People can’t buy cryptocurrencies through bank transfers or by using online brokerage options like Fidelity. However, investors have several options for purchasing digital currencies. Depending on their interests, they can use centralized exchanges (CEXs), crypto wallets, decentralized exchanges (DEXs) and even online payment platforms like PayPal, Robinhood and Venmo.
PayPal has been allowing users to purchase, sell and hold Ether (ETH) and other cryptocurrencies through the platform’s e-wallet since 2020. Apart from making the process less risky for beginners, PayPal offers a reliable option for buyers in countries facing banking restrictions and other barriers to entry for trading digital currencies. However, purchasing directly via the platform has its drawbacks that can impact the entire experience for an investor.
Thankfully, there are different ways to buy ETH with PayPal, and every crypto investor can rest assured that a mode of purchase that matches their interests is available. Here are the most common and easy ways buyers can pay for their ETH purchase using PayPal, as well as the benefits of each method.
Purchase Ethereum directly from the PayPal app
In 2020, PayPal introduced the “crypto” button, allowing users to buy, sell and hold cryptocurrency or to learn more about the entire investment venture. Due to the volatile nature of cryptocurrencies, the platform only allows investors to exchange the four major coins: Bitcoin (BTC), Litecoin (LTC), Bitcoin Cash (BCH) and ETH.
These cryptocurrencies are considered more stable and experience less price volatility compared to the latest newcomers in the industry. As a result, they’re the options most seasoned investors often recommend to beginners venturing in the field.
Purchasing Ethereum directly on the PayPal platform is one of the easiest ways to buy and own ETH. People who are interested in purchasing crypto on PayPal are required to open a PayPal account and choose a cryptocurrency to buy.
The regulations surrounding cryptocurrency are strict. Consequently, PayPal typically requires all of its users to undergo the Know Your Customer (KYC) verification procedure and agree to the platform’s terms of service before authorizing any crypto transactions.
This process entails issuing documents to support user identity and provide evidence. Some of the documents commonly used in this process are copies of proof of address, a user’s government-issued identity card and bank linkage. For United States residents, a W-9 tax form is also an essential document that’s required for verification.
For users wondering how to buy Ethereum with PayPal in the United Kingdom, it’s the same process, except U.K. tax regulatory procedures apply.
How much Ethereum can investors buy on PayPal and what are the fees?
PayPal allows investors to buy or sell ETH from as little as $1 to as much as $100,000 on a weekly basis. The transaction fees rely on the amount purchased. The table below shows different fees for various purchases.
While it’s straightforward and secure, buying ETH directly from PayPal has its drawbacks that may bother many crypto buyers, especially those who enjoy maximum control over their own assets. The next section presents several limitations that come with this process.
Limitations resulting from buying Ethereum on PayPal
PayPal allows crypto investors in the United States and worldwide to buy, sell and hold Ethereum easily via its platform. However, PayPal doesn’t grant users maximum control over their own wallets, as seen with native cryptocurrency exchanges like Gemini and Coinbase.
PayPal only permits users to own their crypto as a fiat-currency equivalent. As a result, an investor can’t transfer coins across various accounts on or off PayPal or sell their assets to others.
Thus, the only way to withdraw the coins purchased with this method is by selling them on PayPal. Paypal locking is one of the biggest concerns for most buyers considering how to buy Ethereum with PayPal.
Despite the major disadvantage, this method remains ideal for beginner investors who are still experimenting and can’t navigate the seemingly intimidating interface and intricacies of crypto exchanges.
As mentioned, PayPal allows users to purchase ETH for as little as $1, making it an ideal option for beginners focusing on gaining experience while minimizing the risk of losses. Being a widely used and reputable platform also makes the purchase experience less daunting to most beginners.
However, users looking for more flexibility with their coins and potentially lower transaction fees may consider alternative ways of how to buy ETH with PayPal in the U.S. and other parts of the world, as discussed in the next section.
Pay for Ethereum with PayPal on eToro
Another way investors can buy Ethereum coins instantly is via the eToro brokerage. This platform started a decade ago as a Contract for Differences (CFD) brokerage platform and has since grown to support buying, selling, and holding different crypto assets starting in 2019. CFDs allow traders to profit from price movements without having to own the actual asset.
While it still doesn’t list all crypto coins, eToro does allow investors to trade BTC, Dash (DASH), Ripple (XRP), ETH and other cryptocurrencies quickly and efficiently. In a similar manner, eToro is easier to use than cryptocurrency exchange platforms, so it’s best for beginner investors and supports up to 14 different cryptos and their CFDs.
eToro also allows users to purchase digital assets at their convenience and offers greater control over the crypto they trade compared with PayPal. For instance, buyers can transfer their purchased ETH to their eToro wallet should they so desire. Other cryptocurrencies that users can trade through this platform include:
Use PayPal as a payment method at informal crypto exchanges
Traders may also choose to purchase their crypto through the various crypto exchange markets available as an informal buyer. Depending on their interactions and search results, buyers can identify sellers accepting PayPal as a mode of payment on certain exchange platforms.
