Can I exchange cryptocurrencies with PayPal

Comparison portal

the essentials in brief

  • There are many different trading venues on the Internet where investors can buy bitcoins.
  • The individual crypto exchanges and other trading venues for digital assets have advantages and disadvantages.
  • Recommended brokers for crypto trading: Etoro, Justtrade, Bitwala.

A Bitcoin cost around eight US cents in July 2010 - more than ten years later, the price is over 60,000 US dollars. In other words: Back then, investors couldn't even buy a piece of chewing gum with the value of a Bitcoin, today there is a mid-range car for that.

Similar to the stock market, the market for digital currencies also experienced an extremely volatile year 2020. Central banks bought bonds worth billions of dollars and the state launched economic stimulus packages on an unprecedented scale: Many investors feared currency devaluation and were therefore looking for alternative investment opportunities.

Digital currencies such as Bitcoin are future-proof and therefore also a promising investment. Just recently, the renowned online payment service PayPal announced that American users will be able to use cryptocurrencies in the coming year.

If you want to buy crypto currencies, you can get them at crypto exchanges. Although the market often still lacks the necessary state regulations and the scene is generally not considered to be trustworthy, there are also reputable providers.

What is a crypto exchange?

A crypto exchange is a digital trading platform on which crypto currencies can be bought, sold and exchanged: In the sense of the classic exchange, the price of a coin is based on the principle of supply and demand.

Buyers have two options for purchasing cryptocurrencies: either as a direct purchase from the provider - or as a transaction between buyer and seller.

When buying directly, investors buy Bitcoin and Co. directly from the platform provider. This is uncomplicated and quick - but the costs are usually higher: providers buy the coins in advance and have to keep them in stock at their own risk.

In the alternative, the sales contract between two private individuals, the platform only serves as an intermediary. The operator then retains a certain percentage of fees for this service. An example of such a marketplace is bitcoin.de.

Annotation: If you want to buy your own crypto currencies, you should take care of the subsequent storage beforehand. Investors should purchase or set up an external cold wallet on which they can store their coins after buying: This ensures the necessary security.

Find the right exchange

The different providers have advantages and disadvantages. The conditions and typical criteria such as user-friendliness, payment options or security are important. In order to find the right exchange, investors should have a basic understanding of the most important elements when trading cryptocurrencies and pay attention to details when making a selection.

Platforms on which traders can trade cryptocurrencies for fiat money are advantageous. These are currencies like the euro or the US dollar. If a platform accepts official means of payment, the often tedious exchange of a crypto currency into fiat money is no longer necessary.

Some providers do not have the option to trade in euros or US dollars - then traders can only exchange crypto currencies with one another.

For example, investors can use the Coinbase platform to buy common cryptocurrencies such as Bitcoin or Ethereum in order to then trade other coins on exchanges without fiat money.

So it depends on how exactly investors want to invest in the currencies so that the stock market suits them. We present the conditions of some platforms.

Etoro in detail

The multi-asset platform Etoro has been around since 2007. The main business at the time was stocks - the provider has only been able to trade crypto currencies since 2017. There are currently 16 different coins that can be bought and sold there.

After registration and successful verification, customers can transfer money to their account via credit card, Sepa transfer, PayPal and other payment methods. Etoro converts the deposited amount into US dollars for a fee. For a Sepa transfer from euros to US dollars, for example, this is 50 pips. A pip is the last decimal place mentioned.

fees

There are no fees for opening and maintaining an account. The amount of the trading fees depends on the respective coin: When trading Bitcoins, the fee for the spread is 0.75 percent, for Ethereum it is 1.9 percent.

Etoro also charges a fee for the transfer of crypto currencies, as well as for inactivity from the twelfth month. A full overview of all fees can be found here.

  • 19 cryptocurrencies - new since May 2021: Dogecoin
  • Payment methods: including credit card, SEPA transfer, PayPal
  • Security: 2FA, SSL, deposit protection € 20,000
  • Important: Cryptoassets are highly volatile, unregulated investment products (your capital is at risk).

service

The Etoro website is entirely in German. A help center answers the most important questions and customer service can be reached via a contact form, live chat or by phone.

Etoro offers users the option of a personal wallet - as already mentioned, there is a fee for the transfer of the coins. In addition, customers can also trade via the Etoro app.

security

Etoro uses two-factor authentication and the website is protected with SSL encryption. The operator's license is subject to European regulations, as the headquarters are in Cyprus.

According to Etoro, the customers' funds are in tier 1 banks: These have a particularly high risk-bearing capacity. A deposit insurance exists up to 20,000 euros.

miscellaneous

In addition to cryptocurrencies, Etoro also offers stocks, commodities and CFD trading. It is also known for its social trading model: customers can copy the investment strategies of other users.

