If you are thinking about purchasing bitcoins but are unsure how to go about it, you have come to the right place.
Bitcoin is a digital currency that has gained momentum in the hearts and minds of people worldwide. The popularity of bitcoins as an online currency has surged in recent years.
As the interest in bitcoin continues to grow, people use the currency to send and receive money without involving banks or other third parties.
However, if you’re new to this market, it can be challenging to know how to buy Bitcoins or which company you should buy them from.
This article explains everything you need to know about how to buy bitcoins in Canada.
What is Bitcoin?
Bitcoin is the most popular and most widely used cryptocurrency in the world. Its transactions are recorded on a blockchain.
Blockchain is a public ledger that stores the entire history of transactions on the network.
The main idea behind bitcoin is to eliminate the need for centralized institutions like banks and governments to create trust between parties engaged in a transaction.
Bitcoin is decentralized, and any specific entity doesn’t control it. Instead, Bitcoin uses peer-to-peer technology to operate.
Miners carry out the transactions. Miners confirm transactions by adding them to a blockchain distributed across the network.
Everyone can see these transactions, but no one knows who made them. Only the address they came from and the address they were sent to are visible.
While bitcoin doesn’t need an intermediary, it isn’t entirely private. This is because anyone can look up how many bitcoins someone has and where they send them by looking at their public address on the blockchain.
How to Buy Bitcoin in Canada
There are a few ways to buy Bitcoin in Canada, but it’s better to use an exchange.
An exchange is a service that allows you to convert regular money (fiat currencies like CAD, USD, and EUR) into crypto.
Cryptocurrency exchanges allow you to buy and sell Bitcoin with other users by setting your pricing.
Here is how you can buy Bitcoin in Canada through Cryptocurrency exchanges:
Know Your Budget
It would be best if you start by setting a budget of how much you’re willing to put toward Bitcoin.
This can be as little or as much as you want, but it’s essential to have a clear budget, so you don’t overspend.
Many people start with small budgets and gradually increase their investment over time.
There’s no right or wrong answer here. It all depends on your individual needs and preferences. Just make sure that you don’t spend more than your budget allows!
Choose a Cryptocurrency Exchange
If you’re looking to get in on the cryptocurrency game, you’ll need to find a reliable crypto exchange where you can buy your Bitcoin.
Many Bitcoin exchanges are available in Canada, so we recommend comparing at least two options before deciding which one to use.
This is essential because if something happens to one exchange, your money will hopefully still be safe in another exchange.
Additionally, if you want to be sure that your funds are secure, then it’s essential that you choose an exchange with the security measures that are right for your needs.
Determine Your Payment Method
Once you know which exchange you want to use, it’s time to pick your payment method. Several options are available, including Interac e-Transfer, credit card, debit card, and direct bank account transfers (called wire transfers).
Each option has its pros and cons, so you should carefully weigh up your needs before choosing one.
For example, if convenience is a priority, a crypto credit card or conventional credit card might be your best option. But if speed is critical, then an e-Transfer will likely suit better as payments can be received in a few minutes.
In general, the fees for each method are comparable. However, some exchanges might charge significantly more than others for particular payment methods. So make sure to read through your options carefully before making your choice.
Choose a Bitcoin Wallet
Whether you prefer to keep your Bitcoin on an exchange or in a wallet, you’re going to need somewhere to store it. A Bitcoin wallet is a place where you securely store, send and receive Bitcoins.
The two general types of Bitcoin wallets are hot wallets and cold wallets. Each type has its pros and cons, but they all serve the same purpose: to allow you to store your Bitcoin safely.
Hot wallets are connected to the internet. They’re easier to access and use but also easier for hackers or thieves to gain access to.
Cold wallets are not connected to the internet; this makes them a more secure option than hot wallets. However, they can be inconvenient because you have access only when your wallet is physically available.
For example, if your cold wallet is on your home computer and you’re out of town for work, you won’t be able to access your bitcoins until you get home again.
Purchase Your Bitcoin
To purchase bitcoin, you need to connect your wallet to a bank account, debit card, or credit card.
Alternatively, you can make a wire transfer from your bank to an exchange or use Interac online if the sale supports it.
As soon as you have purchased your Bitcoin, make sure to move it into your wallet.
This is because many cryptocurrency exchanges are unregulated and can be susceptible to theft or a hack.
Once you move your Bitcoin into a wallet, you will have complete control over it, so long as you keep your wallet password safe.
Where to Buy Bitcoin in Canada
At the moment, there are several different exchanges to choose from, and you are probably wondering where to start.
Here is a list of the best cryptocurrency exchanges in Canada to buy Bitcoin:
Bitbuy is a trusted Bitcoin exchange based out of Canada operating since 2016. The company enables Canadians to make deposits via bank transfers or Interac e-transfers for trading purposes.
The platform is easy for beginners and designed for Canadians’ needs with no hidden fees or stringent verification processes.
