How to buy bitcoin in Canada (and find out where, too)

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What’s the big fuss about holding bitcoin in Canada? If you’re a MoneySense reader, you already know that bitcoin is increasingly major news. The standard-bearer of cryptocurrencies (also referred to as digital or virtual currencies) has been soaring in value. Despite some pretty major fluctuations over the years, $1,000 of bitcoin purchased in 2010 (one year after the currency was established) was worth around $287.5 million at the end of 2020. And when bitcoin hit its all-time high of more than $64,000 in April 2021, that same investment was suddenly worth $800 million—at least for a while.

Crypto has become such a phenomenon that some of the most famous names in global enterprise have climbed onboard. Most notably, in February 2021, Tesla purchased $1.5 billion in bitcoin and announced plans to accept it as payment for its vehicles. Paypal, Starbucks and Yum! Brands (parent company of KFC, Pizza Hut and others) are just a few companies that are now accepting or testing bitcoin payment in various territories. Meanwhile, RBC Capital Markets recommended in a recent report that Apple, the world’s largest publicly traded company, should launch its own cryptocurrency exchange. 

If you don’t know much about bitcoin and want to learn more, you can find an excellent primer here. And if you’re ready to take the plunge but don’t know where to start—particularly if you want to buy in Canadian dollars—read on.

Buying bitcoin through an ETF

An ETF (exchange-traded fund) is a “basket” of securities (groupings of individual stocks, or government and corporate bonds) that you acquire in a single purchase, similar to a mutual fund. Unlike a mutual fund, however, an ETF can be bought and sold on a stock exchange throughout the trading day—just like a stock. They also carry lower fees than mutual funds.

ETFs are an easy way to get bitcoin into your portfolio, because if you already have a brokerage account, there are no additional steps you need to take in order to purchase a bitcoin ETF. At the time of this writing, there are three bitcoin ETFs in Canada, and more are pending. The very first, Purpose Bitcoin ETF (BTCC), launched on the TSX in February 2021, followed by Evolve’s Bitcoin ETF (EBIT) and CI’s Galaxy Bitcoin ETF (BTCX). This puts us well ahead of the U.S., where cryptocurrency ETFs have yet to be approved. As with all ETFs, you can buy and sell them through a traditional or online brokerage. Find out more about the process here.

Note that some crypto ETFs can only be held in a non-registered account, so you’ll need to prepare for tax implications of your trades.

Holding bitcoin directly

While ETFs are convenient, they don’t allow you to hold bitcoin directly. This might be fine for a more passive or less experienced investor, but if you do want to hold bitcoin directly, the easiest way to get started is to open a “digital wallet” via an online exchange. 

Now, this is where you want to spend some time doing research, because online exchanges vary wildly in terms of features, benefits and security. Start with how you want to invest. Are you interested in only one type of cryptocurrency, or are you looking to invest in several? Which payment methods do you intend to use for purchases (via link to your Canadian bank account, or pay with crypto you already own, for example)? Do you want the option of trading on your smartphone? As well, you need to be absolutely sure that the exchange you choose is trustworthy, and will be able to offer support should you need it.  

One option that ticks multiple boxes is CoinSmart, a Canadian-owned digital currency exchange (DCE) created exclusively for buying and selling bitcoin (as well as other cryptocurrencies, including Ethereum, Litecoin and more) in Canadian dollars.

More than 95% of CoinSmart’s currency is kept in “cold storage” wallets, meaning your holdings are kept offline. This is the most advanced method in the industry for ensuring the security of your bitcoin. As well, CoinSmart has partnered with two banks (DCBank and Switzerland-based InCore Bank) for secure onboarding and offboarding of funds. 

CoinSmart also offers low or $0 fees for transactions, including deposits, withdrawals and trading. Refer a new user, and you can scoop bonus credits, too.

Getting started is easy: Simply create an online account and you’ll receive verification in minutes. Your CoinSmart digital wallet allows you to purchase bitcoin using funds you’ve e-Transferred directly from your Canadian bank account. You can also fund your CoinSmart purchases using your credit card, cryptocurrency you already own, or a bank draft. Deposits are credited on your account the same day they’re received—unlike with some online platforms, there’s no waiting period. 

CoinSmart’s user interface is designed to be intuitive even for first-time investors, so you can buy, sell and trade cryptocurrencies with one click. And if you do need assistance, 24/7 support is available via email, phone or live chat. (Advanced Trade features are available for those with more trading experience.) 

Bottom line

With Canada becoming the first nation to approve cryptocurrency ETFs in early 2021, it’s increasingly clear that bitcoin isn’t going away. While some people will be happy to hold crypto inside a pre-selected basket of securities, for those who wish to hold bitcoin and other cyber currencies directly, it’s important to connect with a platform that stays abreast of regulatory requirements and offers peace of mind that the cash you use to fund your account, as well as your bitcoin, is safe. 

 

The post How to buy bitcoin in Canada (and find out where, too) appeared first on MoneySense.

Article Source and Credit moneysense.ca https://www.moneysense.ca/save/investing/how-to-buy-cryptocurrency-in-canada/ Buy Tickets for every event – Sports, Concerts, Festivals and more buytickets.com

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