Here are the four best methods to buy Bitcoin using PayPal, as well as the pros and cons of each technique.
Like most reputable financial institutions, PayPal has been somewhat skeptical about Bitcoin trading and cryptocurrency in general.
Although they have been somewhat more flexible, supporting Bitcoin transactions in the past few years, buying Bitcoin with PayPal is still a cumbersome and expensive process. However, there still exist many easy ways to buy Bitcoin using PayPal. They include:
Using the eToro platform
Using the eToro platform might be the easiest way to purchase Bitcoin using PayPal. The disadvantage, however, is that your possible trade options have been limited.
This option is best for those who do not wish to own Bitcoin but instead want to speculate about the price of crypto and convert the profit back to fiat currency. The eToro platform allows users to purchase Bitcoin using fiat currency. Users can hold the crypto until the price swings in a good direction, and resell the crypto for fiat currency.
The distinct disadvantage of this system is that you do not own the cryptocurrency but rather borrow it hoping the price will rise in the future.
While this may not be the most convenient way to purchase Bitcoin, it saves you from the added risk of having to store the cryptocurrency in your Bitcoin wallet.
The platform does not support operation in some countries, and you cannot withdraw the crypto off the platform, but it still has the lowest fees and most extensive range of payment options available.
Buying Bitcoin through LocalBitcoins
For buyers who wish actually to own the Bitcoin they buy, LocalBitcoins may be a better option than eToro. LocalBitcoins is a cryptocurrency exchange platform that allows buyers and sellers to deal directly. The platform enables you to communicate with interested sellers directly and purchase Bitcoin from them.
You will be pleased to know that they are one of the few cryptocurrency exchanges that allow users to make payments through PayPal. All you have to do is follow the easy steps outlined below:
- Log into the LocalBitcoins website and enter the amount of Bitcoin you wish to purchase and who you want to buy it from.
- On the next screen, you will see the list of available sellers. Go through this page carefully to vet their credibility. Since you are dealing with a real individual, the probability of fraud is high. Ensure their email address, phone number, and ID are verified. Other things to look out for are the number of users who trust the seller, the number of users who blocked the seller, their feedback score, how old the account is, and the number of confirmed trades.
- Once you’ve found a seller and you’re satisfied with their credibility, you can proceed to the trade screen. This page displays vital information about the seller. The pieces of information displayed include their trade limit, location, and the payment window. Read any additional conditions the seller may attach to the trade.
- Once you’re done with this, type in the amount of Bitcoin you would like to buy and click “Send trade request”.
The transaction will then be carried out through the platform. Your coin will be held in escrow by the platform until your payment has been confirmed. The seller will receive a notification message, and the Bitcoin will promptly be sent to your crypto wallet.
Buying Bitcoin using xCoins
The xCoins.io platform is another seamless way of buying Bitcoins through PayPal. Sergey Nikitin founded the platform in 2016. The main concern is that their business model is somewhat unorthodox. Instead of selling Bitcoin to buyers, the platform links up buyers with “lenders” who allow buyers to “borrow” Bitcoin for a price.
However, the transaction fees are quite high due to a 10% lenders fee, the 3.5% loan origination fee, and the 2.9% PayPal processing fee. That means you end up paying almost 20% of the amount of Bitcoin you want to buy as transaction fees. That’s an extremely excessive amount to pay.
The site states that the “loaned” Bitcoin can be returned at any time, with a full refund of your investment (minus the fees). From this, it looks like the site operates somewhat like the eToro platform.
Though the fees are quite high, it has been used by some investors as a “backdoor” of sorts to get around the restrictions they face when trying to buy Bitcoin using PayPal.
Buying Bitcoin using Paxful
Paxful is a peer-to-peer platform that allows users to purchase cryptocurrency with almost any payment method. The platform enables you to communicate with the seller once the trade has been initiated.
Trading with Paxful involves just a few easy steps:
- Open an account on the platform.
- Choose a payment method for making the purchase and the desired amount of Bitcoin you wish to buy.
- Choose a seller and initiate the trade. You can either choose a seller manually or let Paxful decide who the best seller is then.
Once you initiate the trade, the seller’s Bitcoin will be put in escrow until you confirm that you’ve sent your payment. After this, the units of bitcoin you purchased will be released into your Bitcoin wallet.
Keep in mind that if you don’t finalize the deal within a specific timeframe (usually 30 minutes), the transaction will be automatically canceled. You are required to stay online while the trade is going on.
Buying Bitcoin through PayPal isn’t easy, and it sure isn’t cheap. With these four methods, however, it’s possible. So, try any of these techniques and see which one works best for you.