5 Best Ways to Buy Bitcoin With PayPal in 2024

Why Should I Buy Bitcoin With PayPal?

Speed

With PayPal, you can send money in a matter of seconds. There is no need to wait around for funds to clear, so you can get your Bitcoin pretty much immediately. Withdrawing funds after you sell your Bitcoin can also be much faster with PayPal than other payment methods. You can even activate One Touch if you want to stay logged in to your PayPal account to make transactions even faster.

Easy to use

PayPal is one of the simplest ways to pay. There is no need to enter card numbers or account information every time you make a Bitcoin purchase. If you already have a funding source linked to your PayPal account, all you need to do is enter your PayPal password to log into your PayPal account. After that, PayPal will complete the payment for you, and the funds will be transferred to your account immediately.

Convenience

You also avoid the hassle of currency conversion when you use PayPal, and it’s easy to set up recurring payments with PayPal, as well as one-time purchases. As well as crypto platforms, there are millions of other online stores that accept PayPal, so you can use PayPal for pretty much anything, without needing to switch between different payment methods.

Security

PayPal uses end-to-end encryption to secure your data. As PayPal processes the payment, your bank or card details are never shared with the exchange you use. You also have the option to set up a PayPal security key which means two-factor authentication is required every time you make a purchase.

Protection

PayPal constantly monitors your transactions to detect any suspicious activity and protect you from fraud. On top of protecting your account, PayPal provides Purchase Protection. If you are charged for a transaction you didn’t make, or you don’t get what you paid for, you can simply raise a claim online, and PayPal will give you a full refund if you are eligible.

Disadvantages of Buying Bitcoin With PayPal

Fees

The fees associated with using PayPal depend on the platform. Although you can make deposits for free on some platforms, you will find yourself facing higher fees on Coinbase when using PayPal than when using other methods. The fees for buying Bitcoin directly on the PayPal platform can also be significant, especially for smaller purchases.

Availability

Whether or not you can use PayPal to buy Bitcoin depends on your location. US customers have quite a few choices, including all the ones listed in this guide. However, UK users are unable to make PayPal deposits on eToro, and Coinbase only allows customers in the UK and Europe to use PayPal for cashing out. So far, PayPal has only rolled out its Cryptocurrency Hub services to the US and the UK.

Account freezes

Although PayPal’s security mechanisms can be good for protecting customers from fraud, they can also be an inconvenience if PayPal deems genuine transactions to be suspicious. PayPal has been known to withhold payments and freeze users’ accounts without warning, which can be disruptive.

Buying Bitcoin on PayPal vs Crypto Exchange vs P2P

The different types of platforms where you can buy Bitcoin with PayPal all offer quite different trading experiences. There are pros and cons to each method, and to help you decide which is right for you, we’ve discussed some important factors to consider below.

Fees

Buying through PayPal directly can involve significant fees. The exchange rate will include a spread, and you will also be charged a transaction fee of at least 1.5% on each purchase. Buying just £1 of BTC on PayPal, for example, incurs a fee of £0.50—which is a hefty 50%.

You can buy Bitcoin on Paxful or Binance P2P without paying any fees, but as the seller sets the price, you could find yourself paying a significant markup on the actual market price of BTC.

Some exchanges and crypto brokers charge low fees. Coinbase, for example, charges just 0.6% or less on top of spread when you buy Bitcoin. However, depositing to Coinbase via PayPal involves a 2.5% fee and using PayPal to pay for a purchase directly on Coinbase triggers a 3.99% fee.

Features and Tools

Although PayPal provides market information and educational content, it is somewhat lacking in crypto trading and investing features. There is no choice of order types and no tools for technical analysis.

Peer-to-peer platforms also tend to be lacking in order types and charting tools, although if you buy through Binance P2P, you can make use of the analysis tools on the spot trading charts and take advantage of features such as savings accounts once you’ve purchased Bitcoin.

Exchanges and brokers tend to be the most feature-rich types of platforms. Coinbase provides charts and tools for technical analysis. Coinbase also has a “recurring buys” feature.

User experience

This is a subjective factor that depends on what you want to get out of your Bitcoin buying experience. PayPal’s crypto features are very user-friendly and convenient if you want a fast way of making very simple Bitcoin transactions.

Most people find P2P platforms to be the least user-friendly as the process is less intuitive and requires some understanding of concepts such as escrow.

Security

Peer-to-peer trading can raise security concerns as it involves dealing directly with individuals, some of whom may attempt to perpetrate scams. The use of escrow and following the recommendations of the platform ought to keep you safe, but P2P users should always be cautious.

PayPal is good as a secure payment method as it doesn’t share your bank or card details with third parties. However, if you want to buy Bitcoin directly through PayPal, you should know that PayPal stores users’ crypto in omnibus accounts and there is no information about how these are secured.

Coinbase stores the majority of its crypto holdings in cold wallets, which are the most secure form of storage. Both platforms also use industry-leading security practices to protect accounts and have crypto insurance.