Justtrade in detail

Since October 2020, Justtrade has been offering trading in stocks, ETFs and derivatives as well as trading in digital currencies. In total, customers of the broker can buy and sell five crypto values: Bitcoin, Bitcoin Cash, Ethereum, Litecoin and Ripple. According to the company, more are to follow.

To open a depot, new customers need the Justtrade app. After you have entered some personal information, you have to legitimize yourself via videoident. Justtrade uses the ID now procedure for this. If everything went well, the Sutor Bank opens a deposit and a clearing account. Customers can deposit a credit via bank transfer.

fees

In contrast to investments in securities, trading in crypto currencies at Justtrade is not free. The online broker requires a minimum spread of 0.3 percent for every purchase and sale. The minimum order volume on cryptocurrencies is 50 euros.

Important: Cryptocurrencies that investors buy from Justtrade cannot be transferred to a separate wallet. In other words, they are only suitable for speculation, investors cannot pay with them.

Otherwise Justtrade hardly demands any additional fees. However, there is a negative interest rate of 0.5 percent per year for the credit on the clearing account.

  • EUR 0.00 custody account fees
  • 0.00 order costs
  • Minimum spread 0.3%
  • 5 cryptocurrencies

service

As is usual with so-called neobrokers, the service is very reduced. There are quick guides to help beginners with trading. However, there is no specific information on cryptoassets.

The operation of the platform is intuitive. Users can switch between securities and crypto trading within seconds. You don't necessarily have to use the app, the platform can also be used via the browser.

There are negative points for customer service, which can only be reached via text message or email.

security

Justtrade's trading partner is Sutor Bank. It sells the crypto assets to investors and also buys them back. The von der Heydt bank takes care of their safekeeping. The customers' coins are stored separately from the bank's holdings and are therefore also protected in the event of bankruptcy. In addition, the bank claims that all crypto assets have been insured against theft.

  • EUR 0.00 custody account fees
  • 0.00 order costs
  • Minimum spread 0.3%
  • 5 cryptocurrencies

Scalable Capital: Bitcoin, Etherum and Litecoin via ETPs and ETCs

The Munich-based company Scalable Capital introduced trading in cryptocurrencies this year. In addition to traditional financial products such as stocks and ETFs, investors can invest in digital currencies via ETPs. ETPs stands for Exchange-Traded-Product - cryptocurrencies are therefore traded in the form of securities and not the coin as such. Scalable Capital currently offers ETPs for Bitcoin, Bitcoin Cash and Ethereum. The fintech from Munich has an ETC (Exchange Traded Commodities) in its portfolio for Litecoin.

Cryptos can be traded like ETFs

Trading cryptocurrencies works on the same principle as stocks and ETFs. Scalable Capital customers can purchase crypto ETPs via the Gettex and Xetra trading venues. Both one-time purchases and savings plans are possible. Usually, investors benefit from a positive performance of the respective crypto currency - however, one of the ETPs also allows you to bet on falling prices. Only three of the currently available ETPs can send either Bitcoin, Ethereum or Litecoin.

Good to know: Cryptocurrencies are usually taxed up to 45 percent after income tax - unless investors hold the coins for more than a year. However, because ETPs are securities, they are subject to capital gains tax, which is only 25 percent. This leaves more of the return.

Account opening

Opening an account with Scalable Capital usually only takes a few minutes. New customers have to choose one of three subscription models. Depending on which variant you choose, the price structure changes:

  • The free broker is free, but investors pay EUR 0.99 per trade.
  • The prime broker, on the other hand, costs 35.88 euros a year, but there are no costs for purchases and sales on the Gettex trading platform.
  • With Prime Broker flex, customers can flexibly cancel their subscription.

Those who have made a decision then fill out an application form, make an initial deposit and identify themselves via video or PostIdent. The account opening is now complete.

fees

Trading is free with the Scalable Prime Broker. However, there is a spread for crypto ETPs that is usually between 0.07 and 0.34 percent. In addition, the issuers charge an administration fee on the ETP. The costs for this amount to a further 1 to 2.5 percent annually. One-time purchases on Gettex require a minimum turnover of 250 euros. Savings plans start with a minimum savings rate of 25 euros. Trading on Xetra is more expensive with an additional EUR 3.99 order fee and a 0.01 percent trading venue fee. There is no minimum order volume for this.

service

Scalable Capital's services meet the most important standards. An extensive FAQ area helps with questions that arise. If something remains unanswered, customers can use a telephone hotline and even a live chat. There is also a regular newsletter, webinars and automated ETF asset management that is subject to a fee.

security

Depending on the issuer, the coins are deposited with regulated depositaries and in some cases even deliverable. In addition, some ETPs are insured against theft by hackers; customers can read this information for the respective product. Scalable Capital also cooperates with the German partner bank Baader Bank, which, in addition to the statutory deposit protection of 100,000 euros, is also part of the voluntary deposit protection of private banks.

