Curious about trading cryptocurrencies but you don’t understand blockchain and you know nothing about crypto exchanges like Binance? PayPal could be your perfect alternative crypto wallet for altcoins.
I wrote some time ago about how I’m not really a cryptocurrency trader despite trading many more markets and financial instruments. Now that PayPal has made it easy to buy, hold, and sell several popular crypto coins, I might be tempted. So might you.
How to Trade Crypto with PayPal
For as long as I can remember, it’s been possible to hold multiple traditional (fiat) currencies within a PayPal account. For example, you can have a British pound (GBP) balance and a separate US dollar balance (USD), and easily transfer funds between the two.
Now you can do the same thing for the Bitcoin, Bitcoin Cash, Etherium, and Litecoin digital currencies. It raises the possibility of buying bitcoins or the other coins when you think their prices are low, then selling them when you think the prices have peaked. Buy low, sell high, which is what trading is all about, and in a way that almost anyone can understand.
Despite PayPal’s prowess as a payment processor, this facility is actually more suited to speculation than to making purchases with virtual currencies. You see, you can’t buy goods or services denominated in bitcoins directly via PayPal because you have to convert the currency first.
Other Ways to Trade Crypto via a Broker
Crypto trading via PayPal has some limitations. For one thing, you can’t sell short, which means you can’t profit from a cryptocurrency’s falling price unless you’re already holding it (so that you can sell it). For another thing, you can’t use automated order types like limit orders and stop orders to buy and sell bitcoins or other coins automatically when their prices hit certain levels.
To do both of these things, you need to trade cryptocurrencies via an online broker instead, so you might like to look at one of these brokers:
eToro is one of the world's leading multi-asset trading platforms offering some of the lowest commission and fee rates in the industry. It's social copy trading features make it a great choice for those getting started.
Financial company driven by technology and offering all-in-one self-directed investment platform that provides excellent user experience.
To trade crypto via a broker, you’ll probably have to get yourself classified as a professional trader rather than a retail trader, but it’s not as onerous as it sounds if you’ve got a bit of money and you’ve been trading for a while (or working in financial services).