Pros And Cons Of Trading Bitcoin Using PayPal Wallet
Bitcoin is the first and most popular electronic coin, while PayPal remains the standard for making online money transfers even today. Combining the two creates the perfect match for trading in the digital world.
Even so, these two financial options have many differences that often pose challenges for users. Before you start trading BTC with PayPal, you should get familiar with the pros and cons that this combination offers, as well as learn about the best places to do it.
The best place to buy Bitcoin with PayPal
The only way you can enjoy the perks we’ll describe below is if you use the right platform to trade safely with Bitcoin. If you want to buy bitcoin with Paypal today, you need to do this on a safe platform that accepts such transactions. One of the most recommended ways to buy and sell BTC with PayPal is through MoonPay.
You can use Moonpay to buy BTC with your electronic wallet or other preferred payment methods. This service is your top choice because it is available globally in over 150 different countries, and offers local currencies of these countries’ bank accounts.
In other words, you can trade with BTC without those high conversion fees and with a very high level of security. Not only are e-wallets a secure way to process payments, but the Moonpay platform is also considered one of the safest places to make your purchase.
The pros and cons of trading with BTC with PayPal
On 21st October of 2021, PayPal made a very important decision that affected the entire crypto market. They launched their new service enabling people to buy, sell, and hold cryptocurrencies. This immediately made positive changes in the crypto world and created huge waves in the BTC community. Soon after it, the price of BTC skyrocketed. This brought on a set of pros and cons that come with trading BTC with this e-wallet. Let’s take a look at them.
- PayPal is a trending, widely accepted, and easy to set up option
- PayPal is a highly secure platform for online transactions
- In 2021, PayPal had 426 million users, which makes this a very available tool for BTC trading
- There are some fees associated with PayPal purchases of cryptocurrency
- There are still strict limitations on how much crypto you can buy with this method
- There’s a limited number of exchanges that offer this option for trading
Now let’s delve into this to help you make your decision on whether or not you should be using PayPal for cryptocurrency transactions.
The advantages of using PayPal for BTC transactions
Despite some notable difficulties associated with this method for cryptocurrency, more and more people decide to use this option today. PayPal is a very popular option known for its simple usage and high level of security. In the crypto world, security is paramount, which is why many jumped at the opportunity to use this e-wallet for their transactions.
That’s not all, of course. PayPal’s simple use makes crypto transactions faster than almost any other method. In this world, how fast you purchase or sell crypto can greatly change the value you’ll get. Many people use this method because they want to trade cryptocurrency in a hurry and PayPal provides them with that option.
Even though there are some fees and low limitations, these differ greatly in different parts of the world. PayPal remains a very popular method for trading Bitcoin in many locations where the fees are lower and the limitations are fewer.
The disadvantages of using PayPal for BTC transactions
As we mentioned, there are certain disadvantages to using PayPal to trade Bitcoin and other digital currencies. It all starts with the fees, which are a big turndown for some traders. If you don’t prefer this option or don’t care if your transactions will be processed fast, you might want to choose a more affordable option. What are the fees associated with this?
According to the latest data, there’s a $0.49 fee for up to $5, a $1.99 fee for up to $75, and a $2.49 fee for the remaining transactions up to $200. The transactions that are over $200, which is the case for most BTC traders, come with fees of 1.8% for purchases and sales that go up to $1,000, and 1.5% for purchases that go higher than this.
The fees are minor when you’re trading less expensive cryptocurrencies. However, with Bitcoin being valued at around $30,000 these days, the fees can go really high, especially if you trade more coins. This cost is higher compared to those with credit cards and bank account transactions, which makes it the biggest downside of using PayPal for this type of transaction.
In addition to this, the limits for trading with PayPal are low on most platforms when this payment option is accepted. This is another reason why you should carefully pick where you’ll trade with Bitcoin. Even if a platform gives you the PayPal option, they can set a cap on how much you can spend, and considering that BTC is highly-priced, they might not even allow you to buy a single coin.
Thankfully, you can avoid this by using quality platforms like Moonpay. This beats the third disadvantage from our list above, which is that your options for trading BTC with PayPal are limited these days. Even now, a year after PayPal allowed crypto transactions, many of the major exchanges do not accept it as a payment method.
Decided to use Paypal? Here are some things you need to know
PayPal is a giant in the financial world, with millions of active account holders and over 26 million merchants that accept this payment method. It’s no wonder that you want to use it. PayPal and crypto traders are eager to use the opportunity of making fast, easy transactions with a highly secure, very popular e-wallet on the market. Even so, you should know how this service works before you start using it.
According to PayPal, they started by featuring a limited number of cryptocurrencies. These include Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. These are the currently available digital coins within the PayPal wallet.
This means that, if you plan to trade between other currencies, you’d have to use another payment method at this moment. If you plan to trade with the top currencies on this list, you can use PayPal to make your purchases and sales.
The PayPal cryptocurrency service is a custodial wallet service in the market. This means that a third party will store your private key, so they’ll be watching over your funds and protecting them for you. On one hand, traders feel very safe about using a method as secure as PayPal. On the other hand, if your wallet is hacked, it can be hard to retrieve the funds since you aren’t the one holding the private key.
The company OKEx exposed this gap in the crypto market. Even though PayPal is considered to be much safer than most e-wallets, you should be aware of how custodial methods work. In the case of OKEx, the founder was arrested and since he was the one controlling the private key, users weren’t able to withdraw their crypto from their account for a long time.
Because of this, some in the crypto world expressed worries about the custodial feature that Paypal introduces. This makes the method centralised and is worried about the lack of flexibility it offers. On the other hand, people that use PayPal believe that this is one of the safest methods, and they feel that their key is much safer in the hands of this secure service than their own.
Since there are many crypto wallets available at the moment, the question arises: which one will you trust? Many will argue that PayPal is so established and known to be secure for a very long time, so it naturally comes on the top list of choices.
Another thing you should know if you want to use PayPal as a way to buy and sell crypto is that your trading options are fairly limited. The cryptocurrencies on the PayPal network can be stored there, purchased with fiat currency, and sold for fiat. There’s no option to withdraw them in crypto or trade between different currencies. You can just buy them and sell them for fiat.
If you are looking to buy and store crypto and sell it when the price rises, this is a great choice for you. If you are looking for more active trading i.e. buying and changing cryptocurrencies and withdrawing digital coins, PayPal still doesn’t allow for such transactions.You also cannot buy crypto and send it to another account when you use this e-wallet.
Now that you know all there is to know about trading BTC with PayPal, what will your decision be? Will you use this method for your crypto trading, or will you look for another option?