  • 4 cryptocurrencies tradable as ETP / ETC
  • Minimum order via Gettex: 250 euros
  • Securities savings plan from 25 euros
  • Cooperation with Baader Bank AG

Binance in detail

Binance is the largest digital trading platform in the world based in Malta. It offers over 150 coins for sale. For a long time it was not possible to trade euros on Binance. In the meantime, however, a few of the coins on offer can be exchanged directly for euros: namely Bitcoin, Ethereum, Binance Coin, Ripple and Swipe. Binance requires verification to be able to trade fiat money.

fees

The deposit in euros via bank transfer is free of charge, not by credit card: Binance charges 1.8 percent fees here. The general trading fee is 0.1 percent per purchase or sale of the traded turnover.

service

The service convinces with a German website - that is not a matter of course, since most crypto exchanges have an international seat. Binance also offers an app for iOS and Android devices: This makes it possible to trade on the go. The trading platform can also be accessed via the desktop.

security

In July, Binance announced that it would be cooperating with the German financial institution CM-Equity. The partnership gives investors the certainty that Binance is backed by a company regulated by the Federal Financial Supervisory Authority (Bafin).

Binance provides SSL encryption for using the platform. In addition, the digital trading exchange shows all previous log-in attempts on its home page.

In addition to the password, two-factor authentication provides additional protection. Otherwise there are safety instructions and tips on how investors can best protect themselves and their coins.

  • Trade: Over 150 coins, futures and derivatives
  • Deposit via SEPA transfer free of charge
  • Trading fee: 0.1 percent
  • Security: 2FA, SSL, Binance Trust Wallet, Anti-phishing Code, Address Management
  • iOS & Android app

miscellaneous

Binance also offers numerous other features: A learning center should make it easier for newcomers to start trading with crypto currencies, the Trust Wallet is suitable for storing coins and the Binance Charity Fund supports non-profit organizations.

Coinbase in detail

Coinbase is one of the oldest and most popular trading platforms for digital currencies, headquartered in the USA. There are now 34 coins available for trading on Coinbase - for a long time the provider limited itself to the largest cryptocurrencies.

A few steps are necessary for registration and verification, for example uploading a suitable identification document. In order to be able to buy the first coins, users have to transfer fiat money to their Coinbase account: This can be done either via bank transfer or credit card. Paypal can also be used for withdrawals.

fees

There are no fees for a deposit on Coinbase - the provider imposes a fee of 0.15 euros on withdrawals. The fees for buying and selling are 1.49 percent of the amount traded. If you make an immediate purchase using a credit card, you have to pay a fee of 3.99 percent.

service

As with Binance, the main content of the website is also available in German with Coinbase. The platform also offers an app that is compatible with Android and iOS. In addition, customers can use a personal Coinbase wallet, which is accessible via an app. This means that traders can access their digital currencies anytime, anywhere.

security

In order to guarantee the security of the digital data, Coinbase stores 98 percent of the cryptocurrencies in an offline memory: This protects the data from hacker attacks. The importance of such storage is shown by the case of the crypto exchange Coincheck from 2018. Unknown stolen crypto assets worth 530 million dollars in an attack.

In turn, the money that is in circulation online at Coinbase is protected by insurance. However, if the responsibility for the data theft lies with the user, Coinbase will not be responsible for the damage.

User bank information is secured using AES-256 encryption. The two-factor authentication also protects against unauthorized access by third parties.

  • Fees: 1.49% on the total amount
  • Spread: 0.50
  • Regulation: FinCEN

miscellaneous

Numerous large investors are involved in Coinbase, including Facebook and Twitter, but also companies from the financial sector such as Andreessen Horowitz, Tiger Global or Spark Capital.

Boerse Stuttgart Digital Exchange (BSDEX) in detail

Germany's first regulated trading platform for digital assets has been accessible to the general public since December 2019: The Digital Exchange of the Stuttgart Stock Exchange.The cryptocurrencies Bitcoin, Ethereum, Litecoin and Ripple are currently available there.

Buying and selling against euros is free of charge. Deposits are currently only possible with a Sepa transfer.

