Paypal to Bitcoin Exchanges – Buying BTC With Paypal 101

How To Buy Bitcoins With Paypal

*Updated Summer 2021 – PayPal now offers bitcoin from directly within paypal and has plans to support the ability to move coins off of the paypal network (currently can only buy, spend and turn to $$$ but can not withdraw btc to your own wallet – this should change soon)

Paypal is slowly warming up their support for Bitcoin.

They currently allow their merchants to accept bitcoins for payment at their discretion.

In fact, Paypal partnered with Coinbase, the world’s largest and best-funded BTC exchange, in 2016 to ensure their merchants had access to bitcoin processing services and digital wallets.

But that doesn’t mean it’s easy to buy bitcoins using the money in your Paypal account.

It’s not “easy”.

Doing so can be a hassle. And it’s a hassle that’s been frustrating BTC fans for a long time.

It’s probably why you are here, right?

So, good news. I’ve got three legitimate Paypal-to-Bitcoin exchanges that allow you to buy BTC using the money sitting in your Paypal account.

Then I’ll explain why it’s difficult to purchase bitcoins using Paypal.

I’ll then present a few simple solutions that’ll help you to clear the obstacles if you still need even more options to turn paypal into bitcoin.

Top 3 Paypal-To-Bitcoin Exchanges

The good news is that you still have a few great options for turning money in your paypal account into bitcoin.

The bad news is that it does cost a bit more than buying bitcoin with a bank wire transfer at a major exchange.

1. LocalBitcoins

LocalBitcoins is the 800 lb. gorilla of the P2P bitcoin exchanges.

Buyers and sellers get together and hash out terms.

And because there’s a local “flavor” to the service, you can literally meet sellers at a local Starbucks or McDonald’s to finalize the transactions.

Or you can do the deal without ever meeting the seller (the most common) just using as the escrow to make sure both you and the person selling get paid.

A benefit is you can gain access to your newly-purchased bitcoins quickly.

Again, be willing to do a little due diligence to protect yourself. It’s no different than buying an iPod or laptop on eBay.

Know the seller.

Read my LocalBitcoins review here to learn more about this exchange.

2. Paxful

It works in the same manner as the next exchange called Paxful.

As with Paxful, using LocalBitcoins isn’t without risk, especially if you’re a seller. But as long as you work with legitimate sellers willing to accept Paypal, you should be safe.

Paxful is a peer-to-peer (P2P) bitcoin marketplace.

You can buy bitcoin with literally dozens upon dozens of different methods.

Paypal being one of them.

Of course, using the platform to buy bitcoins comes with pros and cons.

On the one hand, you’re dealing with sellers directly. That means you can use Paypal to purchase BTC as long as you can find a seller who accepts Paypal. Finding such sellers isn’t difficult; there are hundreds of them around the world who’ll gladly accept funds from your Paypal account.

On the other hand, you’re dealing with sellers directly.

That means there’s an ever-present risk of shenanigans.

So, it’s important to keep your guard up and do your due diligence.

To be clear, Paxful is a terrific bitcoin exchange.

Just be aware there are some bad actors out there. Know your seller.

3. Xcoins

Xcoins offers a system that is different than the others.

Instead of buying bitcoin directly, you get loaned bitcoin.

You pay off the loan with paypal.

Lenders loan you bitcoin. You pay off the loan with paypal.

Once the loan is paid, the bitcoin are yours.

It’s easy and fairly simple to do. Of course there are fee’s and expenses and a few hoops to jump through but the process is fairly painless overall.

You can learn more about Paxful in my review (coming soon).

4. Coinbase

Coinbase is one of the biggest, most reputable exchanges for buying and selling cryptocurrencies like Bitcoin. It’s like the Walmart of digital currency exchange.

USA residents can use sort of use PayPal on Coinbase to buy bitcoin with a little work. Sorry Canadians :(.

Unfortunately, Coinbase doesn’t allow you to directly buy bitcoins with Paypal.

