Buying Bitcoin with PayPal (Beginner’s Guide)

By: Ofir Beigel | Last updated: 3/2/23

Until recently, there were limited options to buy Bitcoin with PayPal, mainly due to chargeback issues (here’s a short video illustrating this). However, recently PayPal has become more favorable of Bitcoin. In this post I will cover several credible places to buy bitcoins with PayPal in 2023.

How do I Buy Bitcoin with PayPal Summary

While buying Bitcoin directly through PayPal is possible, however better alternatives exist for those who wish to use PayPal as a payment method only. The best alternative for buying Bitcoin with PayPal is via Bitstamp or Coinbase. Another option would be eToro, which is more recommended for users who mainly wish to speculate on price rather than owning actual coins.

Finally, you can use Paypal via LocalCoinSwap, although this method requires you to find an individual seller you can trust.

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79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

CFDs are not available to US customers.

If you want a more detailed explanation about each method keep on reading. Here’s what I’ll cover:

1. Buy Bitcoin directly through PayPal

Pros: Low risk, very high maximum limits

Cons: Only the US is currently supported for withdrawals

In October 2020, PayPal rolled out direct purchases of Bitcoin (and three other cryptocurrencies) within the PayPal digital wallet, through a partnership with Paxos.

This allows users to hold and sell Bitcoins purchased through the service, as well as use them to pay PayPal-supported merchants. As of June 2022, PayPal also allows users to withdraw their coins into third-party wallets for personal storage or wider use throughout the ecosystem. It’s worth mentioning that this option is currently only available for US users, with more countries due to be added over time.

Maximum limits are $10,000 per week with no annual limit, while fees vary between 1.5% and 2.3%, depending on the size of the purchase.

How to Buy Bitcoin Directly on PayPal

1. Sign up for an account, if you don’t already use PayPal
2. Click on “Buy and Sell” under the “Your crypto” section (available only to supported locations)
3. Click on “Bitcoin” and “Buy”
4. Enter the amount of Bitcoin you want to buy
5. Select your payment method and click “Next”
6. Check the conversion rate and transaction fee.

If you want a more detailed explanation about each method keep on reading. Here’s what I’ll cover:

That’s it! Click ‘Buy now’ to confirm the purchase and the coins should be available in your PayPal digital wallet.

2. Buy Bitcoin with PayPal through Bitstamp

Pros: Very well-established, highly trustworthy

Cons: Cannot withdraw back to PayPal (yet), lower limits than other platforms

Bitstamp is one of the oldest and best-respected cryptocurrency exchanges today, being in operation since 2011.

The platform supports PayPal for Bitcoin purchases if you’re a resident in the US or EU, and pay with EUR, USD, and GBP.

There’s a limit of up to $2,500 daily and a cap of $20,000 per month. Fees on PayPal purchases are 5% of the total purchase amount, which is high (but not uncommon) for the payment method.

It should be noted that as of writing, users cannot withdraw money directly back to their PayPal account upon selling their Bitcoin – they will have to opt for an alternative fiat withdrawal method.

Click here to read a full review of Bitstamp and its services.

How to Buy Bitcoin with PayPal through Bitstamp

1. Select Bitcoin from the assets page, then click Buy with PayPal. Alternatively, you can click “Direct Crypto Purchase” on the Deposit page.
2. Enter the fiat amount you wish to spend, then click on “Buy with PayPal”.
3. You’ll be directed to the PayPal login screen, where you can link your PayPal account with Bitstamp.
4. Ensure that the name associated with your PayPal account is the same as the one you’ve used to register your Bitstamp account.
5. Confirm the transaction. Your accounts will be successfully connected, and the purchase can be completed.

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3. Buy Bitcoin with PayPal through Coinbase

Pros: Well-trusted platform, high limits

Cons: Cannot purchase from PayPal balance directly, US customers only

Coinbase, one of the world’s most trusted cryptocurrency exchanges, began accepting PayPal as a means of payment in 2022. Unfortunately, as of writing, Coinbase doesn’t allow users to buy directly using their PayPal balance, but rather through a debit card or bank account that is linked to their PayPal account. This is somewhat restrictive. On the bright side, the maximum daily limits are nice and high at $25,000 per day.

