you ask? You can do all kinds of things, the most exciting of which is practising the trade. eToro will give you $100,000 in fake money for that purpose.
You can use them to practice trade and learn the strategies as well as options available on the site. These extra features can help you learn more about investments and the markets available.
All you need to do to invest in Bitcoin on eToro is open a ‘Buy Trade’. If you’re already a verified member, you can add money to your account using PayPal.
Then, you’ll have to open a “Buy Trade” and invest the money in your eToro account. The platform is very simple to use and there are many options you can explore to decide when to sell it again.
Are you satisfied with the amount of money you made by price fluctuation and your trades? If so, you can withdraw your funds at any time. As we already mentioned, though, there’s no option to withdraw in bitcoin.
eToro makes withdrawing very simple and instant. Simply choose PayPal or any other service and take back the money you have deposited before – hopefully with interest. You can choose from many fiat currencies when withdrawing as well.
There are many more sites where you can indirectly pay for Bitcoin via PayPal. Here are some popular examples to check out:
Each of these has its own advantages and disadvantages. Though we would still suggest you try the two options we mentioned above. If none of these methods works for you, maybe PayPal isn’t the best choice in the first place?