Buying Bitcoin Anonymously Using PayPal

As regulators and law enforcement agencies around the world wise up to Bitcoin and attempt to crack down on illicit crypto activities, it is becoming increasingly difficult to buy Bitcoin anonymously, with more and more platforms requiring identity verification as part of their Know Your Customer (KYC) process.

It is still possible to buy Bitcoin anonymously, however, through P2P platforms like Paxful. You need to complete identity verification to access all of Paxful’s features but you can purchase BTC from certain vendors with methods such as PayPal even without verifying your identity.

To ensure anonymity, you would need to create a new email address to use with Paxful. Although PayPal won’t share your details with Paxful, most PayPal users still go through identity verification on PayPal in order to connect a funding source.

The only way to avoid the need for a bank account or credit/debit card on PayPal is to pay using your PayPal balance. If you receive payments through PayPal, you can use these funds to pay for things such as Bitcoin purchases without going through PayPal’s identity verification.

Trading on unregulated P2P marketplaces can be risky, however. If you’re not doing anything illegal, then spending a few minutes verifying your identity on a regulated platform will provide a safer and easier way of buying crypto. What’s more, regulated platforms also tend to provide better features and customer service.

Global Regulations for Buying Bitcoin With PayPal

KYC or “Know Your Customer” is the identification process most exchanges and brokers deploy to verify a customer is who they say they are.

To satisfy these requirements, customers are typically required to provide a photographic ID like a passport or driver’s licence, and in some cases, they will need to prove their address with a utility bill or something similar.

As a global financial services provider, PayPal itself is bound to comply with all laws and regulations regarding Anti-Money Laundering (AML). Exchanges and brokers are also financial services providers and depending on their region, need to comply with the same laws.

When purchasing Bitcoin from a crypto exchange or broker, you will generally be subject to a verification procedure, regardless of the payment method.

United Kingdom

The Money Laundering Regulations 2017 is the law that determines KYC requirements in the UK. With oversight from the European Joint Money Laundering Steering Group, financial services providers in the UK are required by law to comply with standard KYC and AML regulations.

In the UK, Bitcoin can be purchased with PayPal at a reputable brokerage platform or OTC desk. PayPal is not available as a payment option for most cryptocurrency exchanges in the UK.

It is perfectly legal to buy Bitcoin in the UK, but all cryptocurrencies are unregulated in the UK, meaning investors won’t have access to the Financial Ombudsman Service or the Financial Services Compensation Scheme in the event that things go wrong. This is why it is important to use a regulated platform that employs strong security measures.

Retail investors are not allowed to trade Bitcoin derivatives in the UK.

USA

At the Federal level, Bitcoin is not considered a security by the SEC, meaning securities laws don’t apply, while FinCEN requires cryptocurrency platforms to register and abide by AML/CFT rules.

Laws affecting cryptocurrencies can also be passed at the state level. States such as Maryland and Hawaii have issued warnings about cryptocurrency investing, while other states like Wyoming and Colorado have passed favorable crypto regulations.

You can buy Bitcoin legally in the USA and PayPal is more widely accepted as a payment method on crypto exchanges in the USA.

Is Buying With PayPal Available in My Country?

PayPal is one of the most widely accepted and preferred payment methods in the world. However, some regions still do not accept PayPal as a payment system. This is particularly the case in some developing countries where fraud has been a major problem.

You can look for your country on a list of the countries that support PayPal.

What Limitations Exist for PayPal While Buying Bitcoin?

If you want to buy Bitcoin with PayPal, you may have a limited choice of platforms that you can use. The platforms listed on this page are the best and safest options. However, eToro and Coinbase don’t currently accept PayPal deposits from UK users.

With verified PayPal accounts you can send up to $60,000, though a single transaction may be limited to $10,000.

The minimum amount of Bitcoin you can buy is the lowest when buying directly on PayPal, at just $1. Coinbase also has a low minimum of $2.

On Coinbase, users can buy up to $25,000 worth of Bitcoin per day with PayPal, or make deposits to their Coinbase account through PayPal of up to $25,000 per day.

P2P marketplaces don’t tend to have minimum and maximum limits on purchases at a platform level. Instead, each individual seller will set upper and lower limits on the amount of Bitcoin they are willing to sell to you.

What Fees Are Associated With Paypal?

PayPal doesn’t charge you any fees when you use the service to pay for a purchase unless a currency conversion is required.

When buying cryptocurrency including Bitcoin directly on PayPal, the exchange rate quoted includes a spread, and there will be a transaction fee added to each purchase or sale. In the UK, these fees are as follows.

Crypto platforms may choose to charge a fee on deposits or purchases made via PayPal. These are summarised below.

It’s worth noting that Coinbase also charge trading fees when buying any crypto including Bitcoin, regardless of the deposit method used.

While Binance P2P and Paxful don’t charge buyers a fee, the seller sets the exchange rate, so purchasing Bitcoin this way could still work out more expensive than buying it on a platform that charges fees.

Why Is PayPal Getting Involved in Crypto?

PayPal has been around much longer than cryptocurrency, but it was well over a decade after Bitcoin’s inception that PayPal finally introduced crypto functionality. In fact, former PayPal CEO Bill Harris described Bitcoin as the “greatest scam in history” back in 2018—so what has changed since then?