Fees for using PayPal to make a debit card purchase on Coinbase are 4% of each trade, while bank deposits via PayPal cost 2.5%.

Coinbase users may also withdraw fiat from Coinbase to their PayPal account. You can read my full Coinbase review here.

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4. Buy Bitcoin with PayPal through eToro

Pros: Relatively low fees, a variety of payment methods accepted

Cons: Not available worldwide, withdrawing profits in crypto is complicated

One of the easiest alternative ways to buy Bitcoin with PayPal would be through eToro, but only for a limited purpose. While the platform will allow you to buy bitcoins with PayPal, withdrawing them to your wallet will take an extensive amount of time and steps.

In other words, eToro is better suited to speculate on Bitcoin’s price rather than for buying the actual coin for using it. If you’re just looking to profit from price swings and don’t require the actual bitcoins, this is probably the easiest and cheapest way to go. If, however, you need the actual bitcoins to buy stuff or send them to another person, keep reading for an alternative option.

Keep in mind that if you use eToro for speculation, you don’t actually need a Bitcoin wallet. You can read my full eToro review here.

IMPORTANT!  Cryptocurrencies can widely fluctuate in price and are not appropriate for all investors. Cryptocurrency trading is not supervised by any EU regulatory framework, your capital is at risk.

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eToro disclaimer: This ad promotes virtual cryptocurrency investing within the EU (by eToro Europe Ltd.), UK (eToro UK Ltd.) & USA (by eToro USA LLC); which is highly volatile, unregulated in some EU countries and the UK, no EU or UK consumer protections & not supervised by the EU or UK regulatory framework. eToro USA LLC; Investments are subject to market risk, including the loss of principal.

79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

CFDs are not available to US customers.

5. Buy Bitcoin with PayPal through CEX.io

Pros: Established & regulated exchange, great reputation

Cons: Lower daily limits than other options, not available worldwide

CEX.io is a well-established exchange that has been around since 2013. It’s known to be highly reliable and is well-regulated, but is also equally well known for relatively high fees.

On the plus side, CEX.io offers Bitcoin purchases via PayPal at competitive pricing. This can be done via CEX.io’s “Buy” option within the wallet app, or on the exchange using the “Instant Buy” feature.

PayPal purchases on CEX.io are limited at a maximum of $1,000 daily, or a minimum of $20. Fees include a lowered 1.49% service charge for GBP deposits made by UK residents, or 2.99% to 3.99% plus a variable service fee for other countries, depending on the country.

A list of countries supported for PayPal purchases on CEX.io can be found at the bottom of this page.

Click here to read a full review of CEX.io and its services.

How to Buy Bitcoin with PayPal through CEX.io

1. Navigate to the CEX.io Instant Buy service.
2. Select BTC in the “Buy” dropdown menu, then select the fiat currency you wish to purchase it with.
3. Enter the amount of Bitcoin that you wish to buy, or select one of the pre-calculated suggestions.
4. Click “Buy” and select PayPal as your payment method and click “Log in with Paypal” to link your PayPal account.
5. Select PayPal as your payment method once more, then click “Buy with PayPal”.
6. Complete the purchase within the PayPal account window.

All done! When the transaction is completed, you’ll be able to see the updated Bitcoin balance in your CEX.io account.

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6. Buy Bitcoin with PayPal through LocalCoinSwap

Pros: A wide variety of sellers from around the world

Cons: Poor exchange rates, additional risk of dealing directly with individuals

LocalCoinSwap, unlike eToro, is a marketplace where buyers and sellers connect directly. When you use LocalCoinSwap, you’re dealing with an actual person, which means that the seller’s credibility is another thing to watch out for.

As for fees, sellers will usually charge a premium since they’re taking a big risk of buyer chargebacks. The upside is that you will usually get your bitcoins faster. You can read my full LocalCoinSwap review here.

