There are two ways to buy crypto with the help of PayPal, one is using PayPal itself to purchase crypto, and the other one is using the partnership that Coinbase and PayPal have now brought forward, as the latter really revolutionizes this trading space.
Cryptocurrencies came forth with almost a revolutionized banking system of sorts, where the transactional data is registered and stored to be verified by everyone rather than by a central controlling body.
Now, you could buy a cryptocurrency if you wanted, just like you would buy a share of a company you backed or hoped to make a profit on.
And that would be done by using a cryptocurrency exchange service, such as Gemini and Coinbase, etc.
Now, the exchanges are like the stock exchanges, and one could buy crypto coins there, but with the common practice and ease of use that PayPal provides its users, there is a sentiment that is more inclined towards the use of PayPal for trading these crypto coins.
Now, let’s take a deeper dive into the world of crypto and cryptocurrency trading.
What Is Coinbase?
Coinbase is globally known as a platform for trading and investing in cryptocurrencies, as it is an exchange service with a mission to provide a secure trading space for crypto traders.
It is well known as on it, the users have the capacity to undergo crypto trading in more than 100 cryptocurrencies, the top tier of those being Bitcoin, Ethereum, Dogecoin, etc.
And over the years of them providing these services and with the explosive growth that cryptocurrencies have had, such as Bitcoin, they have now become a gigantic firm, with approx. 73 million consumers using it for trades and an approximate sum of 225 million dollars as assets being moved around over their online marketplace.
And therefore, it is a trusted exchange, where everyone dealing with crypto is destined to find their way.
Loads of renowned investors tend to back Coinbase, and for a good reason, their services in the field stand out, and their security policy is what attracts users to them.
Hence, this makes them not only authentic but also the most trusted crypto exchange company in the world.
What Is PayPal?
PayPal Holdings, Inc. is an America based financial technology company, with an international reach to countries where online transfer of credit is possible,
This is an easier and more efficient alternative to the traditional checks and money orders payment methods.
So, PayPal is basically the biggest mobile payment firm in the world, and they have been avidly used by consumers for more than a decade now.
The concept was simple when using PayPal one would link their credit cards, debit cards, etc. with it by making a secure online account and then they could make payments using PayPal, by just selecting which account to make the payment from and they could simply just do it at the touch of a button.
And it was not limited just to payments, but it could also receive credit and keep it in your PayPal account to be used in the future.
What Do Coinbase and PayPal Joining Forces Mean for Crypto Trading?
Considering the things that have transpired in the past few years, one big addition to the list is that Coinbase, one of the biggest crypto exchange marketplaces has linked itself with PayPal, the biggest mobile payment platform.
So, has anything changed because of this? One may ask. And the answer is yes; everything has; before this, the only way to buy cryptocurrencies on Coinbase was to link a bank account with your Coinbase account or get a debit card set up with it and those methods can be tedious at times.
And not only that but also, the fact that Coinbase has a 4% cut from all the purchases that you make, and the value of that 4% changes with the amount of money being transferred or received, but ever since they have brought forward this alliance of sorts, they offer to take 2.5% cut if you make those purchases with a PayPal account.
Hence, now you can trade crypto from your phone by just opening an app.
Although this is a revolutionary turn of events, unfortunately, Coinbase and PayPal are only offering this service in the United States of America.
But they announced that they shall be expanding this to other countries too, very soon.
Disadvantages of Making Crypto this Accessible
Cryptocurrencies have a lot of potential as a way of earning a lot of capital, but this also means that a lot of these people would just flood the market and instead would not make any significant profits on their investments.
And this only increases the prices of the coins in terms of crypto, so they want to invest more to enjoy more profit is like betting or even gambling.
As the market is volatile, the prices depend upon the number of users who own these coins, and the intention of all these users is to sell these coins at the most price possible, so it’s a rarity-based trading system that can fall apart very easily as we have seen many times in the past.
And so, one should be careful when making these investments and look at crypto trading as a career choice, because it’s a big gamble.
And thus, most investors recommend not investing more than 5% of your total worth into cryptocurrencies and being more mindful regarding saving capital for emergencies, getting insurances, and keeping one’s credit in order.
Things to Keep in Mind when Buying Crypto with PayPal
With the advent of partnerships such as Coinbase and PayPal, and even Venmo and Robinhood, the world of investing in these volatile numbers, like shares and coins is revolutionizing, the accessibility is becoming very easy, and convenient.
