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Buying Bitcoin with PayPal (Beginner’s Guide)

By: Ofir Beigel | Last updated: 8/16/20

Even though PayPal has been very favorable of Bitcoin in recent years, it’s still an issue to find credible places to buy bitcoins with PayPal in 2020. This is mainly due to chargeback issues (here’s a short video illustrating this). This post will cover tested methods that will allow you to overcome this issue.

How do I Buy Bitcoin with PayPal Summary

Ever since Virwox shut down its PayPal deposits in January 2020 it got really hard to obtain Bitcoins through a PayPal account. The two main methods that still allow you to buy Bitcoins with PayPal are eToro (for users who mainly wish to speculate on price and aren’t looking for access to the actual coins) and LocalBitcoins (for those who want to actually withdraw Bitcoins to their own wallet).

eToro
Fees:
Low
Overall rating:
4.5 Star Rating
LocalBitcoins
Fees:
High
Overall rating:
4.5 Star Rating
xCoins
Fees:
High
Overall rating:
3.5 Star Rating
Paxful
Fees:
High
Overall rating:
4.5 Star Rating

*eToro users: 75% of retail CFD accounts lose money. Your capital is at risk

If you want a more detailed explanation about each method keep on reading. Here’s what I’ll cover:

  1. Buying Bitcoins with PayPal using eToro
  2. Buying Bitcoins with PayPal using LocalBitcoins
  3. Buying Bitcoins with PayPal using xCoins
  4. Buying Bitcoins with PayPal using Paxful
  5. Frequently Asked Questions
  6. Conclusion

1. Buy Bitcoin with PayPal through eToro

Pros: Relatively low fees, a variety of payment methods accepted

Cons: Not available worldwide, withdrawing profits in crypto is complicated

The easiest way to buy Bitcoin with PayPal would be through eToro but only for a limited purpose. While the platform will allow you to buy bitcoins with PayPal, withdrawing them to your wallet will take an extensive amount of time and steps.

In other words, eToro is better suited to speculate on Bitcoin’s price rather than for buying the actual coin for using it. If you’re just looking to profit from price swings and don’t require the actual bitcoins, this is probably the easiest and cheapest way to go. If, however, you need the actual bitcoins to buy stuff or send them to another person, keep reading.

Keep in mind that if you use eToro to make money of speculation, you don’t actually need a Bitcoin wallet. You can read my full eToro review here.

IMPORTANT!  Cryptocurrencies can widely fluctuate in price and are not appropriate for all investors. Cryptocurrency trading is not supervised by any EU regulatory framework, your capital is at risk.

Visit eToro Read review

75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.


2. Buy Bitcoin with PayPal through LocalBitcoins

Pros: A wide variety of sellers from around the world

Cons: High fees, chance of getting scammed

LocalBitcoins, unlike eToro, is a marketplace where buyers and sellers connect directly. When you use LocalBitcoins, you’re dealing with an actual person, which means that the seller’s credibility is another thing to watch out for.

As for fees, sellers will usually charge a premium since they’re taking a big risk of buyer chargebacks. The upside is that you will usually get your bitcoins faster. You can read my full LocalBitcoins review here.

Visit LocalBitcoins     Read review    

How to Use LocalBitcoins

Step 1 – Enter your search parameters

The first step will be to go to LocalBitcoins and enter how many bitcoins you want to buy and from which country. Since LocalBitcoins was originally made for people to meet face to face, there’s no “worldwide” search, which is a shame. You have to go through each country, one at a time.

Step 2 – Choose your seller

On the next screen, you’ll see a list of available sellers, you can now browse them one by one.

localbitcoins user

Some of the things I’d check before trusting a seller are:

  • Feedback score
  • How many confirmed trades does this seller have?
  • How old is the account?
  • How many people trust this seller?
  • How many people blocked this seller?

In the end there’s no real measurement to help you evaluate how reliable a seller is. You will need to use common sense after reviewing his complete details.

Step 3 – Complete the trade

Once you’ve found your seller, you’ll be taken to the trade screen. There you’ll be able to see information about the user’s trade limits, location and payment window (How much time you have for sending funds and marking the payment done after you initiate a trade).

seller profile

It’s also super important to read the terms of trade for the specific seller located on the right side. Here’s an example:

terms of trade local bitcoins

Some sellers will require that you have an initial reputation in order to buy from them to avoid scams or fraud. This means that you might have to conduct some small transactions to build your reputation.

Once you went over all of the information and made sure it suits you, just enter how many bitcoins you want to buy and click “Send trade request.”trade request

It’s crucial to conduct all communications within LocalBitcoins and preferably use their escrow services (which are triggered automatically for all online sales). While this method is relatively fast it may take some time to gain enough reputation and find a seller.


