You can use various ways to buy Bitcoin and other cryptos in Canada. The most popular methods are through brokers or directly via a crypto exchange.
Buying cryptos like Bitcoin (BTC), Dogecoin (DOGE), or Ether (ETH) in Canada is on an upsurge as cryptocurrency ownership increases. Furthermore, the Ontario Securities Commission, in its official report, said that at least 30% of Canadians aim to buy crypto assets in 2023.
Therefore, in case you are wondering how to buy Bitcoin or crypto in Canada, here is an overview of what you may need to do.
Is It Legal To Purchase Crypto In Canada?
Crypto trading is highly legal in Canada although it is not yet considered legal tender. In that context, Canada Revenue Agency (CRA) specifies that virtual currencies are and offers information on all the applicable taxes. One can decide to shop in crypto in Canada where retailers, coffee shops, and e-commerce websites accept it.
The CRA treats crypto like a commodity that can result in capital gains or losses. Notably, taxable transactions include receiving, sending, and trading cryptos. Canada Securities Administrators’ website details how your cryptocurrency assets are regulated in Canada.
Do Canadian Banks Allow Crypto?
With the growing popularity of cryptos, Canadian banks do allow and recognize crypto trading subject to federal and state regulations. For example, Canadian banks have installed 2600+ Bitcoin ATMs, with Toronto at the highest with 897 ATMs.
These ATMs enable people to change their physical money into digital currency and buy and sell crypto in exchange for cash. Canada is second globally in Bitcoin ATMs after the United States.
Some of the popular Canadian banks that support Crypto trade in one way or the other include the Canadian Imperial Bank Of Commerce, Scotiabank, ATB, National Bank of Canada, Royal Bank of Canada, and Coast Capital, among many others. All these banks have joined in as the crypto popularity in Canada continues to increase.
Banks support the purchase of crypto using a debit card, bank wire transfer, and Interac e-transfer. Clients are needed to link their bank accounts with a crypto exchange for purchasing crypto using the Canadian dollar or other popular fiat currencies.
Credit cards can also be used to buy crypto. Nevertheless, that option can be quite expensive since banks may decide to charge higher interest rates and extra cash advance fees on cryptocurrency credit card purchases.
Ways To Acquire Crypto In Canada
Two major ways to acquire crypto in Canada include through a broker or directly via an exchange. Nonetheless, crypto exchanges give the account holder more control over their crypto while the brokers like Mogo and Wealthsimple may put some limitations on holdings, transfers, withdrawals, and storage subject to their brokerage policy.
Crypto brokers in Canada are quite similar to traditional finance trading platforms. They strive to simplify the process and reduce the complexities involved through their platforms and their expertise in the crypto space. But, the convenience comes at a cost, since they charge higher fees for their services when compared with the crypto exchanges.
How To Buy Crypto In Canada Via A Crypto Broker
Here are some of the main steps involved when buying crypto through brokers in case one does not want to trade using a crypto exchange.
Set Up An Account On The Trading Platform
You start by choosing a Crypto trading platform of your choice, go to its website or download the app and sign up. Then, create an account with a valid email and phone number and fill in all the required personal information details to ensure that your account is verified.
Add Funds To The Account
A majority of the crypto broker platforms have many options for payment strategies to load trading funds with a credit card, a debit card, a wire transfer, PayPal, or a gift card. The transfer fees can vary for every method and are normally higher for credit card payments since they are quicker (normally rake 5-10 minutes) and low for wire transfers which take several days to load funds.
Buy The Crypto Of Your Choice
Choose the crypto that you want to buy, place an order and the trading platform will find the best match for your buy order. Nevertheless, crypto brokers have a limited basket of currencies to choose from and they do not trade in every crypto, unlike crypto exchanges that offer more choices.
Interestingly, there are also limitations on sell orders and volume. Thus, it is always advisable to check these specifications before investing any funds.
How To Buy Crypto In Canada Using A Crypto Exchange
The steps highlighted below will get the ropes for crypto exchange although every exchange might have some slight variations.
