How to Invest in Crypto with PayPal?

How to invest in crypto with PayPal? It was not so easy to buy cryptocurrencies as it is today because all you have to do now is take your smartphone and use a suitable app for it.

Amongst several other apps available for that matter, PayPal is one of the few popular apps that you can use to buy, sell, and hold cryptocurrencies apart from using it as a your favored online payments platform.

If you are surprised it means that you know little or nothing about the possibilities PayPal now offers to its users.

Well, do not fret because you are in the right place.

PayPal Holdings Inc is one of the most trusted and commonly used electronic money transfer platforms all over the world.

This platform offers financial services to merchants and consumers alike in more than 200 markets across the world.

It started offering its crypto services in 2020 but in March 2021 expanded it with its new feature called the ‘Checkout with Crypto’ service.

PayPal has long been the most favored app for people who want to make payments online.

There is very little doubt about its trustworthiness and security measures that it has in place.

Therefore, quite reasonably and naturally people were overwhelmed when it announced that it will support buying, selling, and holding crypto coins as well.

The best part of it is that you can do so by investing as little as $1 or as much as $100,000 a week.

However, there are a few limitations in it in comparison to traditional crypto exchange platforms that you ought to know.

This article will tell you everything about it if you wish to buy crypto on PayPal.

This will enable you to find out if at all using PayPal for buying crypto coins makes any sense for you.

How to Invest in Crypto with PayPal?

How to Invest in Crypto with PayPal

You can use PayPal to buy, sell, and hold crypto coins and checkout with Bitcoin or Ethereum on select purchases but all trades must be made in USD.

However, experts say that it is usually a bad idea to use any crypto coin as a form of payment.

Instead, they suggest buying and holding your crypto coins for a long term.

PayPal is now making crypto assets more accessible to its users and is one of the most favored apps for the beginners in the crypto space.

However, at this point you should also keep in mind that with an increased accessibility there is an increased risk as well.

Nevertheless, the platform is easy to use and if you are curious about cryptocurrencies and have this app and balance on your phone, you can log in to the app and click on the crypto tab for buying some coins.

Within a couple of seconds you can buy crypto coins worth a few hundred dollars. It is really that easy.

You can use PayPal to choose four different types of crypto coins namely:

  • Bitcoin
  • Ethereum
  • Litecoin and
  • Bitcoin Cash

You can view the prices of the crypto coins in real time by accessing your PayPal account via the mobile app or the website.

You will also get immense help from the educational content that is also accessible easily to get the answers to some commonly asked questions.

Apart from that, the app will also help you to learn more about crypto assets, its market, the opportunities offered along with the risks involved.

In short, with the inclusion of this service by PayPal, the users now have a new way to explore the exciting crypto world via a platform that they have immense trust on already.

All you have to do is log in to your PayPal account, click on the new crypto tab and you will get all that you want, well, almost.

You can choose to trade on any predetermined purchase amounts or your own amount before following the other instructions to buy the crypto coin of your choice.

You can use your bank account or your debit card to fund your PayPal account.

If you want to sell your crypto coins via PayPal, the funds are usually available promptly to spend in your PayPal account.

Ways to Follow

In order to buy crypto coins via PayPal, first you will need to create an account if you do not have one already.

From there on, there is very little to do, which is, however, very easy.

Before you know the steps to follow, here is an expert tip.

Though you can choose to trade with Bitcoin, Ethereum, Litecoin, and Bitcoin Cash via PayPal app, it is better to stick to Bitcoin and Ethereum, especially if you are new to this space.

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Also, make sure that you have the required funds in the bank account or the debit card that you have linked with your PayPal account in order to complete the purchase.

You will also need to fill out a W 9, confirm your identity, and agree to the terms and conditions of PayPal.

If all goes well and you follow the right process, the platform will also convert crypto into US dollars if you want to purchase it with crypto.

For this, the platform will not charge any additional cost.

Now for the steps to follow to buy crypto coins via PayPal app.

The process to follow is basically similar whether you use the PayPal website or the PayPal app.

Assuming that you have a PayPal account already and have also linked your debit card or bank account with it, here are the other steps that you should follow:

  • Select the type of crypto coin you wish to buy from the four given choices
  • Select the amount you wish to buy either from the preset values or buy tapping on the ‘Buy’ button to choose an amount of your own
  • Provide and confirm some information as prompted on the interface
  • Agree to the terms and conditions of PayPal’s Cryptocurrencies
  • Click on ‘Next’ to go to the next screen
  • Add other bank account or debit card if you do not want the ones that are shown here
  • Select ‘Next’ and review your purchase.

