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How to buy Ethereum with PayPal

How to buy Ethereum with PayPal
Written by publisher team

People cannot buy cryptocurrency through bank transfers or using online brokerage options like Fidelity. However, investors have many options for buying 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 buy, sell and hold Ether (ETH) and other cryptocurrencies through the platform’s e-wallet since 2020. Apart from making the process less risky for starters, PayPal offers a reliable option for buyers in countries that face banking restrictions and other entry barriers Digital currency trading. However, buying directly via the platform has its drawbacks that can affect the entire investor experience.

Fortunately, there are different ways to buy ETH with PayPal, and every crypto investor can rest assured that there is a purchase method that matches their interests. Here are the most popular and easy ways that buyers can pay for their ETH purchase using PayPal, along with the advantages of each method.

Buy Ethereum directly from the PayPal app

In 2020, PayPal introduced a “crypto” button, allowing users to buy, sell and hold cryptocurrency or learn more about the entire investment project. Due to the volatile nature of cryptocurrencies, the platform only allows investors to exchange the four major currencies: Bitcoin (BTC), Litecoin (LTC), Bitcoin Cash (BCH), and ETH.

These cryptocurrencies are more stable and subject to less price fluctuations compared to the latest new entrants in the industry. As a result, they are the options that most seasoned investors recommend to beginners in the field.

Buying Ethereum directly from the PayPal platform is one of the easiest ways to buy and own ETH. People interested in buying cryptocurrency on PayPal are required to open a PayPal account and choose cryptocurrency for purchase.

The regulations regarding cryptocurrency are strict. Thus, PayPal typically requires all of its users to undergo a Know Your Customer (KYC) verification procedure and agree to the platform’s terms of service before authorizing any crypto transactions.

This process entails the issuance of documents to support the identity of the user and provide evidence. Some of the documents commonly used in this process are copies of proof of address, a government-issued ID for the user, and the bank link. For US residents, a W-9 tax form is also an essential document required for verification.

For users who are wondering how to buy Ethereum with PayPal in the UK, it is the same process, except for the tax regulatory procedures applicable in the UK.

How much Ethereum can investors buy on PayPal and what are the fees?

PayPal allows investors to buy or sell ETH from $1 to $100,000 on a weekly basis. The transaction fee depends on the amount purchased. The table below shows the different fees for different purchases.

PayPal Fee for ETH

Although it is easy and secure, buying ETH directly from PayPal has its drawbacks that may annoy many cryptocurrency buyers, especially those who have maximum control over their own assets. The next section introduces several limitations that come with this process.

Limitations of Buying Ethereum on PayPal

PayPal allows cryptocurrency investors in the US and around the world to easily buy, sell and hold Ethereum via its platform. However, PayPal does not give users maximum control over their own wallets, as evidenced by native cryptocurrency exchanges such as Gemini and Coinbase.

PayPal only allows users to own their crypto as the equivalent of fiat currency. As a result, an investor cannot transfer coins through different accounts on or off PayPal or sell their assets to others.

Thus, the only way to withdraw coins purchased in this way is to sell them on PayPal. Paypal lockout is one of the biggest concerns of most buyers who are considering how to buy Ethereum with PayPal.

Despite the main drawback, this method remains ideal for novice investors who are still experimenting and cannot navigate the seemingly intimidating interface and intricacies of cryptocurrency exchanges.

As mentioned, PayPal allows users to buy ETH for as little as $1, making it an ideal option for beginners who focus on gaining experience while minimizing the risk of losses. Being a widely used and reputable platform makes the buying experience less difficult for most beginners.

However, users who are looking for more flexibility with their coins and possibly lower transaction fees can consider alternative ways of how to buy ETH with PayPal in the US and other parts of the world, as discussed in the next section.

Pay for Ethereum with PayPal on eToro

Another way that investors can buy Ethereum coins instantly is through the eToro brokerage. This platform started a decade ago as a Contracts for Difference (CFD) brokerage and has since evolved to support the buying, selling and holding of various crypto assets starting in 2019. CFDs allow traders to benefit from price movements without having to own the actual asset.

