With Bitcoin's price surpassing $16,000, mainstream attention has turned toward BTC. Many newcomers seek simple and reliable ways to purchase cryptocurrencies without the complexity of wallet setups or concerns about exchange trustworthiness. One such solution is PayPal—though international users outside the U.S. must wait until 2021 for full access.
Recently, PayPal announced a partnership with Paxos, enabling select U.S. users to trade BTC, ETH, and other cryptocurrencies directly through their PayPal accounts. Jeremy Allaire, CEO of Circle, even tested the service by buying $100 worth of Bitcoin. Today, PayPal further expanded access to all eligible U.S. users, doubling the weekly purchase limit from $10,000 to $20,000.
How to Trade Bitcoin Using PayPal
Assuming you qualify (or time-travel to 2021), follow these steps to trade cryptocurrencies via PayPal:
- Access Crypto Section: Navigate to the cryptocurrency tab on PayPal’s homepage or visit
paypal.com/myaccount/crypto/. - Select Currency: Choose from supported options (BTC, ETH, BCH, LTC).
Purchase Flow:
- Click "Buy" and confirm your account if it’s your first transaction.
- Specify the amount and payment method (bank account, debit card, or PayPal balance).
- Review details and click "Buy Now".
Once purchased, your BTC balance appears in your account. Since PayPal custodially holds the assets, it functions like a centralized exchange. Note: You can only hold or sell cryptocurrencies here—no withdrawals to external wallets. Selling also requires tax information confirmation per U.S. regulations.
Pros and Cons of Using PayPal for Crypto Trading
Advantages:
- Ease of Use: Few clicks to complete transactions via app or website.
- Portfolio Tracking: Clear visibility of holdings and values.
- Flexible Payments: Bank transfers, debit cards, or PayPal balance accepted.
- Instant Transactions: No delays in buying/selling.
Disadvantages:
- Higher Fees: Compared to dedicated crypto exchanges, PayPal charges steeper fees (see table below).
- No Wallet Control: Cannot transfer coins to external wallets.
- Limited Selection: Only BTC, ETH, BCH, and LTC supported.
- Worse Exchange Rates: Less favorable pricing than specialized platforms.
- Tax Implications: U.S. users must report transactions to the IRS.
Fee Structure (2020 Data)
| Transaction Amount | Fee Percentage |
|---|---|
| < $25 | $1.00 |
| $25–$100 | 2.30% |
| $100–$200 | 2.00% |
| > $200 | 1.50% |
👉 Pro Tip: Larger purchases reduce effective fees (e.g., $200 costs less proportionally than $199).
Future Outlook
In 2021, PayPal plans to enable crypto payments for everyday purchases, bridging the gap between digital assets and mainstream commerce. This integration could significantly boost adoption among non-technical users.
FAQs
1. Can I withdraw Bitcoin from PayPal?
No. PayPal operates as a custodial service, meaning you cannot transfer purchased BTC to private wallets.
2. What countries support PayPal’s crypto services?
Currently, only the U.S. Rolling out internationally in 2021.
3. Are PayPal crypto transactions taxable?
Yes. U.S. users must report gains/losses to the IRS, similar to stock trades.
4. Which cryptocurrencies does PayPal support?
BTC, ETH, BCH, and LTC—with potential expansions later.
5. How fast are PayPal crypto transactions?
Instant for buys/sells within the platform.
6. What’s the maximum weekly purchase limit?
$20,000 for verified U.S. accounts.
👉 Explore secure crypto trading platforms for more options beyond PayPal. Whether you're a beginner or seasoned trader, diversifying your approach ensures better flexibility and control over your investments.
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