Crypto is a global phenomenon that is hard to look past! After all, who doesn’t want to make some quick bucks by making some smart investments?
Looking at the recent global-level enterprises like Tesla, Starbucks, Paypal, and Yum going for the crypto run, everybody wants to delve into the trend. Besides, it’s prevalent if you’re among the thousands of beginner investors currently querying Google on ‘how to invest in cryptocurrency in Canada’.
Relax, we understand you want to get a piece of the pie, and this article is here to help you with the same.
Continue reading as we take you through the different steps involved in investing in cryptocurrency Canada. In the following sections, we have explored the various steps involved in the process and suggested a list of the top crypto exchanges in the country. So, let’s get started!
Table of Contents
How To Buy Cryptocurrency In Canada
- Figure out how which & how many cryptos you want to buy
When exploring how to buy cryptocurrency in Canada, the first step is to figure out the different cryptos you want to buy. Since all the cryptos are of various ranges, you might want to develop a well-balanced portfolio to help you cover up other significant losses.
For instance, if you distribute your money equally among different crypto tokens, you’ll have a chance to cushion your losses in case of a sudden market collapse. Unfortunately, while some have become overnight crypto billionaires, many have lost their fortunes too!
Pro Tip: Before you decide to invest any money on crypto tokens, ensure that you have enough funds to back yourself up if you lose all the funds. A smart move would be to stay invested in emergency funds and retirement plans.
- Decide where you want to buy your digital token
Once you’ve curated a portfolio of the different cryptos you want to invest in, it’s time to decide how you want to invest. To give you a fair idea, today, there are multiple methods in which you could invest and start your journey with cryptos. Let’s check them out:
Crypto Exchange & Trading Platform
Suppose you’ve had any prior idea of how to invest in cryptocurrency in Canada. In that case, the chances are that you already know that you cannot simply invest in crypto via traditional financial institutions.
Instead, similar to stock exchanges, even cryptos are traded over crypto exchanges, allowing users to engage in transactions. Here, you can get started with hundreds of small and big projects, among other opportunities in the market.
Besides, you also can invest in cryptos using a trading platform in Canada. These platforms are touted to bring in several exchanges and allow their clients to trade with the best prices and lowest tax rates. However, it should be noted that crypto investors don’t have the functionality to transfer their tokens to someone else over these platforms. Instead, you’re generally confined to the options of buying and selling.
One of the latest innovations in the crypto industry, these ATMs are the perfect option to invest in cryptocurrency in Canada. They are a small kiosk that allows users to invest in cryptos using their credit or debit card. However, these ATMs are yet to become common as they generally charge you a higher tax and aren’t widely an accepted idea.
Over the Counter (OTC)
Next, we have the OTC (Over-the-counter) method! This is a crypto trading method that occurs outside of the traditional exchanges, similar to peer-to-peer trading. However, this option is often limited to brokers dealing with high-paying clients with investments in millions.
Now, this is the most straightforward method to buy cryptocurrency in Canada! Here you need to find a local vendor who’ll accept your local currency in exchange for your desired cryptos.
- Choose a trading platform or crypto exchange
Now that you have the options in front of you, the majority might be confused with the option to get started. In our opinion, buying cryptos from an established exchange is the safest, simplest, and most convenient way of investing in them.
However, since there are many exchanges, you’d want to know the several advantages and disadvantages concerning them. The best way to ensure that you choose a reliable platform or exchange is to educate yourself on these factors:
First, ensure that the exchange employs cryptography and cutting-edge technology to protect its consumers’ funds. It would also help to examine the percentage of its assets stored in cold storage and whether it has private insurance to reimburse users in case the platform has been hacked.
Next, look at the fees associated with using the exchange. Investors may be charged an administrative or yearly fee and fees for depositing, withdrawing, and trading cryptocurrency. These costs are generally tiny (around 1%), but the bigger they are, the more they eat into your investments.
iii. Customer Services
Being a first-time user, you’d want to ensure you get all the required help from your selected crypto exchange. This is where customer service comes into the picture! When signing up for an exchange, try looking for an exchange with 24/7 customer support and a good reputation for resolving queries. Nobody wants to get locked out of their account or have their cryptocurrency disappear.
