PayPal is an extremely popular payment platform, with about 325 million active users worldwide. It’s only natural, therefore, that a lot of people will want to use their account as often as possible and for many different types of online purchases and transactions.


When it comes to buying cryptocurrency, however, it’s not straightforward to do so directly from your PayPal. The picture is also regularly changing. For example, in January 2020, the Bitcoin exchange VirWoX shut down, closing one possible PayPal purchasing platform. 


It isn’t impossible to use PayPal for your cryptocurrency activities, however, so we’ve put together a quick guide to show you how it’s done in 2020…

Buying cryptocurrency with PayPal: The chargeback barrier

Before we get into the details, though, it’s important to explain why PayPal isn’t typically accepted by cryptocurrency exchanges.


Part of the reason that PayPal itself is popular is that it supports chargebacks, in which consumers can get their money back if their goods and services were not delivered. While this may be useful consumer protection, it’s problematic for the world of cryptocurrency and raises the danger that unscrupulous buyers could claim they never received their cryptocurrency. Given that this would be difficult to prove, there’s an increased risk of fraud involving transactions of this manner and tipping the balance in favour of people who could abuse this to get cryptocurrency without paying.


From time to time, you might well see that new exchanges claim to offer PayPal payments. It’s important to proceed with caution, understand why the vast majority don’t accept these payments and double-check the credentials of the exchanges in this case.


It’s likely that anyone who does accept PayPal payments will charge fees for this. These can be as high as 10% of your total transaction – and there may also be currency conversion fees to pay on top of this. Before you make any payment, ensure that you’re aware of the potential fees and have factored these into the price you’re paying.

How to buy cryptocurrency with PayPal

There are, therefore, two main options left open to you when you wish to buy cryptocurrency with PayPal. These are:

  1. Trading in cryptocurrency price movements
  2. Peer-to-peer exchanges.


Trading cryptocurrency

You can use your PayPal account to make cryptocurrency investments with eToro (details of how to make a deposit can be found here). In this instance, you’re able to use your knowledge of the market to speculate on price movements – a feature that’s common for the cryptocurrency market. The fees are low and you can withdraw your money in a fiat currency. However, you don’t physically own the cryptocurrency, so it’s not an option for people who want/need to own the asset outright.


Peer-to-peer cryptocurrency marketplaces

Peer-to-peer exchanges are sites in which individuals can connect with each other and arrange for the buying and selling of cryptocurrencies. As a buyer, you can search through the listings from existing sellers and look for ones that accept PayPal. Each individual seller will set their own terms and it’s important to remember that not all of them will accept PayPal. Plus, if they do, they may set a high amount of fees. Alternatively, many exchanges will allow you to place your own ad, explaining what you’re looking to buy and that you wish to use PayPal to make your purchase. You might need to establish your reputation on a platform before you’re able to buy and sell – reputation matters, just like with a consumer platform such as eBay and Amazon – so you may need to make a couple of small purchases before you go ahead with a PayPal purchase.

If you wish to look further into cryptocurrency marketplaces, look into LocalBitcoins and Paxful.


Peer-to-peer lending exchanges

Similarly, you can turn to – which is a cryptocurrency lending platform. You can use PayPal to get a secured Bitcoin loan, paying an interest rate for the loan that – just as with the exchanges above – is agreed between the buyer and seller along with any fees.


Withdraw cryptocurrency to PayPal

While this guide is primarily focussed on buying cryptocurrency, it’s important to point out that sites such as Coinbase do allow you sell and withdraw your balance into a PayPal account, even though you cannot use this to buy cryptocurrency. In 2020, this function continues to be rolled out to Coinbase users.


Similarly, it’s also important to point out that cryptocurrency cannot be stored in your PayPal account, it has to be held in a dedicated wallet and sold into fiat currency before it can be held by PayPal.