After the price of Bitcoin strongly broke through $16,000, outsiders gradually turned their attention to BTC. For example, a neighbor asked the author if there is a simple and reliable way to buy Bitcoin because he thinks it is better to toss the wallet. Trouble, and at the same time I don’t trust some exchanges in the currency circle.
I thought about it and replied with a solution: PayPal.
Unfortunately, he still needs to wait a bit longer, because PayPal currently does not support the use of cryptocurrency transaction services for international users outside the United States, and is expected to support it in 2021.
Not long ago, PayPal officially announced its cooperation with Paxos crypto brokerage company. Some of its US users can trade BTC, ETH and other cryptocurrencies through PayPal accounts. For example, Circle CEO Jeremy Allaire tried to buy $100 in bitcoin on PayPal currency.
Today, PayPal also stated that it will open its cryptocurrency service to all eligible U.S. users and increase the weekly purchase limit from $10,000 to $20,000.
How to use PayPal account to trade Bitcoin
Now, suppose I have the qualifications to trade cryptocurrency with PayPal, or if I cross over to next year, then I can use the PayPal application or log in to my PayPal account online to trade Bitcoin. The steps are as follows:
Click on the cryptocurrency section of your account, you can find it on the PayPal homepage, or you can visit this page at paypal.com/myaccount/crypto/.
Choose the cryptocurrency you want to buy (BTC, ETH, BCH and LTC are initially supported);
Click “Buy”, if this is your first purchase, you need to confirm your account;
Choose the quantity to purchase and the payment method. You can usually use your bank account, debit card or your PayPal balance to buy cryptocurrency;
Check and buy. Check the details of your transaction, and then click “Buy Now”.
After purchasing BTC through my PayPal account, I can see the balance information in my account. Since PayPal is the bitcoin for users, it is actually equivalent to a centralized exchange, and I can purchase it on the PayPal platform After cryptocurrency, I can only choose to hold or sell. The difference from the purchase step is that during the sale process, I need to confirm some tax information for my account (note: in the United States, holding cryptocurrencies such as Bitcoin requires paying taxes to the IRS).
Pros and cons of using PayPal to buy cryptocurrencies such as BTC and ETH
Above we briefly introduced the steps involved in using a PayPal account to trade BTC and other cryptocurrencies. What are the specific advantages and disadvantages of using this platform?
Easy to use, you only need a few clicks through the PayPal application or official website to complete the transaction;
You can track your investment portfolio and you can see how much your holdings are worth at a glance;
Flexible payment methods, you can use bank account, debit card or PayPal account balance to pay;
Instant transactions, buying and selling Bitcoin and other cryptocurrencies through PayPal is instant;
The transaction fee charged by the PayPal platform is higher than that of existing cryptocurrency trading platforms; data as of November 9, 2020 show that the costs involved in buying and selling cryptocurrencies such as Bitcoin on PayPal are:
(Data from: Zak Killermann)
You cannot control the bitcoins you buy on PayPal. The platform does not allow users to withdraw the bitcoins they bought to an external wallet;
Limited transaction options, currently PayPal only supports BTC, ETH, BCH and LTC transactions;
The exchange rate is relatively poor compared to other trading platforms, which means that when you buy or sell cryptocurrencies, you will face a little price disadvantage compared to other trading methods;
Involving tax payment issues;
As shown above, the ratio of the cost of buying and selling Bitcoin with Paypal is not fixed. It is better to buy a larger amount at one time instead of buying multiple times (for example, buying a $200 cryptocurrency will cost more than buying 199 dollars less).
One final point: For many people who are not familiar with traditional trading or custody channels such as Bitcoin, the cryptocurrency transaction service provided by PayPal will undoubtedly be very convenient, and in 2021, PayPal will also support its users to use Bitcoin Waiting for cryptocurrency to pay for daily consumption, this will undoubtedly be good news.
How are you looking forward to that day?