Choose Your Exchange
A crypto exchange is described as a digital marketplace where buyers and sellers can meet and trade various kinds of cryptos. Most of these exchanges will support trading the Canadian dollar for crypto or exchanging one kind of crypto for another.
The exchanges that mainly support crypto trading in Canada include Crypto.com, Coinberry, Coinbase, Bitbuy, Binance, KuKoin, and Kraken.
Create An Account
After choosing an exchange, sign up with a valid email and phone number to open an account. Authentication documents including driver’s license and passport will have to be uploaded. A majority of these exchanges will request a selfie to check for a face match with the documents submitted for authenticating the person’s identity.
Deposit Cash And Buy Crypto
Once the account has been activated, connect a bank account and deposit funds into the newly opened crypto account. With your funds ready, place a crypto buy order and acquire any crypto from the ones that are available on the exchange. Many people purchase Bitcoin in Canada but the market is also flooded with altcoins like Binance Coin (BNB) and Solana (SOL).
Similarly, one may also sell crypto on the exchanges and change to fiat, and withdraw in the linked bank account. Bitcoin ATMs are another way to change crypto to cash in Canada. Nevertheless, not all ATMs have the facility and most of them charge high service fees.
How To Store Crypto In Canada
It is crucial to store and secure crypto assets since unlike fiat, they are not guarded by any insurance protections like the Canada Deposit Insurance Corp. Risks of hacking, cyberattacks, thefts, or scams are high and therefore it is crucial to secure safe storage for your crypto funds. Some of the common ways of storing crypto in Canada include:
On The Exchange
You can leave the crypto on the exchange and earn some passive income from farming and staking. Staking is a great way to earn crypto interest by locking the Crypto holdings on the exchange. On the other hand, farming helps you to earn more cryptos using the existing crypto assets on the exchange.
It is advisable to turn on the two-factor authentication (2FA) in the security settings of the account login to offer an additional layer of security. Risk can also be minimized by spreading the crypto assets across many exchanges.
Nevertheless, as centralized exchanges have been known to change policies, and rules or cease operations, storing on many exchanges might spread the risk of losing all assets in the event of a seizure, hack, or closure of an exchange.
Crypto wallets hold the ‘private keys’ or a password for access to the Crypto assets. Thus, crypto wallets do not store your crypto, but they hold the keys that offer access to your digital money living on the blockchain. It is possible to have multiple coins in one wallet like ETH, BTC, DOGE, or any other altcoins, as supported by that wallet.
Nonetheless, securing the seed or recovery phrase is important since it helps in the recovery of private keys in that instance that one may forget. Losing and forgetting the seed phrase means permanent loss of the stored crypto assets.
Two kinds of crypto wallets in Canada or any nation are hot and cold wallets.
Binance Trust Wallet, CoinSmart, MetaMask, and Coinbase Wallet are ideal examples of crypto hot wallets used in Canada. On the other hand, the most popular cold wallets include Trezor and Ledger. One may also strike a balance between storing in a hot and cold wallet since storing lots of coins in one wallet can be highly risky.
Where To Spend Crypto In Canada
Purchases can be made using Bitcoin and other cryptos in Canada at retailers who directly accept crypto payments or via debit or prepaid cards. In that context, a 2022 Capterra survey of 1,000 Canadian respondents highlighted that 62% of the participants seem interested in being paid in cryptocurrency in the next five years.
CoinGate accepts many cryptos where one can acquire gift cards for PlayStation, BestBuy, eBay, Amazon, Airbnb, and more. Other retailers that accept crypto payments in Canada include Travala (travel bookings), Newegg (gaming products), and Overstock (home furnishings).
Coincards is another webshop where you can buy gift cards for most of the top brands including Air Canada, Amazon, BestBuy, and many others. They accept Bitcoin and other cryptos and offer prepaid cards for shopping on their website. Notably, the prepaid card is reloadable and can be topped up with crypto based on the customer’s needs.
Proactive provisions and clearly defined regulations set Canada apart and offer a benchmark for other countries to create a crypto-friendly environment with the aim of accelerating crypto adoption proactively. Nevertheless, investors need to do their massive background research and check to ensure that they are well-versed in the crypto space before making any investments.