But if you have a Paypal debit MasterCard, you’re in business.

Simply connect your Paypal debit card to your Coinbase account (you can do this in the “Payment Methods” section of Coinbase).

Keep in mind, Coinbase charges a 3.99% “convenience fee” on each transaction using this approach.

Note that if you’re selling BTC, you can deposit the resulting funds of each completed sale into your Paypal account. It just doesn’t work that simply in the opposite direction.

Eventually Coinbase plans to integrate directly with Paypal

* Read my Coinbase review here for more info on the largest USA exchange.

The Challenge: Why Buying Bitcoins With Paypal Is Difficult

Bitcoins are like cash, non-reversible.

Paypal is reversible.

Sellers take the risk of giving you bitcoin for paypal.

Therein lies the problem with buying them with Paypal.

Imagine this scenario…

Suppose you’re selling a brand new Playstation on eBay. Let’s also suppose that, for some reason, you’re selling it for cash.

A buyer contacts you and agrees to pay your selling price. He promises to send you the agreed-upon cash upon receipt of the Playstation. So you package and ship it to him.

Unfortunately, the cash never shows up.

You complain to eBay, but learn the buyer claims he never received the Playstation. eBay doesn’t have any way to disprove the claim, and is inclined to side with the buyer.

The result? You’re out the Playstation AND the cash.

Paypal is in a similar situation as eBay when it comes to Bitcoin transactions. A buyer can transfer an agreed-upon amount of cash to a seller in exchange for a agreed-upon amount of bitcoins.

But following this transaction, he can open a dispute with Paypal, claiming he never received the bitcoins.

Paypal can’t prove or disprove the claim because it’s not a BTC clearinghouse.

It’ll usually side with the buyer, resolving such disputes in the buyer’s favor. That means the seller has to assume a massive amount of risk with each transaction.

Paypal tries to minimize this risk, which is the main reason it’s so tough buy bitcoins using its service.

Notice I said “tough.” It’s not impossible. Far from it, in fact. Let’s cover a few workarounds.

More Ways To Buy Bitcoin With Paypal

Solution #1: Using VirWox

VirWox is an exchange platform. It allows you to trade cryptocurrencies (bitcoins, litecoins, etc.) using Linden dollars (SLL). This is the currency used in the virtual world Second Life.

No, I’m not making this up.

Essentially you buy currency for a video game with paypal and then sell that video game currency for bitcoin.

How To Use VirWox To Buy Bitcoins With Paypal

Using VirWox is simple, even though it’s a minor hassle.

Here’s how it works:

First, you’d open an account at VirWox. Then, you’d deposit funds into your Paypal account – enough funds to buy however many bitcoins you want at the prevailing market price.

Next, you’d purchase Linden dollars with the money in your Paypal account.

Once you possess Linden dollars, you’d then use them to purchase bitcoins.

Finally, once the bitcoins are in your account, you can transfer them to the wallet of your choice (GreenAddress, Electrum, the Trezor, etc.).

It’s like using one fiat currency (e.g. U.S. dollars) to buy another (e.g. pound sterling) at the airport, and then sticking the latter currency into the wallet in your back pocket.

You don’t need a Second Life account to make this process work. Also, note that you can create a VirWox account for free.

Advantages To Using VirWox

The biggest reason to use VirWox is that it’s easy. Sure, it’s a hassle, and it’d be much simpler to buy bitcoins with Paypal directly. But as I mentioned earlier, doing so is difficult because of the huge risk to sellers.

VirWox is a user-friendly solution.

Disadvantages To Using VirWox

There are two major downsides. First, expect to pay a premium. It’s like buying foreign currencies at the airport. You’re going to get gouged on fees.

Second, expect delays. The duration depends on the age of your VirWox account and when you made your first Paypal-to-VirWox deposit. If your account is brand new (Level 0), you’re only allowed to “clear” the equivalent of $117 per 24-hour period. Once your VirWox account is 10 days old (Level 1), you’ll be able to clear the equivalent of $156 per 24-hour period. A Level 4 account can clear up to $1,300 during the same time frame.

