How to Buy Crypto with Venmo

As you may know, Venmo is owned by PayPal, which made waves in the cryptocurrency community in 2020 when it announced it would allow users to buy and sell cryptocurrency directly on its platform. In April 2021, PayPal announced that it would also offer cryptocurrency buying and selling on Venmo. So, the easiest way to buy Bitcoin with Venmo is simply to buy it directly on the Venmo platform. This is a very safe way of purchasing cryptocurrency, as Venmo and PayPal’s crypto features are handled by Paxos, which is one of the most reputable companies in the cryptocurrency industry.

Can I Buy Bitcoin with Venmo?

Yes, American users can buy seven cryptocurrencies, including Bitcoin, directly within the Venmo app. After funding your Venmo account, you can instantly purchase cryptocurrency starting from just $1. Unfortunately, the platform is not regulated by the relevant financial authorities in the U.S. and charges significant fees starting at 2.2%. While Venmo supports several cryptocurrencies, it does not support Tether or BNB Coin. Investors seeking a more diverse selection of digital assets and lower overall costs can transfer funds from Venmo to U.S.-regulated crypto exchanges authorized by the Financial Crimes Enforcement Network (FinCEN), ensuring compliance with U.S. financial laws.

Is it safe to buy and sell cryptocurrency on Venmo?

Cryptocurrency is risky since it isn’t regulated like a traditional asset, and its price is volatile. But if you’ve been looking for a way to dip your toes, this isn’t the worst place to start. The four cryptocurrencies available to Venmo users are among the safest, says Hanna Halaburda, an associate professor at NYU Stern School of Business. It’s more expensive for hackers to attack the underlying blockchain technology of these types of cryptocurrencies, making them more secure. The platform also matters. Cryptocurrency holders have been burned in the past thanks to unregulated exchanges.

How to Buy Crypto with Venmo

While Venmo lets you directly buy Bitcoin, Ethereum, Litecoin, and Bitcoin Cash within its app, investors looking to explore a broader set of digital currencies can easily transfer funds to FinCEN-regulated crypto exchanges.

Here are the steps to buying your Bitcoin:

• Open the Venmo app and go to “Crypto.”
• Choose “Bitcoin (BTC)” on the cryptocurrency list. You will see the current exchange value of Bitcoin on this page.
• Click “Buy” at the bottom of the page.
• Enter the dollar value of the Bitcoin you want to buy and click “Review.” Then, you can confirm your transaction details, including bank account, transaction fee, and exchange rate.
• Venmo will provide you with the breakdown of the amount of Bitcoin you want to buy, including other associated fees.
• Click “Buy” to complete your Bitcoin purchase with Venmo.

What are the fees to buy Bitcoin on Venmo?

If you’re using the Venmo platform to buy Bitcoin, you won’t be directly paying a transaction fee. However, Venmo does charge a spread of about 0.50%, which is, in practice, the same as a fee for the end user. A 0.50% for purchasing cryptocurrency with fiat currency is certainly not an exorbitant fee, but there are cheaper alternatives available to investors if you want to be as efficient with your money as possible. For example, if you deposit USD from your bank account to the Xbanka cryptocurrency exchange and use it to buy BTC using the BTC/USD pair, the fee is only 0.16% if you use a limit order, or 0.26% if you use a market order.

Alternative Crypto Exchanges for Venmo Users

For Venmo users looking to expand beyond the cryptocurrencies offered directly within the app, transferring funds to regulated crypto exchanges provides additional opportunities. Below are three licensed platforms ideal for investors seeking broader crypto choices:

• Binance.US: Fully compliant with FinCEN regulations, Binance.US grants access to more than 150 cryptocurrencies. The exchange stands apart for its low trading fees, which begin at only 0.1%, robust market depth, and sophisticated trading interfaces.
• Coinbase: Headquartered in San Francisco, Coinbase is registered as a Money Services Business with FinCEN. It offers access to over 250 cryptocurrencies, charging roughly 0.6% per transaction.
• Gemini: Gemini operates under strict oversight from the New York State Department of Financial Services (NYDFS), providing strong regulatory compliance and high security standards. Users can trade more than 100 cryptocurrencies with fees starting at 1.49%.

Challenges Of Buying Bitcoin With Venmo

1. Lack Of Purchase Protection For Bitcoin

While Venmo does not extend purchase protection to crypto assets like Bitcoin and Ethereum, its users are vulnerable to the price fluctuations associated with crypto trading. A Bitcoin purchase is also irreversible on the payment app. Hence, there is a need to be cautious with your buying decision.

2. Bitcoin Transfers Are Limited To Venmo

You can not move your Bitcoin and other assets from Venmo to non-custodial wallets, personal accounts, or other platforms. This is a limitation for people who prefer to store their Bitcoin in digital wallets or explore other digital trading platforms.

What Are The Fees Of Buying Bitcoin On Venmo?

The fees for purchasing Bitcoin depend on the amount of BTC and other fees during the transaction. These fees are the spread between the market price from Venmo’s trading service provider, US dollars, to the crypto exchange rate, and other transaction fees associated with a Bitcoin purchase. You can view these rates during your transaction on Venmo. Its spread is about 0.5%, which varies with market conditions. However, the overall fee of buying Bitcoin and other crypto assets on Venmo is about 2%, making the platform expensive.

Conclusion

Venmo provides a fast and convenient way to buy Bitcoin, an alternative to popular exchanges. However, its high fees and lack of purchase protection for Bitcoin and other crypto assets are significant concerns in considering this platform. If you’re seeking lower costs, a wider range of cryptocurrencies, and greater transparency, consider transferring your Venmo balance to these regulated exchanges, ensuring both security and compliance in your crypto trading journey.

FAQ

1. Does Venmo sell gift cards?

They can be redeemed within the Venmo app, instantly adding to your available balance. Unlike traditional gift cards tied to specific retailers, the Venmo gift card offers unmatched flexibility. Use it to recharge Venmo, fund purchases made with your Venmo prepaid card, or transfer money to friends and family.

2. Can I send Bitcoin from Venmo to my wallet?

If you’ve bought crypto on Venmo, you can transfer that crypto to other Venmo users, PayPal users, or external crypto wallets.

3. How do I send a gift through Venmo?

You can make any payment feel like a present with Venmo’s gift wrap options. When you’re sending a payment in the app, tap the Gift button and select Cash to find the wrap that’s right for you.

4. What’s the BTC limit on Venmo?

You are limited to $20,000 in cryptocurrency purchases per week. There is also a limit of $50,000 in cryptocurrency purchases in 12 months. You are also limited to $25,000 per week in crypto transfers. Learn more about other transaction limits on Venmo.

5. How can I buy BTC from Venmo?

Go to the crypto section. Once your account is ready, open the Venmo app and tap the “Crypto” tab at the bottom. Here, you’ll find the available digital currencies, including Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.

6. How long does a Venmo Bitcoin transfer take?

Crypto transfers to other Venmo users happen right away. If you are sending crypto to an external wallet, it can vary from a few minutes to a few hours, depending on the blockchain used and network congestion – the app will give you an estimated completion time when you initiate the transfer