Introduction
You might know Venmo as your go-to app for splitting dinner bills, but can it also be your gateway to cryptocurrency investing? Owned by PayPal, Venmo now allows users to buy Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH) with as little as $1. With 70 million U.S. users, Venmo’s crypto integration marks a significant step toward mainstream adoption.
However, there’s a catch: the cryptocurrencies you buy aren’t truly yours. Venmo manages the wallets, meaning you hold an IOU rather than actual coins. Combined with high fees, this raises questions: Is Venmo the right platform for crypto investing? Let’s dive in.
Venmo Cryptocurrency: Pros and Cons
Pros
- Accessibility: Ideal for beginners with a user-friendly interface.
- Seamless UX: Integrated into the existing Venmo app.
- Mainstream adoption: Helps normalize crypto for everyday users.
- Trading opportunities: Profit from short-term price fluctuations.
Cons
- No ownership: Venmo controls your wallet (not your keys, not your coins).
- No transfers: Cannot send crypto to other wallets or Venmo accounts.
- No utility: Crypto cannot be used for payments.
- High fees: 2.3% transaction fee (min. $0.50) on buys and sells.
👉 Learn how to optimize crypto trading fees
Venmo Crypto Fees and Hidden Costs
Venmo monetizes crypto through:
- Markup spreads: Charging users slightly above market rates.
- Transaction fees: 2.3% per trade (min. $0.50).
Example: Buying $10 of BTC costs $10.50. If BTC rises 7.7%, selling nets $10.77, but the $0.50 sell fee leaves you with $10.27—a $0.23 loss despite gains.
| Action | Fee |
|--------|-----|
| Buy Crypto | 2.3% (min. $0.50) |
| Sell Crypto | 2.3% (min. $0.50) |
Security and Risks
Centralized Vulnerabilities
- No private keys: Unlike traditional wallets, Venmo manages security.
- Account freezes: PayPal/Venmo has a history of locking accounts for excessive transactions.
“Not your keys, not your coins.” — Crypto adage
Convenience vs. Control
Venmo simplifies access but sacrifices decentralization—a trade-off beginners might accept but experts avoid.
Future Updates: Third-Party Wallet Transfers
Venmo plans to allow off-platform transfers, following Revolut’s lead in Europe. No timeline is confirmed, but PayPal’s Jose Fernandez da Ponte hinted at future functionality.
FAQs
1. Can I transfer Venmo crypto to another wallet?
Not yet. Venmo currently restricts withdrawals to third-party wallets.
2. Are Venmo’s crypto fees competitive?
No. At 2.3% + $0.50 per trade, fees are higher than many exchanges.
3. Is Venmo crypto safe?
Moderately. While convenient, centralized control increases risks like hacking or freezes.
👉 Explore secure crypto alternatives
Final Verdict
Venmo’s crypto service is a double-edged sword: easy for beginners but limited for serious investors. Until wallet transfers are enabled, we recommend using it sparingly or exploring decentralized alternatives.
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