PayPal announced that they would open up the buying and selling for Bitcoin in the US using their platform, showing further institutional interest in the crypto world.
The announcement came following another wild year interesting year for BTC which has included an uptick of interest among institutional investors, sky high volume in futures markets, and many of brokers seeking out those who want to learn how to trade crypto.
PayPal’s move, provides users ease of use. Fool proofing beginners that struggle with exchanges, can’t figure out wallets, and bypassing know-your-customer (KYC) compliace. This opens the door for anybody with a PayPal account to buy Bitcoin.
PayPal’s vast network also gives way for users to actually spend their crypto, paving way for new use of cryptocurrencies.
How Can I Buy Bitcoin on PayPal?
PayPal has announced intentions on expanding this offering overseas as well, but for the time being it is only possible for US residents to buy and sell cryptocurrency through them. The rest of the world currently does not have access to PayPal’s Bitcoin function.
For those in the United States the the process is as straightforward as having a PayPal account. Use your PayPal account or go to their website and register a new one, fairly straight forward. Once logged in you go to the payments screen and select the “Buy Bitcoin and more” banner near the top of the page. Alternatively, you can also open the dropdown menu and select Buy Crypto on PayPal.
You’re then taken to a screen that shows the current purchase options, along with the current price movements for each cryptocurrency. For crypto beginners, they have provided basic information on how to buy and sell cryptocurrencies. As of now it’s possible to buy the following cryptocurrencies on PayPal:
- Bitcoin (BTC)
- Ethereum (ETH)
- Bitcoin Cash (BCH)
- Litecoin (LTC)
You’re able to select the currency you want to buy, enter an amount, and voila! You now have the purchased Bitcoin in your digital wallet.
It’s not possible for users to transfer cryptocurrency out of the PayPal digital wallet. You are able to sell it and convert it back into fiat currency by returning to your account’s crypto section. There is also a chart provided that helps users understand profit or loss.
PayPal at some point also plans to allow users to fund cryptocurrency purchases with merchants in the PayPal network. This brings the crypto movement closer to the point where it’s a viable payment method for day-to-day purchases.
All of this sounds well and good but also begs the question, just because you can buy crypto using PayPal, should you?
Is PayPal a Good Way to Buy Bitcoin?
PayPal is great for those new to cryptocurrency seeking exposure and looking to get into the arena. It also functions for those seeking to avoid currency exchange fees by using one currency. There are limitations however.
Those that should avoid PayPal’s incarnation of Bitcoin are seasoned cryptocurrency users including day-traders, speculators, and those already in the game. People interested in the privacy aspect of cryptocurrencies are best to avoid using PayPal for their cryptocurrency exposure.
There have been reports claiming that PayPal has closed accounts due to too much trading activity. This highlight the risks for those traders using the platform to avoid fees. Cryptocurrency exchanges are likely a better for frequent traders.
As of now PayPal’s incarnation of Crypto is not designed with veterans in mind and should only be used for those newer as a path into cryptocurrency. It’s worth reiterating that you cannot withdraw cryptocurrency from PayPal nor are you given access to the private key of your crypto wallet. As the popular saying in the crypto space like to say: “not your keys, not your coins.”
What Alternatives Are There to Buy Cryptocurrency?
PayPal is a new entrant in the crypto space. PayPal’s presence in the space demonstrates the continued interest and entrance of institutional players stepping in. There are however a multitude of established players in the crypto space that already facilitate the buying and selling for cryptocurrency.
The best approach is still using one of the many major cryptocurrency exchanges to purchase Bitcoin. Before going to the exchange you should set up a wallet. Once you setup a wallet and exchange, buy the crypto on the exchange, then transfer it to your wallet. There are a number of ways to do this but I recommend people use a physical hardware wallet. Now you’re a player in the space as well.