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How to Use LocalCoinSwap

Step 1 – Enter your search parameters

The first step will be to go to LocalCoinSwap and enter whether you wish to buy or sell crypto, what coin you wish to trade, what payment method and finally the location of the deal. Although LocalCoinSwap was originally made for people to meet face to face, there’s a”worldwide” search, which is cool. Alternatively, you can go through each country, one at a time, to see relevant sellers.

Step 2 – Choose your seller

After you’ve entered your preferred parameters, you’ll see a list of available sellers. You can now browse them one by one. Clicking on each seller will open a detailed view including important info:

Some of the things I’d check before trusting a seller are:

• Feedback score
• How many confirmed trades does this seller have?
• How old is the account?
• How many people trust this seller?
• How many people blocked this seller?

In the end there’s no real measurement to help you evaluate how reliable a seller is. You will need to use common sense after reviewing their complete details.

Step 3 – Complete the trade

Once you’ve found your seller, you can click on the ‘buy’ button. There you’ll be able to see information about the user’s trade limits, location and payment window (How much time you have for sending funds and marking the payment done after you initiate a trade).

It’s also super important to read the terms of trade for the specific seller located on the right side. Here’s an example:

Some sellers will require that you have an initial reputation in order to buy from them to avoid scams or fraud. This means that you might have to conduct some small transactions to build your reputation.

Once you went over all of the information and made sure it suits you, just enter how many bitcoins you want to buy and click “Buy Bitcoin”

It’s crucial to conduct all communications within LocalCoinSwap and preferably use their escrow services (which are triggered automatically for all online sales). While this method is relatively fast, it may take some time to gain enough reputation and find a seller.

7. Buy Bitcoin with PayPal through Paxful

Pros: Wide variety of sellers from around the world

Cons: Poor exchange rates, additional risk of dealing with individual sellers

Paxful is a very similar platform to LocalCoinSwap. It’s a peer-to-peer marketplace that allows you to buy Bitcoin with almost anything (e.g., Skype credits, Amazon gift cards). The process of buying bitcoins at Paxful is pretty simple:

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How to Use Paxful

1. Create an account.
2. Verify your identity.
3. Choose a payment method for buying and the desired amount.
4. Choose your seller. You can either choose manually, or let Paxful decide who is the best seller for you.

Once the trade initiates, you will be sent to an online chat with the seller, where you can finalize the deal. The seller’s bitcoins will be sent into escrow, and once you mark that you’ve sent your payment, they will be released into your account. Keep in mind that if you don’t finalize the deal within a certain timeframe (usually 30 minutes), the deal will be automatically canceled.

You can read my full Paxful review here.

8. Frequently Asked Questions

Can I Buy Bitcoin with Paypal on Coinbase?

Yes. Though it requires a debit card or a bank transfer, Coinbase allows you to buy Bitcoin, as well as sell and withdraw the balance to your Paypal account.

Can I buy any other crypto with PayPal?

You can also use LocalMonero or LocalCryptos to buy Monero or Ethereum with PayPal however the same rules and downsides apply – you’ll probably pay high fees and it may be hard to find credible sellers.

I found an additional method not listed here, is it legit?

From time to time, I see many new sites that allow you to use PayPal for Bitcoin purchases. Personally, I’m very skeptical of such sites and advise you to treat them with caution. Reputation goes a long way when it comes to cryptocurrencies, and the methods I’ve described above have all been tried and tested by me.

Moreover, the companies that are described in this post have been around for at least three years and have proven they are here to stay. Having said that, feel free to list what you’ve found in the comment section below and we’ll give you our opinion of it.

9. Conclusion – Can I Use Paypal to Buy Bitcoin?

There are several ways you can buy Bitcoin with PayPal, the easiest being through the actual PayPal platform. Some other alternatives also allow you to purchase coins using PayPal as a payment method, such as Coinbase and LocalCoinSwap. eToro is also a very convenient option, but is more suitable for users who are looking to speculate on price rather than actually withdrawing their coins.

Have you had any experience with buying Bitcoins with PayPal? If so, I’d love to hear about it in the comment section below.