PayPal has actually had a relationship with Coinbase since as early as 2016. Then in 2020, the payments giant created a Blockchain Research Group to explore how the technology could be useful to PayPal and its customers.

PayPal then announced the launch of its crypto services in late 2020, stating that the shift towards digital payments was accelerating, with PayPal CEO Dan Schulman saying that digital currencies have “clear advantages in terms of financial inclusion and access”.

The payment services provider partnered with Paxos Trust Company to roll out crypto features in the US, followed by expansion to the UK in 2021. It also received a conditional Bitlicense from the New York State Department of Financial Services (NYDFS).

PayPal’s stated aims include building understanding and adoption of cryptocurrency, increasing the utility of crypto in digital commerce, and exploring and investing in the next generation of financial services infrastructure.

Although PayPal’s crypto features are limited, they are very easy to use, and if these services are rolled out worldwide, PayPal could make crypto more accessible for its hundreds of millions of users.

How to Use Bitcoin to Make Purchases on PayPal

The PayPal platform allows you to use the Bitcoin in your account to make purchases with retail locations and online stores that accept Bitcoin as payment.

When you make a purchase, PayPal will sell your Bitcoin and convert it into the required Fiat currency, USD for example. You will then use that Fiat currency to pay at the online or retail store.

Technically you will never conduct a transaction with Bitcoin through PayPal, instead your Bitcoin will be exchanged for cash to facilitate your transactions within your PayPal wallet.

Is Buying Bitcoin With PayPal the Best Method?

The best method of buying any crypto including Bitcoin is subjective and will depend on your priorities. Credit cards are a useful way to buy Bitcoin if you want the freedom to pay later or in installments. Debit cards, meanwhile, provide a fast payment solution without the fees or interest charges of credit cards.

Bank transfers provide the cheapest deposit method on many platforms, but you will generally be told to allow up to three days for a bank transfer to be processed. More of the cheapest ways to buy Bitcoin can be found on the in-depth page

PayPal doesn’t charge you any fees for making payments, so if you can find a platform such as eToro that allows free deposits, PayPal can also be a cheap option. You may find PayPal the best way to buy Bitcoin if you want instantaneous speed, the convenience of only needing to enter a password, or anonymity when buying on a P2P marketplace.

Further Tips for Buying Bitcoin With PayPal

Stay secure

If you decide to buy Bitcoin with PayPal, you want to make sure you do so securely to avoid any risk of losing your funds. You should make sure that your PayPal account has a strong, unique password that you change from time to time.

You should always enable two-factor authentication if you have the option—you can do this on PayPal as well as most crypto exchanges and brokers. Finally, make sure to select a regulated and reputable platform that follows industry-best practices when it comes to security.

Find the best deal

It’s natural to want to go to as little expense as possible in the process of acquiring Bitcoin. There are a few things to consider in this respect. If you look at the price of Bitcoin on different platforms, you should be able to see which is offering the best exchange rate. This rate will include a mark-up in the case of P2P marketplaces and a spread in the case of some brokers and exchanges.

Before you can tell which option is the cheapest, however, you will need to take fees into account. Any deposit or transaction fees should be factored into the cost of acquiring Bitcoin, but you may also want to consider any other fees, such as withdrawal or inactivity fees. Once you have found the cheapest platform, you should decide whether it meets your other needs or whether it’s worth spending a little more on fees for a platform with better security and features.

Store your Bitcoin safely

Once you’ve bought some BTC, you’ll want to make sure you keep it somewhere secure, and there is a range of crypto wallets available to suit different needs. The most secure option is to transfer Bitcoin to a hardware wallet. Software wallets that can be downloaded to your smartphone or desktop also provide a fairly secure storage solution, with your private keys being stored on your device.

Those who buy a small amount of BTC and/or intend to make regular trades may find it more convenient to keep their coins in the free web wallet provided by the platform they use. Platforms can be a target for hackers, however, so you should select one that employs security practices such as using cold storage and insuring the crypto it holds. Frequent traders can also opt to transfer Bitcoin to a secure hardware wallet while keeping some available in a web Bitcoin wallet, the best of both worlds.

Selling Your Bitcoin

When you decide to sell your Bitcoin, the process will be pretty similar to buying it. You can go to your portfolio, select Bitcoin, and click the close button. As long as you used PayPal for your deposit, you can withdraw your funds to PayPal.

If you bought your Bitcoin on the PayPal platform, you can go to Financials, select Bitcoin, and tap “Sell”. As long as you’ve confirmed your tax information, all you need to do is enter the amount, click “Next”, and “Sell Now”.

Final Thoughts

PayPal is a fast and secure way of making payments worldwide, offering the convenience of a credit card but with lower fees. If you find the right platform, you can use PayPal to purchase crypto including Bitcoin quickly, easily, and even anonymously.

Based on our research, we believe Coinbase is the best place to buy Bitcoin with PayPal due to its free deposits, competitive fees, strong security, regulation, and innovative features such as copy trading.