When the purchase is completed, the platform will update the account and the new crypto balance will be shown along with the prevailing market value.

You can now return to the home page of the app to see the crypto purchase under ‘Crypto’ along with the choice to buy and sell.

If you sell your crypto coins via PayPal app or website, the value will be converted into fiat automatically and will reflect in the Cash Account balance section of your account.

If you wish to buy Bitcoin on other sites and exchanges by using PayPal, a new opportunity offered by the platform since May 2021 in response to the Bitcoin supporters arguing that its crypto features were opposing the very ideals of the coin, you can use the third-party wallets that it supports.

However, this feature is yet to be implemented fully. You cannot transfer crypto coins outside the digital wallet of PayPal but for the time being you can make purchases.

Also, your options will be pretty much limited if you want to have complete ownership of Bitcoin you bought from other sites and exchanges.

There are only a few sites that support it as a mode of payment.

The main reason behind it is that, just like any other credit company, PayPal too allows the users to request a chargeback if there is any fraudulent transaction suspected.

This may allow a buyer to deliberately and fallaciously dispute a transaction to get their money back but still receive the Bitcoin they had bought in their account.

Since PayPal supports the buyer just like the other credit companies, there is actually no particular way in which it can be verified whether or not a transaction was fraudulent.

This is because Bitcoin itself is pseudonymous and any transaction made in the blockchain is literally irreversible.

This means that the seller will have to sacrifice the selling amount in the case of a fraudulent dispute but the buyer will have both the Bitcoin as well as the chargeback.

Account Considerations to Make

One of the most significant considerations that you should make if you want to buy crypto with PayPal is that the platform will not offer you the private keys of the crypto assets that you buy on it though it says that you own each of them.

This means that you will not have access to your assets and the safety and security of your crypto assets held are in the hands of the platform.

This is contradictory to the ‘ownership’ status that the platform claims to offer to its users.

This can be a serious concern for the users as well as a significant downside of the platform.

Those who want to have complete custody of the crypto coins that they buy, sell or hold via PayPal surely do not like it even though the platform claims to offer protection on crypto transactions to the buyers.

Investing Features and Fees

As said earlier, PayPal offers four types of crypto coins for its users to buy, sell, or hold through its mobile app or website.

The interface is very easy to use and most importantly the fees charged by PayPal are quite reasonable which typically ranges from 50 cents to 1.5% depending on the amount of purchases.

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The platform is quite transparent and includes the conversion spread and fee chart for its users.

This will help you to know the exact cost of your transaction along with the fees that you will need to pay for it.

If you want to hold your crypto coins in your PayPal account there are usually no fees charged for it.

However, for buying and selling crypto coins via PayPal you will have to pay transaction fees and currency conversion fees which will vary according to the amount you want to buy.

A complete breakup of the transaction fees charged by PayPal that varies according to the purchase amount is as follows:

  • For a purchase amount between $1 and $24.99, the fee is $0.50 USD
  • For a purchase amount between $25 and $100, the fee is 2.30%
  • For a purchase amount between $100.01 and $200, the fee is 2.00%
  • For a purchase amount between $200.01 and $1000.01, the fee is 1.80%
  • For a purchase amount between $1000.01 and above, the fee is 1.50%.

Therefore, as you can see that the rate of transaction fee gets reduced as the purchase amount increases which makes it quite reasonable.

However, apart from the transaction fees, there are some other fees involved as well.

There is a margin or spread fee associated with all crypto transactions made on the PayPal platform including the new Checkout with Crypto service.

This is the difference between the market price earned from the trading service provider and the exchange rate between the crypto assets and USD.

The spread and the exchange rate applicable are shown to every customer which is typically 0.50% for every transaction, according to their website.

Apart from that, there are some fees charged in making personal transactions or in those specific transfers in which currency conversions are required.

Remember, as of now, only the residents of the United States and the US territories barring Hawaii can use PayPal to buy, sell, or hold crypto coins.

Is it Right?

Whether it is a feasible option to buy crypto coins with PayPal will primarily depend on your preferences.

Using PayPal to buy crypto coins can be quite a good option for the regular users of this platform because you will be more comfortable using it while holding your crypto assets just like your cash in your PayPal account without having to pay any additional charges for it.

However, you should note that the new checkout feature of PayPal does not allow you to pay with crypto coins actually.

The new service simply converts the existing crypto coins into US dollars so that you can complete your purchases.

You should also keep another significant aspect in mind while using PayPal for buying crypto coins which is the small transaction fees and spread fees and exchange rates that you will need to pay while buying or selling your crypto coins.

Selection of crypto coins is also limited to four only which may be another point of concern for you, especially if you are looking for a much more varied and wider range of crypto coins.

