How To Buy Cryptocurrency
Making Crypto Simple
If you are looking for a super quick breakdown on how to buy Cryptocurrency in Canada you can find our step-by-step below. We highly recommend Bitbuy since it’s very easy to use, they have the lowest fees in Canada and their support team is truly excellent. If you’re interested, have a look at our comparison of the best cryptocurrency exchanges in Canada.
How To Buy Cryptocurrency in Canada
- Register an account on Bitbuy
- Verify your account
- Deposit CAD
- Click on “Express Trade” in your dashboard
- Search for the Cryptocurrency you are looking to buy and click “Buy Coin”
- Enter the amount of CAD you want to spend or how much of the particular Cryptocurrency
you want to buy
- Click “Buy”
- If you have any trouble with the above steps, you can reach out to their support team 🙂
If you are looking for more detailed guides, you can find them below.
Where To Buy Cryptocurrency in CanadaWe’ve reviewed over 100 exchanges across the globe and have been doing this for many years. We are confident that Bitbuy is the best exchange in the world for Canadians to use.
Find out more about Cryptocurrency Exchanges in Canada
Trading with cryptocurrency has been a real sensation in the last three to four years. And why wouldn’t it be, when they have such a strong appeal: their prices are climbing up the ladder, bringing back lucrative returns to investors around the world.
Even their volatility has a certain attractiveness to it. It opens up a field of possibilities for knowledgable traders, as long as they’re mindful of the risks.
As the crypto market in Canada is gaining more and more traction, we decided to prepare a thorough guide on how to buy cryptocurrency in Canada and what to keep in mind before getting involved.
Let’s get started!
Cryptocurrency in Canada
A lot of you would be surprised to find out that Canada has emerged as one of the leading nations when it comes to blockchain technology and cryptocurrencies in the last couple of years.
So, what has made Canada a dominant force in the crypto industry?
For one, Canada has some of the lowest energy costs and high-speed Internet, which makes it the perfect spot for cryptocurrency mining. China used to be on the top, but the country’s strict crypto regulations have seen people coming to Quebec in droves, turning Canada’s major city into one of the most popular destinations for creating a mining pool.
The Canadian government has played its part by putting the industry into focus and supporting blockchain and crypto startups. Toronto is home to the Blockchain Research Institute, host to a global network of experts that undertake groundbreaking research to leverage the technology and promote the field.
On top of that, the biggest and most active stock exchange in Canada, the Toronto Stock Exchange (TSE), has already listed a couple of blockchain exchange-traded funds.
Digital currencies, of the likes of Bitcoin, are not considered legal tender in Canada. This status is reserved for government-issued currencies defined by the Currency Act, such as their official currency, the Canadian Dollar.
This doesn’t mean that cryptocurrencies are illegal but they’re out of the jurisdiction of traditional financial institutions. Canadians are allowed to purchase and sell cryptos on crypto exchanges and use them to buy items on sites that support them as a payment option. Mining coins is allowed both for making a profit or as a hobby, where the latter is nontaxable.
Speaking of taxes, the Canadian tax laws apply to crypto transactions as well. The Canadian Revenue Agency (CRA) has made it clear that “goods purchased using digital currency must be included in the seller’s income for tax purposes”. So, when you file for taxes, you’re required to indicate all losses and gains from crypto activity.
The country is making some serious efforts to lift the restrictions for the crypto industry from the past and popularize their use and adoption. The Bank of Canada, together with other major world banks, is closely studying the use of blockchain technology and assessing the need for issuing their own digital currency.
What Kind of Cryptocurrencies Are There?
Cryptocurrencies have been around for over a decade now. During this time, their number has exceeded 5,000, according to CoinMarketCap. For those of you wondering why we need so many, let’s take a look at the different types of cryptos and what they’re used for.
Digital coins can be divided into two major categories: altcoins and tokens.
The name ‘altcoin’ refers to cryptocurrencies with more or less the same features as Bitcoin, only they’re not Bitcoin but alternatives to Bitcoin. Many of these altcoins promise to improve Bitcoin’s performance and offer solutions to its shortcomings. However, a great deal of them fail under the pressure of low liquidity and insufficient hash rate.
On the other hand, this group includes altcoins like Ethereum, Litecoin, and Ripple, that have withstood substantial challenges with their strong infrastructure. The teams of experts designed them using a completely different protocol, instead of Bitcoin’s open-sourced code.