3. Buy Bitcoin with PayPal through xCoins

Pros: Proven method that’s been around for a relatively long time

Cons: Unclear business model and high fees

xCoins.io (not to be confused with xCoins.com) describes itself as a Bitcoin lending service. Instead of selling you Bitcoins they are loaning you Bitcoins (to an extent). Whether this is actually a loan or a sale is somewhat ambiguous and can be left for interpretation. Here’s how it works:

You (the buyer), come to the site and say you want to “loan” some Bitcoins. After a short ID verification process you will be requested to deposit the USD equivalent of how much you want to borrow + credit card / Paypal processing fees + a fixed amount that acts as the interest rate on the loan.

Visit xCoins     Read review

How to Use xCoins

  1. Sign up to the site
  2. Choose the amount you want to buy
  3. Agree to the loan agreement (see image below)
  4. Verify your identity
  5. Make payment

Since this platform matches lenders with buyers, the fees are relatively high. You can read my full xCoins review here.

xcoins fees


4. Buy Bitcoin with PayPal through Paxful

Pros: Wide variety of sellers from around the world

Cons: High exchange rate, the chance of getting scammed

Paxful is the smaller, lesser-known version of LocalBitcoins. It’s a peer-to-peer marketplace that allows you to buy Bitcoin with almost anything (e.g., Skype credits, Amazon gift cards). The process of buying bitcoins at Paxful is pretty simple:

Visit paxful     Read review

How to Use Paxful

  1. Create an account.
  2. Choose a payment method for buying and the desired amount.
  3. Choose your seller. You can either choose manually or let Paxful decide who is the best seller for you.

Once the trade initiates, you will be sent to an online chat with the seller, where you can finalize the deal. The seller’s bitcoins will be sent into escrow, and once you mark that you’ve sent your payment, they will be released into your account. Keep in mind that if you don’t finalize the deal within a certain timeframe (usually 30 minutes), the deal will be automatically canceled.


5. Frequently Asked Questions

Can I Buy Bitcoin with Paypal on Coinbase?

No you can’t. Coinbase only allows you to sell Bitcoins and withdraw the balance to your Paypal account.

Can I buy any other crypto with PayPal?

You can use LocalMonero or LocalCryptos to buy Monero or Ethereum with PayPal however the same rules and downsides apply – you’ll probably pay high fees and it will be hard to find credible sellers.

I found an additional method not listed here, is it legit?

From time to time, I see many new sites that allow you to use PayPal for Bitcoin purchases. Personally, I’m very skeptical of such sites and advise you to treat them with caution. Reputation goes a long way when it comes to cryptocurrencies, and the methods I’ve described above have all been tried and tested by me.

Moreover, the companies that are described in this post have been around for at least three years and have proven they are here to stay. Having said that, feel free to list what you’ve found in the comment section below and we’ll give you our opinion of it.


6. Conclusion – Can I Use Paypal to Buy Bitcoin?

There’s still no easy process that allows you to buy actual Bitcoins (not price speculation) with PayPal. My personal suggestion is to use a different payment method if possible. If you have to use PayPal, the methods listed here will work, but get ready for some hefty fees.

Have you had any experience with buying Bitcoins with PayPal? If so, I’d love to hear about it in the comment section below.

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Epete Joel
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Epete Joel

Well I guess this is the best way

Farid
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Farid

Best description for PayPal to BTC. Thanks

Tina
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Tina

Paxful.com

Hassan
Guest
Hassan

Add recently operating local.bitcoin.com to the above list. I have done some trade on all of them including local.bitcoin.com and found the xCoind.io the best! In my ranking eToro is the worst option due to it’s complex deposit/ withdrawal and lack of liquidity but it has a lot more options than others and the very lovely UI.

Jimminy Cricket
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Jimminy Cricket

Did I miss something or were the “hefty fees” only referred to, but never quantified? How hefty are these fees? Surely that was worth including in an otherwise brilliant article.

john
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john

The reason coinbase doesn’t accept or “approve” of using credit cards or paypal is they all have transactional insurances.
Coinbase is running a HUGE scam and has been getting away with it.
When a company alters its web page after money is deposited BLOCKING withdrawals beyond 16 days with NO support responses about such inquiries is more than sufficient evidence for FRAUD. Avoid them.

john
Guest
john

hey hi
set up account at coinbase.com and linked my paypal account for purchases or money payments to overseas county. After that the coinbase account still wants a bank account or card to make a first (and only) purchase? then it informs me after selecting bitcoin that I must have $6000 USD in the account. NO chance I’m putting that much out into cyberspace to effect a single purchase. How can I set up a small $45 usd BTC purchase without all that?.

TreyAllOver
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TreyAllOver

I’m surprised that xcoins.io wasn’t even mentioned. The fees are high but it’s the fastest paypal to bitcoin service out there.

Jrisn
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Jrisn

Buy BTC with PayPal on SNBITCO, its spossible

Zzzzz
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Zzzzz

this article is crap

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