Nowadays, bitcoin is in trend. Everyone knows about the high-end benefits of investing in this cryptocurrency, and that is why they don’t want to miss out on an opportunity to get their hands on this digital currency. When it comes to investing in bitcoin, there are many options available to the users. They can choose the one they like, such as the decentralized exchange, centralized bitcoin exchange, or even the bitcoin wallet. But the thing is that the regular retail investors might suffer from more risk aversion because they don’t know much about the technology behind this digital currency.

On the other hand, PayPal makes the purchasing of bitcoin effortless. Therefore, you should know that buying bitcoin with the help of PayPal is very simple for most of the users who are living in the countries where it is available. But at the same time, there are some serious risks involved in buying bitcoin from PayPal, which the users must beware of. If you want to know more about it, then you should land on the platform.

Users have to go through an approval process that is similar to the bitcoin exchange.

The PayPal users who are looking forward to buying bitcoin from the platform are required to verify their identity in the first place. In this verification process, the users must provide some of their necessary documents, such as passports, to qualify for buying bitcoin. But the thing is that most bitcoin exchanges also make their users go through this very similar verification process for buying bitcoin. So, there are not many benefits in buying bitcoin from PayPal if you have to put the same efforts into buying it from the bitcoin exchange.

Users don’t hold their bitcoin directly.

Another disadvantage of buying bitcoin using PayPal is that the users are not holding their bitcoin directly. Instead, your digital coins are kept under the custodianship of the PayPal company. So, the users of PayPal only indirectly own bitcoin. But at the same time, the users are also not allowed to take off their bitcoin from the platform and keep them in the bitcoin wallet, which means that they do not own the bitcoin. The PayPal company also doesn’t provide any digital wallet facility to the users or even the wallet address. The absence of the private keys means that the owners of the bitcoin holding on PayPal are still holding on to their fiat currency, not crypto. Moreover, when it comes to cashing out of bitcoin, the only option people have is fiat currency.

Users might have to pay fewer fees when using bitcoin exchanges.

You need to know that PayPal is infamous because it charges very high fees. And the fees which it charges for bitcoin are also not an exception to it. In this situation, there are a lot of bitcoin exchanges that charge very reasonable fees compared to the PayPal platform. The people living in the country where they can quickly deposit the fiat currency in the exchange wallet directly are fortunate. It means that rules allow those users to purchase bitcoin and keep it in their wallets. When users buy bitcoin from the bitcoin exchange, they have complete control over their assets, unlike PayPal.

Limited selection

In the present times, there are thousands of cryptocurrencies available in the market. However, you need to know that among these cryptocurrencies, most of them are small-cap coins. The thing is that the microcaps or the small-cap coins allow the users to get the most significant gains because the potential of the small market capital coins is enormous. However, it would help if you kept in mind that the more significant profit potential also comes with higher risks, and this means that the small caps coin offers the users the most significant risk.

This risk aversion is why the PayPal platform only lets users buy the four most popular digital currencies: bitcoin, ether, Litecoin, and bitcoin cash. These digital coins are very well-known cryptocurrencies that exist in bitcoin. Since these coins are already established in the market, which means that they are mature by now, this is the reason that these four digital coins are less vulnerable to the high volatile price fluctuations.