Unlike altcoins, tokens are usually launched and distributed in an Initial Coin Offering (ICO) to early investors. They don’t have their own distributed ledger technology and are dependent on other existing blockchains. Ethereum, for example, is host to hundreds of these tokens.
Although they can be used as stores of value, cryptocurrencies can perform a range of functions. Their trademark can be fueling the network and covering service costs for dApps and smart contracts (utility tokens), securing and protecting your account from DDoS attacks and spams, providing users with voting rights, etc.
How to Invest in Crypto in Canada
Investing in cryptocurrency starts with extensive research to get to know the market better. It includes reading all sorts of guides and user reviews while working on your investment strategy. Then, it’s time to look for a cryptocurrency exchange that caters to your needs.
Don’t underestimate the importance of choosing a trustworthy platform as thefts and frauds loom at large in the crypto world. But don’t worry, we don’t mean to scare you off, just to prepare you to be on your guard.
Whenever you come across a platform that you like, check whether it has been licensed, look at the list of supported coins, the available payment methods based on your location, any deposit and withdrawal limits, KYC checks, the team’s responsiveness, and type of security methods.
If you own zero digital coins, either look for an online payment service where you can exchange dollars for cryptos or register on fiat to crypto exchange to avoid unnecessary money transfers. In most cases, the only advantage that crypto to crypto exchanges have over fiat to crypto ones is the wider variety of supported coins.
Next, make a choice between using a centralized or decentralized exchange.
Centralized exchanges are run by companies that act as intermediaries in users’ transactions. Some of them match users’ offers with other users’ demands, others provide their own liquidity. Most of them are licensed by the financial regulators in their native countries, meaning they comply with their regulations.
As a result, centralized exchanges usually ask users to do a KYC check for them and provide a copy of a government-issued ID for verification. Plus, they employ top-notch security methods such as 2FA using Google Authenticator, withdrawal whitelists, and cold wallets, among others.
Decentralized exchanges put emphasis on the peer to peer connection between users. They let them do the businesses themselves and agree on the trading terms. Here, you get every payment method imaginable, and most of the time you aren’t required to disclose your identity unless your seller makes that request.
Should You Invest in Cryptocurrency?
Cryptocurrencies were created in reaction to the increasing centralization of the financial system which had financial institutions prying into people’s money transfers and controlling how they governed their finances. Creating a peer to peer electronic payment system based on digital currencies was seen as the best solution.
For a lot of traders, this crypto philosophy is their entry point. They believe that cryptocurrencies are the future, so why not grab their share in time and make a real profit out of cryptos when they get even more mainstream?
There are other traders who like the thrill of speculating on altcoins’ prices without actually purchasing them. This is another profitable option, although it could be a real touch-and-go. If you get your strategy wrong, you risk magnifying your losses.
We recommend investing in a couple of different assets, instead of putting everything you have into one cryptocurrency. If you want to play it safe, choose a coin with high market capitalization and liquidity level. These are strong indicators that the coin is in demand.
How to Store Cryptocurrencies
There’s one final step to take into account before you’re ready to start trading cryptocurrency – choosing the right wallet to store your coins in.
Now, another perk of using a centralized exchange is that they normally provide a digital wallet for their customers. When registering for an account, the platform will ask you to choose whether you’ll be using their native wallet or a third-party one that you’ll have to link your account to.
If you choose the first option, every time you make a purchase or receive a transaction your coins will reflect in the exchange’s wallet.
Storing your funds online is convenient alright but is it secure enough? Not really. Even if you use a reliable wallet provider, there’s still a chance that someone will get hold of your private key or manage to hack your account and steal your funds.
Luckily, there’s a safer alternative. Nowadays, you can purchase a hardware wallet that stores your private key offline. By remaining offline most of the time, except when they connect to the web to make a transaction, these USB-like devices are almost unhackable.
- ‘How To Buy Bitcoin in Canada?’, Yahoo Finance
- ‘5 Easy Ways to Buy Bitcoin in Canada 2020’, Blockgeeks
- ‘How to buy Bitcoin in Canada’, Wealthsimple
- ’19 Exchanges to Buy Bitcoin & Crypto in Canada (2020)’, Buy Bitcoin Worldwide
- ‘A Guide To Cryptocurrency Trading’, Savvy New Canadians
- ‘Buy Bitcoin in Canada: 25+ Exchanges’, Finder
- ‘The Comprehensive Starter Guide’, Bitbuy