PayPal can be an attractive way of buying Ethereum if you’re unable to make bank transfers in your country of residence or you don’t want to pay the hefty bank fees that are applied when converting currencies.
Unfortunately, it is incredibly difficult to find cryptocurrency exchanges that accept PayPal when buying any form of digital currency.
VirWoX, the crypto exchange platform, was a firm favourite among those wishing to buy crypto with PayPal, but it was recently revealed it is no longer accepting PayPal for deposits or withdrawals. And although Coinbase lets users sell Bitcoin and have their US dollars deposited to a PayPal wallet, it doesn’t let you buy digital currency using your PayPal account.
It has been suggested that PayPal is wary of cryptocurrencies following a series of chargeback cases created by scammers, who bought Bitcoin using PayPal and then claimed they didn’t receive anything. Since Bitcoins are untraceable, there is no way of checking whether such claims are true or not.
Despite this, it is still possible to buy Ethereum with PayPal. You just need to be willing to explore some of the more “creative” options out there.
The two most viable methods to buy Ethereum with PayPal are via a contracts for difference (CFD) broker or a peer-to-peer exchange.
Buying Ethereum using a CFD broker
A convenient, secure, and fast way to buy Ethereum with PayPal is to use a CFD broker such as eToro. Marketed as a “social trading network”, eToro’s core purpose is to let people mimic the transactions of more experienced traders. It started supporting cryptocurrencies in 2017.
eToro users can either buy one of the 14 crypto-assets listed on the platform or trade against their prices using CFDs. A CFD is a form of derivative trading which lets you take a position on a financial instrument without actually owning it.
Buying Ethereum with PayPal on eToro is pretty straightforward. You create an account, submit how much money you wish to deposit, and select PayPal as your deposit method. Once the transaction is complete, you can then buy Ethereum.
A major advantage of eToro is it is regulated in three jurisdictions, including the UK, thus offering peace of mind for investors.
Similar CFD platforms to consider are Plus500 and Investous.
Buying Ethereum using a peer-to-peer exchange
A peer-to-peer exchange such as localethereum.com lets individuals anonymously connect with one another to buy and sell Ethereum. It’s a bit like eBay for Ethereum. Registering is free and you can trade in any country in the world.
Once you’ve registered at localethereum.com, you need to select PayPal as your payment method. Your next step is to find an appropriate seller by browsing their location, the price they’re selling Ethereum for, how much they’re willing to sell, and how many trades they’ve previously completed.
After choosing a seller, you can set how much Ethereum you want to buy. You’ll receive details of the PayPal address to send your funds to.
An alternative peer-to-peer exchange, which has been around a lot longer, is LocalBitcoins. If you find someone willing to sell their Bitcoins in return for a PayPal payment, you could then convert your Bitcoins to Ethereum on an exchange platform like Changelly.
An advantage of using peer-to-peer exchanges is you don’t have to go through lots of identity verification procedures before you can use the exchange.
However, unlike traditional exchanges, you’re at the mercy of the seller responding to your request. Sellers on localethereum.com who have a lightning bolt icon are more likely to respond quickly.
The most important thing is to ensure you find a reputable seller, as the risk of fraud on peer-to-peer exchanges is very high. Have a look at the seller’s trading history and user feedback before you agree to a deal.
PayPal’s strict view towards cryptocurrencies has made it more difficult to buy Ethereum with PayPal, but it is still possible if you’re willing to use alternative exchanges. Just make sure you’ve done your due diligence – whether that’s of the platform itself and/or the individual seller – before handing over your funds.
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