How to Buy Bitcoin & Cryptocurrency with PayPal

While Bitcoin has made a lot of progress as a new form of electronic money, PayPal is still the standard when it comes to online money transfers. Due to PayPal’s popularity online, many people think it would be the perfect match for trading into the Bitcoin ecosystem; however, there are key differences between these two payment options that make them mostly incompatible.

The Benefits PRO's
  • PayPal is a user friendly option for most people to make online payments
  • PayPal is trusted as a secure platform for online payments
  • Many people already have a PayPal account
The Downside CON's
  • Buying cryptocurrency with PayPal has higher fees
  • There are strict limits on how much cryptocurrency users can buy via PayPal
  • Most exchanges don’t even offer PayPal as an option

History of PayPal and Cryptocurrency

PayPal was launched back in 1998, and its original goals were somewhat similar to Bitcoin’s. PayPal wanted to create a new form of internet money that would be frictionless and make sending payments as easy as sending an email.

However, due to the centralized nature of PayPal, the company was never able to be as innovative and boundary-pushing as they hoped. That said, PayPal eventually became the de facto standard for online payments.

However, PayPal hasn’t worked well with Bitcoin up to this point. This is because, unlike cryptocurrency payments, PayPal transactions are not finalized right after they are made. Due to this difference in how payments are processed on these separate platforms, they are mostly incompatible for trust-less trades between each other.

The same goes for using PayPal to buy popular alt-coins like Ethereum, Tether and Litecoin. PayPal and cryptocurrency exchanges simply don’t play nice together. You’ll likely have to find an intermediary to buy Bitcoin or any other cryptocurrency.

The Advantages of PayPal for Cryptocurrency

Despite the difficulties associated with purchasing cryptocurrency via PayPal, a large number of people still decide to take this route due to their level of comfort with the online payments platform. PayPal is a great option for anyone who needs some cryptocurrency in a hurry because payments can be made instantly. Despite the fees and low limits, there aren’t many other solid options to choose from when you need some Bitcoin fast.

The Disadvantages of PayPal for Cryptocurrency

There are a number of disadvantages to using PayPal to purchase cryptocurrency, and this option should probably be avoided if you are not in a rush. Buying Bitcoin and other cryptocurrencies with PayPal will come with higher fees than even using a credit card. Additionally, there are extremely low limits on the few platforms where PayPal is even accepted as a payment option.

Perhaps the biggest disadvantage of using PayPal for Cryptocurrency is that it’s simply very difficult to do. Most major cryptocurrency exchanges do not accept PayPal at this time.

PayPal Frequently Asked Questions

About the Author

Arthur Crowson

Arthur Crowson is an award-winning writer and editor who hails from the Pacific Northwest. His career began in traditional news media but he transitioned to the online arena in the mid-2000s and has written extensively about the online poker boom and the rise of cryptocurrency.