However, there are a few specific benefits of using PayPal to buy crypto coins. These are:

It introduces a relatively low-risk approach to ownership of crypto coins.

This is because once people invest in crypto on the platform they will conduct further research online to know about their asset as well as cryptocurrencies in general.

Such hunger for knowledge will minimize the risks and allow them to understand what they actually own and result in a longing for direct ownership over the digital assets.

Those who are introduced to the exciting world of crypto coins and have a low risk tolerance will be benefited the most by this offering.

They will be dealing with a friendlier and a familiar platform since PayPal is one of the most recognizable and trusted brands in terms of making online payments.

This will certainly interpret their crypto adoption as a vote of confidence.

One of the most significant upsides of using PayPal to buy crypto coins is that the transfers of coins to the PayPal account is instantly made while through an actual blockchain network it may take anywhere from 7 to 10 minutes to transfer the Bitcoin to the actual wallet of the users.

Finally, the PayPal users are incentivized further since they help in forming a partnership with the interested stores.

In this process the users can now make qualified purchases of goods and services by using their crypto coin holdings.

Now, that is all about supporting buying crypto coins using PayPal.

There are some common arguments given by some hardcore crypto fans for not using PayPal to buy crypto coins.

They say that PayPal has surely made crypto purchasing a breeze but the users still have to go through the same arduous approval process that is followed by the traditional crypto exchanges.

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For example, it needs identity verification using documents issued by the government such as passports for the users to get the right to use the platform to buy crypto coins.

Therefore, they say that people will fare better if they choose a regular crypto exchange given the fact that they will have a much, much wider variety of crypto coins to choose from as opposed to the four coins only offered by PayPal.

Typically, the dedicated proponents think otherwise regardless of the benefits it provides.

They feel that it is more of a deception which tricks users in terms of direct ownership since the platform does not give the private key and does not even provide the users with a digital wallet or a wallet address.

They say that the fact that they do not own the private key supports the traditional crypto maxim – Not your keys, not your crypto.

On the PayPal platform, users have indirect ownership of their crypto coins.

This is because they simply hold the fiat equivalent and not cryptocurrencies.

This means that they cannot transfer the coins off the platform and technically cannot make any payments, swap currencies, or lend them as well from the app.

Therefore, there is no way a user can earn passive income from their crypto coins and maximize their returns when these are held on PayPal.

Ideally, these people say, that PayPal is gaining more exposure in the world of cryptocurrencies by using the funds of their users.

This way they are not only gaining publicity but are doing so by curtailing their own risks.

Platforms Supported

There are a few sites or platforms that support using PayPal as a mode of payment as of now, though the options are quite limited.

You can use eToro to buy Bitcoin using PayPal and transferring crypto coins to the eToro wallet.

The process is simple where you simply have to log into your account and click on ‘Deposit Funds.’

Then you will have to select ‘PayPal’ as the preferred payment option and choose an amount.

When you deposit the fund you can start buying Bitcoin.

You can also use the xCoins exchange site which also allows using PayPal.

This peer-to-peer lending platform connects Bitcoin borrowers and lenders and uses PayPal to let people exchange money for a Bitcoin based secured loan.

Any registered user can use this platform to lend or borrow Bitcoin and the platform will match the borrowing request with a lender.

When it is done, the borrower will have to pay the lender the amount plus interest by using PayPal.

When the transaction is confirmed, Bitcoin is transferred among the wallets of the borrower and the lender.

You can also use some P2P marketplaces such as Paxful and to buy Bitcoin with PayPal.

Here again, the buyers and sellers are matched directly.

The good thing about these marketplaces is that they allow the sellers to choose their payment methods as well as set exchange rates of their own.

However, every seller here may not accept PayPal as a payment method.

Still, you can search for those sellers who do by filtering payment methods and picking one.

As said earlier, there are only a few exchange platforms that support using PayPal for buying and investing in crypto.

Apart from the chargeback issue mentioned before, there are also a few other reasons for it.

One major reason is that the fees charged by PayPal may increase the cost of transaction considerably with several platforms already charging as high as 10% of the whole amount as a transaction fee.

Another significant reason is the conversion fees that may be applicable when a platform does not accept your local currency.

For example, for converting USD to Canadian dollars, PayPal typically charges a conversion fee of 3.5% in addition to the exchange rate.

As for other currencies the same fee can be as much as 4% above the exchange rate.


Cryptocurrencies are as they are very volatile assets to invest in and therefore you would surely not want to make things all the more complicated by investing in them with PayPal without knowing much about it. Thankfully, this article will help.