How to Buy Crypto with Venmo: The Complete Guide for 2024
Venmo, which is owned by PayPal, launched its cryptocurrency feature in 2021, allowing users to buy, hold, and sell Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. It's a move that aligns Venmo with other fintech giants diving into crypto. But just because it’s easy to use doesn’t mean it’s the best option. There are fees, restrictions, and limitations you need to be aware of.
1. Why Venmo Is Not the Best Option for Crypto Purists
If you're a true believer in the "not your keys, not your crypto" philosophy, Venmo might feel like a compromised way to hold cryptocurrencies. You don’t actually get control over your private keys, meaning that Venmo (and PayPal, by extension) acts more like a custodian than a true crypto wallet. This could make some crypto purists uneasy because it defeats one of the fundamental purposes of cryptocurrencies: decentralization.
More importantly, you cannot transfer crypto directly from Venmo to an external wallet. That means no sending Bitcoin to a friend, no Ethereum transactions for decentralized finance (DeFi), and certainly no withdrawals to a cold storage wallet. You're locked into Venmo’s ecosystem, and the only way out is to sell your crypto back into dollars. This makes Venmo more suitable for those who want to dabble in crypto rather than those who want full-fledged participation.
2. How to Buy Crypto with Venmo: The Quick Steps
If convenience outweighs the desire for full control, buying crypto on Venmo is dead simple.
- Step 1: Open Venmo on your phone or device. Ensure that your app is updated to the latest version.
- Step 2: Go to the "Crypto" tab in the main menu or by searching "Crypto" in the search bar.
- Step 3: Choose your cryptocurrency. Currently, Venmo supports Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. Select the one you're interested in.
- Step 4: Tap "Buy" and enter the amount. Venmo allows you to purchase as little as $1 worth of crypto.
- Step 5: Review fees. Venmo charges a fee for every crypto purchase, depending on the size of your transaction. Always check this before confirming.
- Step 6: Confirm your purchase. Once confirmed, Venmo will show your balance in the app, and you’ll own the corresponding amount of cryptocurrency.
3. Venmo's Crypto Fees: What You Need to Know
Venmo’s convenience comes at a price, and that price is in the form of transaction fees. These are tiered based on the amount you are purchasing:
| Transaction Size | Fee |
|---|---|
| $1 - $4.99 | $0.49 |
| $5 - $24.99 | $0.99 |
| $25 - $74.99 | $1.99 |
| $75 - $200.00 | $2.49 |
| Over $200 | 1.8% of transaction value |
For example, if you’re buying $100 worth of Bitcoin, you’ll pay a fee of $2.49, meaning you’re actually only investing $97.51 into Bitcoin. These fees can add up quickly, especially for small purchases. So, if you’re planning to make frequent transactions, be aware of this cost.
4. Holding Crypto on Venmo: What Happens After You Buy?
After you buy crypto with Venmo, it’s stored in your Venmo account, not in a separate wallet where you control the keys. You can check your balance at any time, and Venmo will show you real-time price updates. However, you cannot move your crypto out of Venmo’s ecosystem. The only options you have are to hold, buy more, or sell back into dollars.
This makes Venmo’s crypto feature more akin to buying a stock through a brokerage. You own the asset in theory, but your control over it is limited. If you want to move your crypto to another platform, you’ll need to sell it, transfer the cash to your bank, and then use another service to buy crypto again.
5. Pros and Cons of Buying Crypto with Venmo
| Pros | Cons |
|---|---|
| Easy to use, especially for beginners | You don’t own your private keys |
| Quick access from your Venmo app | Cannot transfer crypto out of Venmo |
| Low minimum purchase limit ($1) | Fees can be relatively high for small transactions |
| Can link directly to bank accounts or Venmo balance | Limited cryptocurrency options (Bitcoin, Ethereum, Litecoin, Bitcoin Cash) |
| Safe and secure (due to Venmo’s infrastructure) | Not suitable for long-term, serious crypto investors |
6. What’s the Future of Crypto on Venmo?
Venmo has made crypto accessible to millions of users who may not have considered buying Bitcoin or Ethereum before. However, for those who are serious about crypto, Venmo’s current offering is more of a starting point than a full solution. The limited functionality and inability to transfer crypto outside the Venmo ecosystem will likely deter serious crypto users.
That said, Venmo is constantly evolving, and PayPal has hinted at expanding its crypto offerings. There are rumors that Venmo may eventually allow wallet-to-wallet transfers, integration with decentralized apps (dApps), and more diverse cryptocurrency options. But until those features arrive, Venmo will remain a convenient but limited tool for crypto beginners.
7. Is Venmo a Good Platform for Crypto Beginners?
For beginners, Venmo is a great starting point. Its ease of use, familiar interface, and low barriers to entry make it attractive for those who are crypto-curious but not ready to dive deep into the technical aspects of blockchain technology. Venmo’s integration of crypto into its app brings digital assets into the mainstream, and this could help bridge the gap for millions of people who are new to the space.
However, as you gain more experience and want more control over your crypto, you’ll eventually need to transition to platforms that give you access to private keys, more trading options, and lower fees.
8. What Are Some Alternatives to Venmo for Buying Crypto?
Venmo is not the only game in town. If you’re looking for alternatives with more control, fewer fees, and more crypto options, consider the following platforms:
| Platform | Key Features |
|---|---|
| Coinbase | Easy to use, but higher fees compared to Venmo |
| Binance.US | Lower fees, more cryptocurrency options |
| Kraken | Advanced features, low fees, supports staking |
| Gemini | Secure, regulatory-compliant, supports DeFi |
| Cash App | Simple interface, but limited to Bitcoin |
Each platform has its pros and cons, so compare them based on your needs. If you prioritize convenience, Venmo is still a good option. If you want lower fees and more crypto options, consider platforms like Kraken or Binance.
9. Conclusion: Should You Buy Crypto with Venmo?
The answer depends on what you're looking for. If you’re a beginner, looking for a simple, no-fuss way to start buying crypto, Venmo is one of the easiest platforms to get started. It’s integrated into an app many people already use, and the user experience is seamless.
However, if you’re serious about building a long-term crypto portfolio, you’ll want to explore other platforms that offer lower fees, more control, and a wider range of cryptocurrencies. Venmo is a good entry point, but it’s not the final destination for most crypto investors.
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