And with crypto being accessed now via PayPal, it requires the kinds of regulations that exist in casinos, with limits of investment dollars per day.
Currently, Coinbase has a $25,000 investment per day policy, but for a lot of people $25,000 makes up most of what they earn in a year.
And as crypto is very much like gambling, it can be transformed into an addictive tendency very easily and can lead a person down a road to bankruptcy themselves, in the hopes of making the millions, that they probably will never be able to make.
It also puts children at risk of losing perspective; with the advent of social media being used as a career choice, the children started moving towards those routes, as it seemed easier to do.
But it wasn’t, and they quickly found that out as they were flooding the market and, in such circumstances, only a few get to rise to the top.
But with that, the amount being invested into social media monetarily did not have as much potential for loss as crypto and the stock market. And that is risky in a lot of ways, for everyone all the way from the youth to their parents.
The Way to Buy Crypto Using Only PayPal
In order to buy cryptocurrencies on PayPal, you firstly need a PayPal account.
And in case you already have an account, you can simply go into the crypto section of the PayPal app, and from there, you can decide the coins that you would be interested in buying.
At the moment, you have the capacity to buy four crypto coins, i.e., Bitcoin, Litecoin, Ethereum, and Bitcoin Cash.
Although, experienced investors suggest that one should stick to just investing in Ethereum, and Bitcoin if they are a beginner buyer.
There is a freedom of buying crypto on PayPal, but with all things, there is a limit to everything, as you can only make up to $100,000 worth of purchases of crypto on PayPal in a week.
And it goes without saying, this trading should be done responsibly.
The Fee of Buying Crypto Only Using PayPal
When getting a service such as this, there is always a price tag attached to it, and so is here.
If you avail of the service available here on PayPal itself, you have to pay a certain amount of service charges, which vary on the number of purchases you make.
So, for a range of $1 – $24.99, you must pay $0.5 as service charges, for a range of $25 – $100, the charges are 2.30% of the amount of money spent, then for a range of $100.01 – $200 the charges become 2%, then $200.01 – $1000 the charges are 1.8%, and so on.
So, knowing these payments is of great significance when making purchases using PayPal’s services.
Along with all that, you must undergo an ID verification as you go forth with purchasing crypto, and also fill up a W-9 form.
What Are the Alternatives to Buying Crypto Using Only PayPal?
Using just PayPal to buy crypto seems like an easy, and approachable option to avail, but there are a few drawbacks that you should consider.
So, when you buy crypto on PayPal, you don’t necessarily own it, you just hold on to it until you have to sell it away using nothing else but PayPal.
With a traditional crypto trading exchange, like Coinbase or Gemini, you have the capacity to transfer it to any of your own accounts and move it around, but with PayPal, that is not an option, and thus all you can do is spend it in some way and can’t store it.
Therefore, if you want to have good control over your coins and intend to have ownership of the assets you have invested in, you may want to consider a proper crypto exchange which may seem like a difficult and complicated option but is way more trustworthy.
And now, with the advent of Coinbase and PayPal holding hands, you have the best of both worlds; you can buy your favorite coins using PayPal but on Coinbase, thus have all the ownership benefits of Coinbase and PayPal combined.
Hence, whether you use just PayPal or use some other exchange service to purchase your cryptocurrency, make sure you do it with a small and safe chunk of your total capital and make a very diversified investment, so all your assets don’t suffer the same fate at the same time.
Also, taking care of one’s finances with regards to emergency funds, insurances, etc., should be given more importance than crypto trading as they are a lot more significant than that.
Final Verdict
This article is aimed at giving you some understanding of the crypto trading world, its pros and cons, and the best ways of implementing crypto trading.
We also discussed the partnership that Coinbase and PayPal have brought forward at least in the United States, which they hope to expand as they move forward.
Also, the fact that PayPal did provide a service of purchasing crypto using their app, but there are repercussions and limitations to that, which we isolate and discuss and rate against the possible alternatives which are available in the field which may involve the use of crypto exchange services, and the most talked-about one we discuss is Coinbase.
But there are limitations to using those too, ranging from the debit and credit card setups all the way to bank account verifications and so on.
Thus, the best solution we discussed for at least the citizens of the Free World, United States of America, is to use Coinbase set up with PayPal, so that you can make your US dollar transactions in PayPal, but make them use Coinbase’s services.
In that way, you have the advantages of the exchange service of Coinbase, and the advantages and ease of usage that is provided by PayPal. And it obviously goes without saying, invest responsibly.