Although it still does not list all cryptocurrencies, eToro allows investors to trade BTC, Dash (DASH), Ripple (XRP), ETH and other cryptocurrencies quickly and efficiently. In a similar way, eToro is easier to use than cryptocurrency exchanges, so it is best for novice investors and supports up to 14 different cryptocurrencies and their CFDs.

eToro also allows users to purchase digital assets at their convenience and provides greater control over the cryptocurrencies they trade compared to PayPal. For example, buyers can transfer their purchased ETH to their eToro wallet if they wish. Other cryptocurrencies that users can trade through this platform include:

Use PayPal as a payment method on unofficial crypto exchanges

Traders may also choose to purchase their cryptocurrency through the various cryptocurrency exchange markets available as an unofficial buyer. Depending on their interactions and search results, buyers can decide which sellers accept PayPal as a payment method on certain exchange platforms.

Peer-to-peer (P2P) exchange is one of the many easy ways to buy Ethereum with PayPal and allows for direct transactions. Since the seller is another ETH owner, buyers have complete control over the coins they buy 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 sign up with them to access these services. Some of the reputable cryptocurrency exchanges to sign up for include Bittrex, Poloniex, Coinbase, HitBTC, Binance, and other types of platforms.

It should be noted that P2P trading is one of the most risky methods, if not conducted via DEX because the chances of being scammed can be very high. That is why it is recommended that all buyers be careful in every transaction they make, lest they fall prey to scammers.

The only way to reduce the possibility of being scammed is by dealing with reputable traders. Users should do thorough research before committing to trading and learn as much as possible about the terms of service of these platforms.

Furthermore, there are different levels of interaction for this form of Ethereum trading, and the buyer’s experience depends on their approach. Here are two of the most popular exchange sites to consider.

localcryptos

LocalCryptos is an unofficial peer-to-peer exchange platform that has sellers from a specific region across different countries selling their assets. Depending on how serious the buyer is about their search, it’s easy to get in touch with sellers who are willing to accept PayPal as a payment method.

LocalCryptos is not limited to Ethereum support. The platform also allows users to trade Litecoin, Dash, Bitcoin Cash and of course Bitcoin. Users should be careful, however. Like any other unofficial exchange platform, buyers need to beware of scammers and not fall victim to fraud.

Local Bitcoins

LocalBitcoins operates as an unofficial P2P exchange for bitcoin traders. However, Ethereum traders can also look into this direction and contact sellers willing to accept PayPal as a payment method.

Once the buyer has access to his BTC, he can instantly exchange it for ETH. Like other informal exchanges, buyers need to be vigilant and stay wary of scammers, as their only shield in this type of transaction is their intelligence.

What is the value of Ethereum and is it worth the investment?

Since its inception in 2018, the price of Ethereum reached an all-time high in 2021. One of the most recent impressive price hikes occurred in early November when it sold for $4,800 per coin. However, expert cryptocurrency investors can attest that cryptocurrencies are subject to numerous price fluctuations in short periods of time.

Although Ethereum is the second largest cryptocurrency after Bitcoin in terms of market capitalization, it still suffers from high levels of volatility. The value of a coin can be considered stable compared to the latest industry entries. But what influences the price action with Ethereum is the fact that developers can use the blockchain to build decentralized applications (DApps), which obviously has a positive impact on its usefulness. 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 significant price history and far-reaching utility showcase its potential as a stable store of value.

Regardless, Ethereum, like any other cryptocurrency, is gaining value because people think it does. The price is not 100% linked to any tangible commodity or currency, and can change significantly (especially in the short term) due to external factors such as government regulations and media attention.

This is the reason why most investors are advised to consider buying with ETH and holding it, in the hope that the price will continue to rise in the long-term. However, traders who are new to cryptocurrency should invest something they will not regret losing in the event of a worst-case scenario.

Investors should also think about the goals they want to achieve. For example, cryptocurrencies are not a get-rich-quick scheme, regardless of occasional media reports.

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 resource, but how many sources gain for the user. In this way, the investor limits his exposure even when one project fails completely.

What you need 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 take the time to learn how cryptocurrencies work and learn about when to buy, sell or hold their favorite cryptocurrency.

Learning all this information does not guarantee that the money invested in cryptocurrency will make a profit, but at least the information can help investors reduce risk.

When venturing into cryptocurrencies, whether via PayPal or not, it is also important to consider various aspects of personal finance such as settling high-interest debt or setting something aside in emergency funds before investing.

Once the investor’s finances are in order and they have a well-thought-out investment strategy, the next step is to learn the tools that the specific platforms provide for their use. For users who choose to buy ETH via PayPal direct transactions, it is essential to know the drawbacks that come with this decision, weigh them with the advantages and make an informed decision.

Whether investors are considering CEX platforms or their decentralized counterparts, it is essential to know the risks associated with using each one. Investing in cryptocurrency requires building a long-term learning habit, and trading Ethereum is no exception.

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