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While we’ve become accustomed to invest in stocks, bonds, mutual funds and some physical assets such as real estate, cryptocurrencies are an alternate investment class that has many folks intrigued.
Taking the ideas of a whitepaper created in January 2009 by an author only known as Satoshi Nakamoto, the product opens up a new world in terms of investing.
While the risk is quite high, some have cashed in huge during the run up that saw the price of 1 Bitcoin go over $25,000 Canadian!
If you’re interested in how you can buy Bitcoin in Canada, here’s a quick guide that gives you all the basics.
Purchasing Bitcoin in Canada
There are a few different ways Canadians can purchase Bitcoin or get exposure to Bitcoin.
1. Cryptocurrency Exchanges
Cryptocurrency exchanges allow investors to exchange fiat currency for cryptocurrency as well as exchange one type of cryptocurrency for another.
Whether you want to purchase Bitcoins, Ethereum, LiteCoin, or any of the multitude of currencies offered, a cryptocurrency exchange offers a variety of investing opportunities.
A very common exchange that Canadians use is Coinbase, which allows users to purchase a wide assortment of cryptocurrencies.
To purchase cryptocurrency on these exchanges, users must first set up a wallet to hold their coins.
Once set up, you proceed to selecting the type of cryptocurrency that interests you and the percentage of the coin you’d like to buy.
You can link to your PayPal account or use a credit card to purchase thereafter.
Once purchased, your cryptocurrency stays in your digital wallet.
2. CFDs (Contract for Differences)
What if you could benefit from the changes in Bitcoin prices without having to worry about actually purchasing the digital currency?
Contract for differences or CFDs provide exactly that opportunity.
If you’re familiar with the stock market, CFDs are very similar to futures.
A CFD allows you to profit on the rise or fall of the price, however also works in the opposite way in terms of losing money.
While you may have good reasoning as to the direction of the price, at the end of the day it is just speculating, and with speculating comes risk.
So proceed with caution and do your homework if you’re thinking about investing in Bitcoin using CFDs.
A Bitcoin ATM functions like other automatic teller machines, allowing users to purchase Bitcoin through a debit or credit card.
There are also some tellers that allow you to sell your Bitcoin to them.
Canada has 100s of Bitcoin ATMs located throughout country.
Localcoin for example is a major player in this space, with over 170 ATMs across Canada.
Common Bitcoin Exchanges Available to Canadians
There are a number of exchanges that Canadian can access, some of them being local Canadian operated exchanges.
As mentioned earlier, Coinbase offers a wide variety of cryptocurrencies that you can purchase.
Coinbase offers a simplistic interface for buying and selling cryptocurrencies as well.
However, it has comparatively higher fees (at least when not using the ‘pro’ version of the exchange).
These fees can range from $0.99 and $3.00 per trade.
2. Cash App
Cash App is a peer-to-peer money exchange service that serves multiple purposes, including but not limited to sharing rent payment, splitting bills, or even shopping.
Cash App is built by Square, and has added support for Bitcoin, which means you can buy, sell, hold and withdraw Bitcoin.
It’s more of a simple exchange compared to some of the others on this list.
Binance is heavy on alternative coins for cryptocurrency investment with much lower fees comparatively, for transactions.
Both makers and takers of currency exchange are charged a 0.1% fee.
For those looking for more in-depth information in regards to cryptocurrency trends and profiles of individual currencies, Binance offers advanced charts to meet those needs.
Bitbuy is a Canadian-owned digital currency exchange platform.
Formed in 2016, Bitbuy offers trading services for many cryptocurrencies including Bitcoin, Ethereum, Litecoin, Bitcoin Cash, Stellar, EOS, and DAI.
Trading fees are 0.1% for trade makers and 0.2% for trade takers.
Bitbuy also offers deposits and withdrawals as Interac eTransfer as well as bank wire.
Wealthsimple has also come up with their own cryptocurrency trading options via their Wealthsimple Trade product. Learn more about it in our Wealthsimple Trade Review.
Users who already have the Wealthsimple Trade app for investing in individual stocks and exchange-traded funds simply have to update the app and are now able to invest in Etherium and Bitcoin.
Canadians may find comfort in using Wealthsimple for their Bitcoin purchases as a trusted brand for investing.
Exchanging Bitcoin In Person
The challenge with cryptocurrency exchanges is that 1 bug to the system and your seemingly secure wallet becomes insecure.
This leads to people being drawn to in-person trading, where you, the holder, get to hold on to your Bitcoin until the very last second before exchange.
Platforms to help find potential buyers and sellers like local.bitcoin.com, can provide lots of upfront information about a buyer or seller before you decide to meet up with them.
Much like a chat room or any other meet up forum, you can assess whether you deem the person potentially trustworthy to exchange with.
From there, you can make an appointment to meet up with them and then, further decide if after meeting them, you still wish to make the transaction.
That human touch gives you a sense of whether a trade is a potential scam or a good deal to make.
How do you sell Bitcoin in Canada?
Selling Bitcoin in Canada is very straight-forward.
After you register for an account that allows and exchanges Bitcoin, find your wallet and enter the amount that you want to sell in the exchange portion of the app.
Once you’ve found a price point that you would like to sell at, simply initiate a selling transaction and confirm the sale.
Once confirmed, you can then transfer funds to your bank account in fiat currency or to a prepaid credit card with some exchanges.
Is Bitcoin legal in Canada?
In terms of legality, there are 2 different aspects.
It is completely legal for Canadians to buy, sell and trade cryptocurrencies such as Bitcoin.
However, Bitcoin and for that matter, all cryptocurrencies are not considered legal tender in Canada.
The only legal tender in Canada is the Canadian dollar.
As such, there is no oversight board regulating Bitcoin and other cryptocurrencies.
However, if a company chooses to accept Bitcoin as payment, it is between the purchaser and the seller of the goods.
Which brings us to the next question.
Where Can I Use Bitcoin in Canada?
Some retailers where you can currently use Bitcoin in Canada include:
- Microsoft (now only exclusively for Xbox store credits)
- Starbucks (via the Bakkt app)
- Whole Foods (via Spedn app)
- KFC Canada
Bitcoin Debit Cards in Canada
Cryptocurrency debit cards come in physical, virtual, and prepaid forms.
Unlike traditional debit cards which are linked to a brick-and-mortar bank account, a cryptocurrency debit card will link to a user’s virtual wallet.
Although Bitcoin debit cards are fairly new, here are two to watch out for in Canada.
Originally for the UK market, Wirex has announced that it will be available for use in Canada as well.
Wirex offers a cryptoback program that gives users 0.5% crypto on every purchase and up to $10 in crypto for referrals.
Moreover, users are not limited to Bitcoin and can withdraw cash at ATMs anywhere that Visa is accepted.
Wirex debit card users have a monthly management fee of $2.00 CAD but get free transfers from bank, fiat, or cryptocurrency.
Localcoin offers a physical or virtual prepaid credit card which you can load with funds from your Bitcoin instantly.
Use your credit card anywhere Visa is accepted and also withdraw cash from any ATM that accepts Visa.
A Canadian based company, Localcoin also boasts their own network of over 170 ATMs across the country.
Users have a maximum load limit of $7,500 and a $1,000 maximum ATM withdrawal limit.
Wrapping it up
In the little over a decade that cryptocurrency has existed, Canadians have a wide variety of ways to get involved in this growing decentralized currency.
More and more, products like Bitcoin have become an alternative investment vehicle as well as a means to buy and sell goods.