Risks of Selling Bitcoin through PayPal

It is possible to buy bitcoin with Paypal, in indirect way. Most sellers are reluctant to offer a bitcoin-through-PayPal alternative, because they might never see their money.

Bitcoin buyers can get a chargeback. They may use their PayPal accounts, they get their bitcoins, then they falsely claim to PayPal or their credit card company that they did not receive any bitcoins, and PayPal stands with the fraudulent bitcoin buyer. This is why most established bitcoin exchanges do not support funding via PayPal.

Bitcoin sellers face other risks, too. Users can hack accounts and misuse them; when PayPal notices this, they will perform a chargeback. Moreover, PayPal and bitcoin are competing virtual currencies, so some bitcoin users assume that PayPal frowns upon bitcoin. According to them, if PayPal notices that you deal with bitcoins, they will delete your PayPal account and freeze your balance. However, in September 2014, PayPal announced that it would cooperate with three major bitcoin player, Coinbase, BitPay, and GoCoin. These days, a PayPal web app, PayPal Payments Hub, allows you to add bitcoin payments.

Virtual World Exchange: Buy Bitcoin with PayPal

You can buy bitcoin with PayPal through an intermediary, but it costs more than simpler transactions. Your best choice is Virtual World Exchange, where you can create a free account. You can buy Second Life Lindens at the Virtual World Exchange via PayPal. Second Life Linden is another virtual currency, one that PayPal accepts. Once you have bought SLL, you can exchange it for Bitcoin. It is a fast solution, but the transaction fees are higher, about 6 percent.

Once you have your bitcoins, transfer them to your wallet.

If you want to leverage the fast changing price of bitcoin, you can exchange CFD on bitcoin through PayPal on websites like AvaTrade and Plus500. However, consider that online exchange is a matter of security. This option is for expert btctraders.


LocalBitcoins is another intermediary. It is an exchange where you can sell or buy bitcoin locally. You can trade your bitcoins for traditional currency (USD, GBP or EUR), or you can use it for online payments. If you want to buy bitcoin with PayPal, you have to find someone who is willing to sell bitcoin. You are supposed to meet the seller in person. The site features the reputation of sellers; make sure that you select sellers with great reputation.