Solution #2: Using WirexApp

WirexApp used to be called E-coin. It provides bitcoin debit cards (virtual and physical) that can be linked to your Paypal account.

These cards serve as a bridge between your Paypal account and the Bitcoin exchange or marketplace of your choice.

How To Use WirexApp To Buy Bitcoins With Paypal

First, you’d need to register an account at Once you’ve done so, request a debit card. Keep in mind, a virtual card is faster, less expensive, and less maintenance than a physical card. But if you prefer a physical card, you can obtain one.

Once you have your debit card, attach it to your Paypal account. Note that Paypal will require that you verify it (don’t worry, it’s a fast and easy process).

Once your card has been verified, you can transfer money from your Paypal account to it. You can then use the money on your debit card to purchase bitcoins.

Advantages To Using WirexApp

The advantage to using WirexApp is the same advantage to using VirWox: it’s an easy way to use your Paypal account to buy bitcoins.

Another upside, one that’s particular to having a debit card at your disposal, is that you can use bitcoins at merchants who accept BTC for payment. It’s as easy as using a credit card.

Disadvantages To Using WirexApp

As with using VirWox, you’re going to pay fees. They’re somewhat lower than the ones imposed by VirWox, but they’ll still take a minor bite from each transaction.

Second, expect limits to be placed on your card. These limits vary according to whether your WirexApp account – and by extension your debit card – is verified or unverified.

With a verified account (and card), you can request up to five transactions per 24-hour period. The maximum single Paypal-to-WirexApp transaction value, and the maximum transaction value per 24-hour period, is $500, €500, or £400. Note there are no limits to the amount you can transfer from your debit card to buy bitcoins.

With an unverified account, you can only transfer $800, €800, or £800 per transaction per 24-hour period from your debit card to buy bitcoins.

Solution #3: Forex-Trading Platforms

Thus far, we’ve focused on solutions that make it easy to buy BTC with your Paypal account. But what if you’re a trader? That is, you’re not content with the occasional purchase. Instead, you’re interested in trading BTC for profit, like a currency trader.

If that’s the case, you’re better off using a forex solution like Plus 500 or AvaTrade. These are known as CFD (contract for difference) brokers.

Advantages To Using Forex-Trading Platforms

There are numerous CFD brokers who readily accept Paypal. That’s the upside. These brokers make it easy to use the money in your Paypal account to fund your trades.

Disadvantages To Using Forex-Trading Platforms

First, and this goes without saying, trading BTC is risky. Trading ANY type of currency comes with risks, but BTC is particularly risk because the price is often so volatile. So be wary.

Second, you’ll pay commissions on each transaction. The level of commission will vary from broker to broker. Some brokers – for example, AvaTrade – don’t charge a commission directly, but will expand the spread to compensate. So you’ll pay one way or another.

Third, you don’t actually take possession of bitcoins on these platforms. Rather, you make a profit or loss based on the CFDs.

If you’re an experienced trader, and you intend to trade BTC, definitely check out brokers like Plus 500 and AvaTrade. However, if you’re just interested in how to buy bitcoins with Paypal, there are much better (and more appropriate) solutions.

Final Thoughts On Paypal To Bitcoin Exchanges

There are numerous ways to buy bitcoins with Paypal.

Some methods are clearly easier than others while some come with lower fees than others.

Some come with greater risks.

The most important thing to realize is that you have options.

Personally, I prefer to use Coinbase, Paxful, and LocalBitcoins when I want to buy BTC with Paypal. If you’re careful in choosing sellers, you shouldn’t run into any problems.

You may have to pay a slightly-higher exchange rate or higher fees.

But in my opinion, that’s a small price to pay for the convenience and the ability to acquire bitcoins quickly using the money in your Paypal account!

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