After creating a Venmo account, navigate to the crypto section and click on bitcoin. Select buy, enter the amount you want to purchase, review, and confirm the transaction.
With over 80 million users worldwide, Venmo has sought to capitalize on the shift toward digital assets. In 2021, Venmo rolled out its crypto vertical, allowing users to trade and transfer bitcoin. Since then, Venmo has continued to improve the user experience and offers additional options, like ETH, BCH, LTC, and PYUSD, through third-party custodian Paxos. The guide below will illustrate how simple it is to purchase bitcoin through Venmo and analyze the platform's structure, fees, and overall value for new and experienced crypto investors.
How to Buy Bitcoin with Venmo
- What payment methods can be used to buy bitcoin?
- What limits exist for buying bitcoin on Venmo?
- Can Venmo send bitcoin to another wallet?
Within five minutes, you can set up an account and begin investing in bitcoin through Venmo. If you don’t have a Venmo account, set one up through the website or app before following the steps below. Let’s jump in!
- First, open the Venmo app and navigate to the “Crypto” button to the right of “Pay/Request” at the bottom of your screen.
- Once you are on the crypto side of Venmo, you will see the Buy, Sell, Send, and Receive buttons at the top, as well as cryptocurrencies like BTC, ETH, LTC, BCH, and PYUSD below. Select bitcoin from the list.
- After selecting bitcoin, you will be taken to a price chart that shows the price action from the last 24 hours to the present. Select the blue “Buy” button to purchase.
- If this is your first crypto purchase on Venmo, you may need to verify some personal information. Click “Continue” and input your information. This step, called a Know Your Customer (KYC), verifies your personal and financial activity. It is required in the U.S. and helps prevent criminal activity, increase security in the application, and bring more trust and integrity.
- After verification, which is often instant, you can enter the amount of bitcoin you want to purchase. Enter the dollar equivalent of the bitcoin you want to buy, and pay with your Venmo balance, personal checking account, or debit card.
- You will then be taken to a review page where you will see the amount of bitcoin you are buying, exchange rate, price, transaction fee, and price + transaction fee. When you are ready, select “Buy bitcoin.” After confirming your transaction, you can see your bitcoin holdings under “Crypto Balance” under Venmo's “Me” tab. You are limited to $20,000 in cryptocurrency purchases per week and a limit of $50,000 in purchases in 12 months. Venmo allows you to transfer a maximum of $5,000 of crypto per week.
To send your bitcoin, navigate to your holdings in the Crypto or Me section and click the swap button, which is distinguished by two opposing arrows. Then click the send button and enter the name, username, or BTC address you want to send to. After confirming the address, you can hit send, and your bitcoin will be transferred.
Venmo Fees for Buying Bitcoin
Venmo’s fee structure is calculated using the spread between the market price given by Paxos, Venmo’s crypto service provider, and the price displayed to the user when buying or selling. Venmos FAQs indicate the estimated spread is 0.5% and fluctuates based on market conditions. For context, if you wanted to purchase $50 of bitcoin, the transaction fee would be $1.99. If you buy $100 worth of bitcoin, you can expect a $2.49 fee. A $500 transaction would incur a $9 fee, and a $1000 transaction would incur an $18 fee. These fees are a bit higher than what you would see through a brokerage like Coinbase or Robinhood.
Bitcoin Price Alerts in Venmo
Venmo’s crypto suite also allows you to create price alerts for bitcoin and other supported currencies. To set up a price alert, navigate to the bitcoin page and click the slider to the right of “Price alerts.” You can choose to be notified when bitcoin moves 5% or 10% in either direction within a day. Designed to keep you informed, this feature is limited but can be helpful for those who do not keep up with the markets daily. Using other platforms that allow you to create custom indicators may be a better option for those seeking a more technical experience.
Who Can Buy Bitcoin With Venmo?
Anyone 18 or older can set up a Venmo account, which enables you to send money peer-to-peer and buy, sell, send, and receive bitcoin. To set up a Venmo account, navigate to create an account using your email address and phone number and create a password. Before buying bitcoin on Venmo, ensure that your account is verified and you have a sufficient payment method connected. A cool bonus is that you can send funds to your Venmo account without any transfer fees if you have a PayPal account.
