How to Buy Bitcoin With PayPal
You can buy bitcoin through a payment processor like PayPal Holdings, Inc. (PYPL). There are two ways to purchase bitcoin using PayPal: connecting your account to a debit card or bank account, or using the balance of the PayPal account to purchase cryptocurrencies from a third-party provider.
Users in the United States can buy Bitcoin, Ethereum, Litecoin, and Bitcoin Cash directly through PayPal. Residents of all states may either utilize their existing PayPal accounts or create new ones, with the exception of those living in Hawaii. You may also use your coins to purchase items and services via the “Checkout With Crypto” feature.
When you send Bitcoin to your PayPal account, it earns money from the crypto spread or the difference between Bitcoin’s market price and its USD exchange rate. The firm also charges a transaction fee for each purchase. These fees are determined by the amount of money spent on a certain item.
PayPal is not ideal for purchasing cryptocurrencies since it does not allow investors to move the money outside of the payment processor’s network. Many exchanges and internet sellers do not enable the use of PayPal to buy bitcoin, which is one of eToro’s selling points.
How to Buy Bitcoin With a Credit Card
Although utilizing a credit card to buy bitcoin may involve extra fees or a higher risk of fraud, it is still worth comparing the available options. Some exchanges don’t allow for this method because of those cons, but that doesn’t mean you shouldn’t explore your choices.
When a customer uses their credit card to buy bitcoin, the exchange may add extra costs on top of transaction fees and any processing fees that the exchange may charge the buyer. Credit card issuers view bitcoin transactions as cash advances, which incur significant service charges and interest rates.
For such transactions, American Express users will be charged the current cash advance rate as well as an annual percentage rate of 25 percent. Users are also restricted to spending $1,000 worth of bitcoin each month on their credit card.
Bitcoin rewards credit cards work similarly to regular rewards credit cards, except they offer rewards in the form of Bitcoin. For example, the BlockFi Bitcoin Rewards Credit Card.
ATMs that trade cryptocurrencies function similarly to in-person bitcoin exchanges. Users may purchase bitcoin by inserting cash into a machine and using it to buy. Bitcoin ATMs are becoming more popular, with several retail chains offering them, including Walmart (WMT).
When you buy or sell bitcoins at an ATM, you’re charged two fees: a purchase fee and a conversion fee for turning fiat currency into bitcoin. These fees are both quite high in comparison to other options. The worldwide average purchase fee at Bitcoin ATMs is 8.4% of the total amount purchased, and 5.4% for sales made through ATMs.
A more direct link between users may be found in certain peer-to-peer (P2P) exchange systems. LocalBitcoins is one such service. Users can make offers to buy or sell bitcoin, as well as provide information on payment options and rates, after signing up for an account.
Although P2P exchanges do not provide the same level of anonymity as decentralized exchanges, they do provide users the opportunity to shop around for the best deal. Many of these platforms offer rating systems so that consumers may evaluate potential trade partners before trading.
Robinhood Markets, Inc. (HOOD) is an exchange that enables crypto trading and doesn’t charge commission for cryptocurrency trades or purchases. Instead, it makes its money from the payment for order flow, passing its trading volume onto other brokerages. So far, Robinhood has enabled seven cryptocurrencies on its platform: Bitcoin, Bitcoin Cash, Ethereum, Bitcoin SV Dogecoin, and Ethereum Classic.
Coinbase permits you to trade more than 100 different cryptocurrencies, and traditional brokers such as Fidelity Investments intend to include bitcoin investing for 401(k) retirement accounts by 2022.