How to Send Bitcoin on Venmo to Another Wallet

Unfortunately, the answer to the direct question is you can’t. As of today, Venmo does not allow you to directly send Bitcoin you’ve purchased on its platform to an external cryptocurrency wallet. Think of Venmo’s crypto feature as more of an investment vehicle within their ecosystem than a full-fledged crypto exchange. You can buy, hold, and sell Bitcoin (and other supported cryptocurrencies) on Venmo, but you can’t transfer it off the platform.

Now, before you throw your hands up in frustration, let’s dig into why this is the case and explore potential workarounds, limitations, and crucial information you absolutely need to know about handling crypto on Venmo.

Understanding Venmo’s Crypto Limitations

Venmo’s approach to cryptocurrency is intentionally restricted. They position it as a way for users to dip their toes into the crypto world without the complexities of managing private keys, gas fees, and decentralized wallets. This simplified approach, while appealing to newcomers, comes with significant limitations for seasoned crypto enthusiasts.

Why Can’t I Transfer My Bitcoin?

The main reason Venmo doesn’t allow transfers is control. By keeping the cryptocurrency within their platform, Venmo maintains complete oversight and reduces potential regulatory headaches. Allowing external transfers would introduce complexities regarding security, compliance, and liability that they currently avoid. It allows them to easily remain compliant with AML (Anti-Money Laundering) and KYC (Know Your Customer) regulations.

The “Buy and Sell” Only Model

Venmo’s cryptocurrency feature operates on a “buy and sell” model. You purchase Bitcoin (or other supported cryptos) at the prevailing market price, and when you want to “cash out,” you sell it back to Venmo at their offered price. You never actually own the Bitcoin in the traditional sense, where you control the private keys and have direct access to the blockchain. It’s more like owning shares of Bitcoin within the Venmo environment.

Potential Workarounds (Use with Caution!)

While direct transfers are impossible, there are a few indirect “workarounds” people might consider, but they come with risks and limitations:

Sell and Rebuy Elsewhere: The Most Common Approach

This is the most straightforward (though not the most efficient) method. You sell your Bitcoin on Venmo for USD. Then, you withdraw the USD to your bank account. Finally, you use those funds to buy Bitcoin on a crypto exchange or platform that does allow external wallet transfers.

Caution: This involves transaction fees on both Venmo and the other exchange, and you’ll be subject to capital gains taxes on any profits you make during the sale on Venmo. Also, the price of Bitcoin can fluctuate rapidly, so you might end up buying it back at a different price than you sold it for.

Using a Third-Party Payment Service (Extremely Risky)

Theoretically, you could attempt to find someone willing to buy Bitcoin from you outside of Venmo and have them send you money through Venmo. You would then use that money to purchase Bitcoin on an exchange that allows withdrawals.

This is highly discouraged! This approach is fraught with potential for scams. You have no guarantee that the person will actually send you the money, and Venmo’s buyer/seller protection likely wouldn’t cover a cryptocurrency transaction. It’s best to avoid this approach entirely.

Essential Considerations Before Buying Bitcoin on Venmo

Before you even consider buying Bitcoin on Venmo, keep these crucial points in mind:

Fees and Spreads

Venmo charges fees for buying and selling cryptocurrency. These fees can vary depending on the amount of the transaction. Additionally, there’s a spread, which is the difference between the purchase price and the selling price. These costs can eat into your profits, especially if you’re frequently buying and selling.

Tax Implications

Selling Bitcoin on Venmo is a taxable event. You’ll need to report any capital gains (or losses) on your tax return. Keep accurate records of your transactions to avoid any issues with the IRS.

Security Risks

While Venmo itself is generally secure, you are still entrusting your cryptocurrency to a third-party platform. There’s always a risk of hacks or security breaches, though Venmo has implemented security measures. However, this risk is inherent in any centralized service.

Limited Control

As emphasized earlier, you don’t truly control your Bitcoin on Venmo. You can’t use it to make direct purchases, participate in DeFi (Decentralized Finance), or move it to a hardware wallet for enhanced security.

Frequently Asked Questions (FAQs)

Here are some frequently asked questions to further clarify the situation:

1. Does Venmo offer any way to access my Bitcoin’s private keys?

No. Venmo does not provide users with access to the private keys associated with their Bitcoin holdings. This is a fundamental limitation of their platform.

2. Can I use my Bitcoin on Venmo to pay for goods and services?

No. You cannot use your Bitcoin held on Venmo to directly pay for anything. You must first sell the Bitcoin for USD and then use the USD balance in your Venmo account.

3. Are there any plans for Venmo to allow Bitcoin transfers in the future?

While there’s always a possibility of future changes, Venmo has not announced any plans to enable Bitcoin transfers to external wallets. It’s best to assume that this functionality won’t be available in the foreseeable future.

4. What are the alternatives to buying Bitcoin on Venmo if I want full control?

Consider using a reputable cryptocurrency exchange like Coinbase, Kraken, Binance (where available), or Gemini. These platforms allow you to withdraw your Bitcoin to your own wallet, giving you complete control.

5. Is it safe to store Bitcoin on Venmo?

Venmo employs security measures to protect your funds. However, storing Bitcoin on any centralized platform carries inherent risks. For maximum security, consider using a hardware wallet for long-term storage.

6. What happens to my Bitcoin on Venmo if my account is hacked?

If your Venmo account is compromised, there’s a risk of your cryptocurrency being sold and the funds withdrawn. It’s crucial to enable two-factor authentication and use a strong password to protect your account.

7. How do I report my Bitcoin transactions on Venmo for tax purposes?

Venmo typically provides users with transaction history reports that you can use to calculate your capital gains and losses. Consult with a tax professional for personalized advice.

8. Can I send Bitcoin from Cash App to Venmo?

No. Cash App, similar to Venmo, has its own cryptocurrency ecosystem. While Cash App does allow Bitcoin withdrawals to external wallets, you cannot directly transfer Bitcoin between Cash App and Venmo. You would need to sell on one platform, withdraw the USD, and then buy on the other.

9. What’s the difference between buying Bitcoin on Venmo versus a crypto exchange?

The key difference is control. On a crypto exchange, you typically have full control over your Bitcoin and can withdraw it to your own wallet. On Venmo, you are limited to buying and selling within their platform.

10. Does Venmo support any other cryptocurrencies besides Bitcoin?

Yes, Venmo typically supports other popular cryptocurrencies like Ethereum, Litecoin, and Bitcoin Cash. The specific cryptocurrencies available may vary, so check the Venmo app for the latest list.

11. Can I use a VPN to bypass Venmo’s geographic restrictions on cryptocurrency purchases?

While a VPN might theoretically allow you to access Venmo from a restricted location, it’s not recommended. Using a VPN to circumvent geographic restrictions could violate Venmo’s terms of service and potentially lead to account suspension.

12. Is there a minimum or maximum amount of Bitcoin I can buy on Venmo?

Yes, Venmo sets limits on both the minimum and maximum amounts of cryptocurrency you can buy or sell. These limits may vary depending on your account verification status and other factors. Check the Venmo app for the current limits.

In conclusion, while Venmo offers a convenient way to buy and sell Bitcoin, it’s crucial to understand the limitations. If you need the flexibility to transfer your Bitcoin to other wallets, a dedicated cryptocurrency exchange is a much better option.