Iv. Range Of Cryptos On Offer
Finally, consider which cryptos the exchange permits users to trade. Even though there are hundreds of distinct cryptocurrencies, most exchanges would only let investors purchase or sell a limited number of them.
When implied in real life, you’ll come across tens, possibly hundreds of crypto exchanges that many first-time users swear by. However, we understand the confusion it can create when you want to buy cryptocurrency in Canada. Therefore, to help you better, we have listed some of our recommendations of the top exchanges to buy cryptocurrency in Canada in the following section.
Top Exchanges To Buy Cryptocurrency In Canada
When curating a list of the top crypto exchanges in Canada, you can’t miss out on Crypto.com, one of the most reliable exchanges to offer an array of crypto-centric services. Being one of its kind, this feature-rich platform comes with several beginner and advanced level tools and multiple functionalities that make it a platform suited to investors and traders of all types.
At the forefront, Crypto.com allows users to access over 250+ digital tokens, with the functionality of purchasing them via fiat money. This way, users signing up for the platform can diversify their platforms across crypto projects of all shapes and sizes. Other functionalities over the platform include an NFT marketplace, a standalone crypto wallet, and crypto credit cards to allow users to make the most of their experience.
Now, moving to the fee structure, the platform is touted for having a transparent fee structure with competitive rates. The platform comes with a variable commission model, costing 0.40% per slide. However, for the users of the CRO token (Crypto.com’s native token), they can further lower their rates. Another way to reduce the fee is via increasing the volume above $25,000 at a 30-day threshold.
Funding options in the platform include debit and credit cards with a 2.99% fee on both methods. In addition, users also can fund their crypto wallets using their bank accounts. Interestingly, users holding at least 5,000 CRO tokens can also avail themselves of discounted trading fees.
Crypto.com sets up an exception using its crypto interest accounts that helps you earn attractive yields on your crypto deposits for the long-term investors. The APY rates for interest accounts at Crypto.com can vary, going up to 14.5% for specific tokens. However, it should be noted that users of the platform need to lock in their digital currencies for at least three months with a minimum number of CRO tokens.
On the flip side, the discounts around trading fees can be confusing, making Crypto.com an option limited to active investors and traders.
Another great crypto platform for you to get started is Coinbase, a platform known to have a broad user base, expanding over tens of millions of active trading accounts. This US-based crypto exchange and the broker has recently expanded into the Canadian market and provides the users with a simple and minimalistic UI, making it one of the top options for beginner Canadian users.
In terms of its offerings, the platform allows investors to access over 50 crypto markets, including some major projects like Bitcoin, Ethereum, and other small-scale projects like Dogecoin. Besides, the platform offers two different types of trading accounts (Base and Pro), allowing both beginner and advanced users to utilize advanced tools, charting features, and educational aids to make the most of their trades.
Coming to the fee structure, this is where Coinbase makes all the difference with its offering. The platform has a generally higher fee. Transactions begin at a standard commission of 1.49%, going up 4% if you decide to opt for funding options like Visa or MasterCard. However, if you’re an avid investor, you might have a chance to cushion your transaction fees by staking your crypto tokens with Coinbase. Based on the staked tokens, the platform has a minimal three-month lock-in and 5.75% APY.
The platform makes up for its high fee structure with the ease of use and security features that it adds for the users. Coinbase is also the only crypto exchange to have been listed as a public company on the NASDAQ exchange, adding to the reputation of this exchange.
This regulated crypto exchange secures 98% of its user funds over cold storage in terms of its security. Besides, the platform introduces several additional security features like 2FA, biometric fingerprint, and AES-256 private keys encryption, ensuring reliable security for everyday transactions of the users.
On the flip side, the complex fee structure is one of the big let downs of the platform. So while Coinbase tries to cover it with its advanced features, you might want to beware if you’re going to invest in cryptocurrency in Canada.
Launched in 2016, BitBuy is a reliable exchange to buy cryptocurrency in Canada. This popular exchange comprises over 350,000 active crypto traders in the country. The platform is an excellent start for beginner and advanced investors alike as it brings reliable functionalities, seamless customer support, and advanced trading tools for users to improve their trading strategies as they proceed.