Is It Safe To Buy Bitcoin With Venmo?
Cryptocurrency services on Venmo are supported by Paxos Trust Company, a New York-based custodian providing crypto trading, custody, and transfer services. Paxos has maintained high transparency and security standards and is audited regularly. It is a qualified custodian adhering to compliance standards like Know-Your-Customer (KYC) and Anti-Money Laundering (AML). Users can confidently purchase bitcoin on Venmo, knowing that a reputable entity provides the services.
However, it is essential to mention that centralized entities handle your cryptocurrency when using Venmo. Even with advanced encryption services, regular audits, and full transparency, your crypto is still not entirely in your control. This isn’t a deal breaker for some, but decentralized evangelists emphasize moving your assets to a digital or hardware wallet. Wallets give you complete control of your digital assets, eliminating the need for third parties to provide enhanced security against potential institutional failures or restrictions.
Drawbacks to Buying Bitcoin With Venmo
The simplicity of Venmo’s crypto experience is very appealing, but there are some caveats:
Higher Fees: Due to Venmo’s structure, users may experience higher than average trading fees. Venmo is not a brokerage and relies on Paxos, a third party, to facilitate crypto services. Combined with a simple and convenient user interface appealing to newer crypto users, Venmo charges premium fees.
Spread Costs: When purchasing BTC or other cryptocurrencies on Venmo, you will notice that they use a wider bid-ask spread to manage risk and ensure profitability. This means you are buying BTC at a higher price and selling at a lower cost than other market makers. Especially for more significant transactions, this can cause a loss of value.
Crypto Limitations: As mentioned earlier, you can purchase a maximum of $50,000 in crypto in 12 months on Venmo and only transfer $5,000 weekly. These restrictions may make holders feel claustrophobic, and Venmo's lack of liquidity and mobility is a significant drawback. For investors who will not purchase more than $50,000 of crypto per year, this won’t be a massive problem, but it is still something to consider.
Given Venmo’s lack of direct market access, it relies on third-party services to fulfill crypto transactions. To maintain proper margins, users purchasing crypto on Venmo can be accompanied by higher fees and a wider buy/sell spread, which can eat into potential gains and amplify losses. However, the convenience and simplicity of buying crypto on Venmo may attract current and new Web3 users.
Should You Buy BTC on Venmo?
Venmo has curated an incredibly straightforward crypto interface that is directly integrated into the app. With over 80 million users worldwide, many previously unaware users can now get involved in crypto through an application native to them. For the crypto ecosystem, this is great, as it helps bridge the gap between Web2 and Web3. It’s crucial to acknowledge that Venmo is not a brokerage and relies on trusted custodian Paxos to orchestrate crypto services. This results in higher fees and a suboptimal bid-ask spread on Venmo. When purchasing cryptocurrency on Venmo, you trade in value for convenience, which may appeal to some but not others.
You should consider your investment goals and strategies when deciding whether to use Venmo to invest in Crypto. Currently, Venmo offers BTC, ETH, BCH, LTC, and PYUSD — a limited selection compared to other platforms. If diversification is essential, choosing a dedicated brokerage may be a better option. With that being said, if you simply want to buy and hold bitcoin, Venmo could be a solid outlet for that. Venmo would not be a good option for higher frequency traders as you will leave more money on the table than other platforms due to the high fees. Overall, Venmo provides a convenient gateway into crypto, allowing you to purchase popular blue chips like bitcoin and Ether. Investors should consider the advantages and disadvantages of buying cryptocurrency like bitcoin on Venmo before making financial decisions.
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About Gianluca Miller
Gianluca Miller’s crypto journey started in 2019 when he sought alternative assets to diversify his investment portfolio. With a keen interest in innovative technologies, he became increasingly involved in Web3 through trading crypto and participating in DeFi protocols. Over the last few years, he has become a blockchain evangelist, fascinated with the tech’s utility and impactability. Gianluca contributes to Benzinga, is working on a Defi research project through Blockchain UCSB, and continues to expand his Web3 acumen daily. He loves learning, analyzing new projects and market conditions, and building relationships with industry leaders.