Buying bitcoin directly using PayPal is against PP’s terms of service. But it is possible to trade Bitcoin using PayPal through the use of CFDs.
Read on to find out more about trading Bitcoin with PayPal and how to get started.
Trading Bitcoin on eToro
eToro is the worlds largest social trading platform with over 5 million traders. On eToro, you can trade stocks, forex commodities etc. eToro also recently added support for cryptocurrency trading including Bitcoin.
To trade Bitcoin on eToro, you sign up for the platform, deposit using PayPal (or another method such as credit card) and then you can simply open a long position on Bitcoin. On eToro, you aren’t trading CFDs. You are actually trading real cryptocurrency. However, eToro isn’t a wallet – you need to cash out in fiat currency not cryptocurrency.
eToro is probably the best option for beginners. They offer a free demo account, free copy trading (meaning you can copy the trades of more experienced traders automatically), and have an easy to use interface.
There is a slightly higher first time deposit compared to other platforms. The minimum first deposit is $500, however after the first deposit you can top up your account with smaller amounts.
Trading Bitcoin on Plus500
Plus500 is a popular CFD trading platform that accepts PayPal payments. Unlike eToro, you are trading CFDs, so you never take ownership of the underlying asset. Instead you profit based on how much the price rises or falls.
One thing to watch out for on Plus500 is the leverage. On eToro you can trade Bitcoin without leverage, but on Plus500 the leverage is 1:20. This means if you open a position with $5, you actually control $100 of capital. Leverage means your profits are amplified, but it also means your losses can be too.
Because Plus500 uses leverage, I recommend this platform for more experienced traders. Of course, if you manage to jump in at the right time, and bitcoin has another bull run, you could make a small fortune.
Remember with both these options for purchasing Bitcoin with PayPal, you never actually take control of the Bitcoin in your own wallet. So they may not be best for long term holding. For that you may need to forgo paypal and instead buy bitcoin using a credit card or another method.