What sets out the BitBuy platform is that it allows users to invest in cryptocurrency in Canada in 2 different ways: Express Trade and Pro Trade module. Both the modules are well suited for different types of investors. For instance, the ‘Express Trade’ functionality is a reliable feature for investors who trade Bitcoin as a one-off investment, attracting a charge of 0.20% per trade.
Alternatively, as the name suggests, the Pro Trade module is a platform that allows more experienced traders to buy cryptos as per their strategies. The module will enable traders to set their price alerts, technical patterns, and advanced sales orders. Users can access the Pro features at a discounted 0.10% per transaction.
The platform is currently limited to bank or wire transfers in terms of funding. The platform has a vivid fee structure, costing users around 0.5 – 1.5% fee in commission for deposits and withdrawals. Users looking for funding options via credit or debit card might have to skip the platform. However, to compromise for the same, users get a minimum deposit of $100.
BitBuy has earned a name for its stringent security measures in terms of its security. The platform backs its users by storing 95% of their funds over cold storage and is approved as a money service business under FINTRAC. In addition, BitBuy’s servers are compliant with ISO, FIPS 140-2, and SOC.
On the flip side, the crypto withdrawals over this platform are high, costing between $1 to $20 in mining fees.
When thinking of the different methods to invest in cryptocurrency in Canada, you can’t necessarily skip out on Binance. Ever since its launch in 2017, the platform has continued to impact the industry. Currently the largest exchange in terms of registered users, trading volume, and liquidity, it is a platform suitable for beginners and advanced traders and investors.
Users signed up with Binance have the option to diversify their folios by investing in numerous trading markets spread across 1,000 pairs. Investors interested in diversifying their portfolios can start their journey by investing in several large-scale projects like Ethereum, Bitcoin, Metaverse, and Defi coins. On the contrary, they also have the option to invest in several small-scale ERC-20 tokens and allow the provision to invest in NFTs.
Using Coinbase as their go-to exchange, Canadian users can make the most of the platform via its BNB token. The platform charges a 0.10% commission per slide regarding its fee structure. However, traders buying and selling crypto will be charged 0.50% of the transaction. Besides, users also can reduce these commissions by increasing their 30-day trading volume.
Moving ahead, Binance offers numerous funding options for its Canadian users. For instance, you have the opportunity to fund your account using fiat currency via a local bank. Other options to fund your account include using a Visa or MasterCard by paying a simple fee of 4.5%. But, it should be noted that both methods require users to verify their identity via a KYC.
Binance also introduces crypto derivatives, allowing users to trade in futures and options, adding to the list of features. Finally, if you’re a long-term investor, you might also find the staking feature appealing. This feature enables the users to earn a competitive yield over their saved cryptos with the platform.
On the flip side, the platform isn’t backed by any regulatory body and has no built-in wallet available for the function. This might be limiting for the everyday users who’ll have to swap their cryptos to fund their accounts.
Last on our list; we have Coinberry, one of the latest entrants that mark its presence for around a few years in the industry. Founded by Andrei Poliakov and Evan Kuhn, the company started as a Bitcoin ATMs provider in Canada.
Fast forward to 2022, the platform today accepts the five big projects in the industry, namely Bitcoin (BTC), Ripple (XRP), Bitcoin Cash (BCH), Stellar (XLM), Ethereum (ETH), and Litecoin (LTC). While the platform might be limiting its crypto investments, the Coinberry Autopilot feature makes up for the limited projects.
As the name suggests, users can automate their purchases at a specific price using your investment strategy. This way, users can maximize their funds while making the most of their strategy. But, interestingly, that’s not all! Another exceptional feature of the Coinberry application is ‘Coinberry Pay.’ This feature allows traders to accept cryptos as payments, saving you time and conversion fees.
Talking of the fee structure, we think this makes Coinberry one of the best bitcoin apps in Canada. The platform has 0 fees for initial deposit and withdrawal of funds. In contrast, users need to pay a minimal trading commission of 0.50% of the transaction.
In terms of safety, the platform is registered as a Money Service Business, complying with the FINTRAC regulations and security standards. In addition, the platform also ensures safety via access to customers and company funds. Plus, they back their customers with 2FA and cold storage options.
