PayPal is one of a few popular mobiles and online payment platforms now allowing users in the US to buy, sell, and hold cryptocurrencies with as little as $1 invested. But if you're looking to add cryptocurrency to your portfolio, you should think carefully about which platform you use — and whether you should be investing in crypto at all. To cover more, let's find out more in this "How to add crypto to PayPal? and Which is better PayPal or Cryptocurrency exchange?
How to add Crypto to PayPal?
To buy crypto from PayPal, you'll need to set up an account. If you already have a PayPal account, all it takes to buy crypto is clicking a button that says “crypto” and choosing which coins you'd like to buy.
You can purchase four types of crypto on the PayPal app: Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. However, experts recommend sticking to Bitcoin and Ethereum if you're a new investor.
To complete your purchase, you'll need to have available funds, a linked debit card, or a linked bank account. You can spend as little as $1 or as much as $100,000 a week. Like many crypto exchanges, there's a fee for buying and selling crypto on PayPal, which varies depending on how much you buy.
You also have to verify your identity, fill out a W-9, and agree to the PayPal terms and conditions. If you decide to make a purchase with crypto, PayPal will automatically convert it into the US dollar at no additional cost.
PayPal vs Cryptocurrency exchange
The crypto you buy through PayPal is not the same as buying crypto on an exchange like Coinbase or Gemini. When you buy crypto from a traditional exchange, you have the option to transfer it to a wallet for secure storage or to someone else — a key distinction when it comes to full crypto ownership.
That's not the case with PayPal. You can't transfer crypto from your account to other accounts on or off PayPal, and you have to sell your crypto on PayPal to make a withdrawal, which you'll also be responsible for reporting on your tax return.
If you want full control over your coins, a cryptocurrency exchange may be a better choice. While they can be more complicated to navigate as a beginner, you'll have more flexibility with your coins and potentially pay fewer fees. You can use these exchanges to trade one crypto for another (like using Bitcoin to buy Ethereum) or buy crypto using regular currency, like the US dollar.
Still, PayPal can make sense for new investors who want to experiment with a small crypto balance on a familiar platform. Even for those well-versed in traditional investment options like stocks and index funds, crypto investing using exchanges can be complicated.
If you're a new investor with a few dollars to spare, PayPal can be a good place to start. Investing in a small portion of your portfolio in Bitcoin on a platform you already trust can make sense for beginners, especially if you don' t anticipate adding large amounts you might want more control over (like your own wallet storage) later.