The verification for the successful registration takes place via IDnow. When making a video call, the customer must show a valid identification document. This procedure requires a camera, microphone, and a good internet connection.

fees

BSDEX advertises with low fees. In fact, the provider does not charge any fee for account management or for depositing or withdrawing fiat money or digital money. Fees apply exclusively to the individual orders - the trading platform for digital assets differentiates between taker orders and maker orders.

The trader executes taker orders immediately: The fees amount to 0.2 percent of the transaction volume. A maker order is not placed immediately, it only ends up in the order book and traders can change it later. Their volume is limited at auctions. The fees are 0.35 percent of the transaction amount.

service

With the German provider, the content of the website is also in German - but there is also an English version. The website has a very extensive FAQ area that leaves almost no questions unanswered. However, there is no app of its own yet.

Although the parent company Börse Stuttgart already has the “Bison” app, which users can also use to trade in crypto currencies, it is not compatible with BSDEX. The provider also offers a free wallet on which customers can safely stow their coins.

  • 4 cryptocurrencies: Bitcoin, Litecoin, Ethereum, Ripple
  • Taker order: 0.2%
  • Maker order: 0.35%
  • Storage of the coins by blocknox GmbH

security

With Blocknox, Euwax and Solarisbank, BSDEX only has German partners. However, the deposits are only secured by a third party for the cash balance, not for the digital assets.

Control bodies such as the Bafin ensure a certain degree of security for the consumer, but there is never a 100 percent guarantee against hacker attacks at crypto exchanges and trading venues for digital assets.

miscellaneous

In the future, customers can expect the provider BSDEX to continually improve its offering: Additional crypto currencies are to expand the portfolio and the Bison app will also work for BSDEX.

Kraken crypto exchange in detail

The crypto exchange Kraken is based in the USA and has been on the market since 2011. In the scene it is considered to be one of the most secure digital trading platforms. With 47 different crypto currencies, Kraken also offers a large selection of Altcoins - i.e. alternative coins - in addition to Bitcoin. Kraken accepts several fiat currencies, including euros and US dollars, for purchasing the coins.

After verification, customers can transfer money via Sepa transfer free of charge. The amount should then be in the account within 72 hours - one of the partner banks is Fidor Bank, among others. The purchase of cryptocurrencies with a credit card is also possible, but then for a fee. With

fees

Fees mainly apply to transactions. Kraken differentiates between maker orders and taker orders. For investments of up to 50,000 US dollars, the fee for makers is 0.16 percent and the fee for takers is 0.26 percent.

The higher the transaction amount, the lower the fees. However, there are no account management fees.

service

The Kraken website is only in English - there is no German version. Those who have no problem with this will find extensive knowledge that leaves almost no questions unanswered. At the same time, the site comes up with detailed instructions for newbies and inexperienced traders.

Kraken does not offer a personal wallet service - customers can either store their coins on Kraken's company wallet or use their own external wallet. In addition to the web application, Kraken can also be used via an app.

  • No deposit fees via bank transfer
  • Trading fee up to USD 50,000: maker order 0.16% / taker order 0.26%
  • Security: 2FA, PGP / GPG, cold wallet, master key
  • Regulation: FinCEN

security

Like other platforms, Kraken uses two-factor authentication. E-mails are encrypted with the PGP / GPG method and all relevant systems of the platform are isolated from each other.

This also applies to the majority of the digital assets that are on a cold wallet. In addition, customers have the option of setting up a master key - certain applications are then only possible by entering this key.

miscellaneous

Kraken offers three user levels that have to be verified: the Starter Level, the Intermediate Level and the Pro Level. Depending on the status of the respective user, he receives certain privileges. For example, the limits for margin trades or withdrawals change.

  • 19 cryptocurrencies - new since May 2021: Dogecoin
  • Payment methods: including credit card, SEPA transfer, PayPal
  • Security: 2FA, SSL, deposit protection € 20,000
  • Important: Cryptoassets are highly volatile, unregulated investment products (your capital is at risk).

Common questions about crypto exchanges

Which crypto exchange is the best?

Although the market often still lacks the necessary state regulations and the scene is generally considered to be untrustworthy, there are also reputable crypto exchanges such as Coinbase or Etoro.

Is Binance serious?

In July, Binance announced that it would be cooperating with the German financial institution CM-Equity. The partnership gives investors the certainty that next to Binance there is a company regulated by the Federal Financial Supervisory Authority (Bafin).

Where are the best places to buy bitcoins?

Crypto exchanges on which you can easily buy Bitcoins are, for example, Etoro, Coinbase, Kraken or Binance. It is usually faster via a neo broker such as Justtrade or Scalable Capital.