On the flip side, the platform is pretty basic, making it a suitable platform for beginner investors only. For the advanced traders, they might want to look otherwise.
Practical Applications Of Crypto Earnings In Canada
Given your interest in cryptos, we’re sure your investments will pay off! But have you ever wondered about the different possibilities of your crypto funds?
Yes, we agree that buying goods or services with crypto has been a hassle in the past, but let’s not forget the rate at which the industry is innovating. Therefore, here are a few ways you could spend your crypto earnings on different goods and services.
- Crypto Cards
The most straightforward way to spend crypto earnings is to attach them to a crypto card, now available in debit and prepaid format.
Prepaid cards are exactly what they sound like: you get the option to connect a card to a crypto wallet and then load money onto it. When the card’s balance is depleted, it can be reloaded. Of course, when it comes to loading a prepaid card, you must first convert your cryptos into Canadian dollars, which may be time-consuming and costly if exchange costs are involved.
On the other hand, Debit crypto cards eliminate the “loading step” hassle from the equation. The card is linked to a crypto wallet and can be used at point-of-sale devices as long as the retailer accepts the crypto debit card. As a result, the conversion from cryptocurrency to Canadian dollars instantly allows consumers to make transactions rapidly.
- Retailers That Accept Cryptocurrency
A limited (but rising) number of merchants have now started accepting cryptos (preferably Bitcoin) as legal tender for their products and services. This implies that investors may buy products and services without exchanging cryptocurrency for Canadian dollars, saving time and money on fees.
- Payment Processors That Accept Crypto
Many POS systems are also beginning to accept cryptocurrency as a genuine payment method. For example, Square, Stripe, and even Shopify have started integrating cryptocurrency into payment processors, potentially allowing crypto users to purchase things from a wide range of small enterprises and local stores.
Cryptocurrency Taxation In Canada
When thinking of the different ways to invest in cryptocurrency in Canada, we’re sure you won’t want to miss out on the legality part! Therefore, it should be noted that cryptos are taxable in Canada. The CRA (Canada Revenue Agency) taxes crypto transactions as either capital gains or business income.
The difference between both methods is immense! If crypto trading or mining is done in the form of a business, you’re eligible to file taxes on 100% of the capital gains. On the other hand, if you’re a trader or investor as a hobby, you’ll have to pay taxes on 50% of the capital gains.
Takeaway Tips To Keeping Cryptos Securely
When investing in the crypto markets, you should choose an authorized and licensed broker who can issue you the instruments or act as a custodian for your digital assets. Furthermore, when it comes to these markets, they’re devoid of these balances and checks for the most part. As a result, it is up to investors to safeguard their digital assets from catastrophes or disasters.
Given the circumstances, the best method to secure the safety of your crypto coins is to store them in secure hardware wallets that provide an additional layer of protection. However, when dealing with these wallets, remember that these wallets come with a private key which is later used to sign transactions, allowing users to send and receive cryptos safely.
Q1. Is there any one specific crypto exchange with the lowest fees in Canada?
No, several crypto exchanges have different fee structures for different trades and transactions over their platform. Finding these crypto exchanges is a matter of your research work. Therefore, to give you an idea, you can go either with Coinberry or Bitbuy as they have fees of 0.5% and 0.1%, respectively.
Q2. Which crypto exchange is the safest in Canada?
You can’t simply point out one crypto exchange as the safest. Today, we have numerous crypto exchanges under different security protocols with several monitoring bodies worldwide. However, when it comes to Canada, ensure that you go through their legal policies, FINTRAC registration, and cold storage funds, among others.
Q3. Is cryptocurrency legal in Canada?
Yes, cryptocurrency is legal in Canada! Investors can now buy, sell, or trade cryptos without breaking any law. However, you need to understand that the Canadian government doesn’t consider it a legal tender; therefore, there are no chances of country-wide approval anytime soon.
Shrey Jain is a Chartered Accountant who holds a forte in creating informative content on niches like Finance, Blockchain, crypto, and Taxation. He is a contributor on Hackernoon and Publish0x, where the audience has highly appreciated his articles. In addition, his knowledge in the finance field has helped both beginners and experts gain valuable insights into the domains of Blockchain and finance.