This peer-to-peer (P2P) exchange process is one of the many easy ways to buy Ethereum using PayPal and allows for direct transactions. Since the seller is another ETH holder, buyers gain complete control over the coins they purchase and have the right to decide whether to hold, transfer, or sell them to their friends and other buyers.
However, some of these altcoin exchanges require users to register with them to access these services. Some reputable cryptocurrency exchange platforms to register with include Bittrex, Poloniex, Coinbase, HitBTC, Binance and other kinds of platforms.
It’s worth considering that P2P trading is one of the riskiest methods, if not conducted via a DEX since the chances of getting scammed can be quite high. That’s why it’s recommended that all buyers exercise caution with every transaction they make, lest they fall prey to scammers.
The only way to limit the possibility of getting scammed is by engaging with reputable traders. Users should conduct thorough research before committing to trade and learn as much as possible about the terms of service of such platforms.
Furthermore, there are different levels of interaction for this form of ETH trading, and a buyer’s experience depends on their approach. The following are two of the most common exchange sites to consider.
LocalCryptos is an informal peer-to-peer exchange platform featuring sellers from a given locality across different nations selling their assets. Depending on how serious a buyer is with their search, it’s easy to connect with sellers willing to accept PayPal as a mode of payment.
LocalCryptos is not limited to supporting Ethereum. The platform also allows users to trade Litecoin, Dash, Bitcoin Cash and, of course, Bitcoin. Users should exercise caution, however. Like any other informal exchange platform, buyers need to watch out for scammers and not fall victim to fraud.
The LocalBitcoins site functions as an informal P2P exchange for Bitcoin traders. However, Ethereum traders can also look in this direction and contact sellers willing to accept PayPal as a mode of payment.
Once a buyer accesses their BTC, they can promptly swap them to ETH. Like other informal exchanges, buyers need to exercise vigilance and remain wary of fraudsters, since their only shield in this type of transaction is their wit.
What is Ethereum’s value and is it worth the investment?
Since its inception in 2018, Ethereum’s price hit numerous all-time highs in 2021. One of the latest impressive price hikes occurred in early November when it sold for $4,800 per coin. However, expert cryptocurrency investors can attest that cryptos undergo numerous price fluctuations in short time intervals.
Ethereum, despite being the second-largest cryptocurrency after Bitcoin by market cap, still experiences high levels of volatility. The coin’s value can be considered stable compared to the industry’s latest entries. What does impact price action with Ethereum, though, is the fact that developers can use the blockchain to build decentralized applications (DApps), which obviously has a positive impact on its utility. Developers have to purchase Ether to use the network, and users interested in interacting with any DApp must pay in ETH as well.
Thus, Ethereum’s substantial price history and its far-reaching utility showcase its potential as a stable store of value.
Regardless, Ethereum, like every other cryptocurrency, gains value because people think it does. The price isn’t 100% correlated with any tangible commodity or currency, and can change considerably (especially short term) due to external factors like government regulations and media attention.
This is the reason most investors advise on considering going long with ETH and holding, with the hope that the price will continue increasing over the long run. However, traders who are new to crypto should only invest what they won’t regret losing should the worst-case scenario transpire.
Investors should also consider what goals they want to achieve. For instance, cryptocurrency isn’t a get-rich-quick scheme, no matter what the media reports at times.
The only viable way to create wealth sustainably, according to experts, is through diversification. It’s not about how much an investor puts into a single source, but how many sources produce gains for the user. That way, the investor limits their exposure even when one project fails completely.
What to know before buying Ethereum With PayPal
Buying cryptocurrencies can be intimidating, and it requires a high level of commitment and the right mindset before committing funds. First, investors looking in this direction should dedicate some time to learn about how cryptocurrencies work and familiarize themselves with the indicators of when to buy, sell, or hold their favorite cryptocurrencies.
Learning all this information isn’t a guarantee that the money invested into cryptocurrencies will generate profit, but at least the information can help investors minimize risk.
When venturing into crypto, whether via PayPal or not, it’s also crucial to consider the various aspects of personal finance like settling a high-interest debt or having something put aside in emergency funds before investing.
Once an investor’s finances are in order and they have a well-thought-out investment strategy in place, the next step is to learn the tools offered by the specific platforms to be used. For users who choose to purchase ETH via PayPal’s direct transactions, it’s vital to know the drawbacks that come with this decision, weigh them against the advantages and make an informed decision.
Whether investors are considering CEX platforms or their decentralized counterparts, it’s essential to learn the risks associated with using each one. Cryptocurrency investment requires building a long-term habit of learning, and Ethereum trading is no exception.
Source: Coin Telegraph