You can also use the site’s mobile app to trade cryptocurrency on the go. Bitbuy has several features that make it attractive to new traders, such as easy funding options.
- Coins: 15, including Bitcoin
- Trading fees: There is a trading fee of up to 0.20%; a CAD deposit and withdrawal fee of up to 1.00%; crypto withdrawal fees vary
- Account funding options: Bank wire and Interac e-transfer
- Bonus: Get $40 free when you make a first deposit of $250 or more.
Coinsmart is one of Canada’s largest crypto exchanges that allows Canadians to buy Bitcoin using their bank accounts and Canadian credit cards.
It is a Canadian cryptocurrency exchange that makes it quick and easy to buy major cryptocurrencies.
CoinSmart’s mission is to make cryptocurrency easily accessible and safely tradeable for all Canadians.
They have a mobile app and offer an easy-to-use website. Coinsmart has a low trading fee of 0.20% and offers advanced trading features for experienced traders.
- Coins: 13, including Bitcoin
- Trading fees: CAD-to-crypto trades incur a 0.2% fee, fiat deposits are free, withdrawals are subject to a 1% fee
- Account funding options: Bank wire, Interac e-transfer, credit, debit cards, and bank draft
- Bonus: If you deposit at least $100 into your new account, you will receive a $20 bonus
NDAX is a Canadian-based cryptocurrency exchange that offers a variety of cryptocurrencies for trading.
They are among the few crypto exchanges offering trading in all major cryptocurrencies, including Bitcoin, Litecoin, and Ethereum.
The platform supports advanced trading tools, order types, and an intuitive interface. It is easy to use for beginners but powerful enough for advanced users.
NDAX has one of the lowest trading fees in Canada, charging 0.20% for both maker and taker orders. There are no deposit fees.
- Coins: Over 28, including Bitcoin
- Trading fees:20% for buying and selling trades; fiat deposits are free. CAD withdrawals have a flat fee of $25; crypto deposits are free, withdrawal fees vary for cryptos
- Account funding options: Bank wire transfer, Interac e-transfer, and bank draft
- Bonus: If you open a new account and deposit $100, you’ll get a bonus of $10
Newton is another popular cryptocurrency exchange in Canada that allows beginners to buy bitcoin using CAD.
The Newton mobile app, which allows users to buy/sell crypto, is also beneficial and easy to use as a beginner.
It supports Interac e-Transfer, and bank wire deposits and withdrawals. Newton is also known for its high security, making it a good choice if you are concerned about your online privacy.
Newton guarantees that your information will not be shared with anyone unless required by law enforcement agencies.
- Coins: Over 55, including Bitcoin
- Trading fees: Fiat deposits and withdrawals are free; the buy and sell price margin is 0.70 %.
- Account funding options: Bank wire and Interac e-Transfer
- Bonus: Trade at least $100 of cryptocurrency, and you’ll get a $25 bonus.
5. Wealthsimple Crypto
Wealthsimple is the leading platform in Canada for online wealth management. You can easily purchase Bitcoin and other cryptocurrencies right from your phone with Wealthsimple Crypto.
With the Canadian Securities Administrators’ (CSA) approval, it is the first cryptocurrency platform regulated in Canada.
Specifically designed for beginners to digital currency trading, the user experience is outstanding.
Using the Wealthsimple Crypto app, you can trade cryptocurrency with a few clicks after creating your account and funding it.
- Coins: over 35, including Bitcoin
- Trading fees: There is a spread of 1.5% to 2% on buy and sell prices; withdrawals and deposits are free
- Account funding options: Bank transfer
- Bonus: Trade and deposit $150 of cryptocurrency to get $100 in Wealthsimple Crypto
How To Store Your Bitcoin
To store your bitcoin, you have to use a wallet to connect to your smartphone or computer.
Bitcoin wallets are software used to keep private and public keys so you can interact with the Bitcoin blockchain.
You can use the public key to receive bitcoins, while the private key allows you to spend them.
Your bitcoin address is your public key, and you use your private key to sign transactions.
Think of it as an email address and password. Your public key is more like an email address, while your private key is more like the password to that email address.
If you store your bitcoin on an exchange, they will control your private keys. This means that if the exchange gets hacked or collapses, you might lose access to your bitcoin.
If you decide to store it yourself, there are two options: install a wallet on your computer or phone, or print out a unique “paper wallet” for each bitcoin you own.
The only downside of using a paper wallet is that you have to be very careful not to lose it or get it wet; otherwise, you could ultimately lose access to your bitcoin.
Final Thoughts on How to Buy Bitcoin in Canada
With the rise of blockchain technology and cryptocurrencies, many investors are purchasing bitcoin.
However, it can be challenging to know the best way to buy Bitcoins or which company to choose unless you are experienced in this market.
Hopefully, now that we’ve covered the basics of how to buy Bitcoins in Canada, you should have a better idea of where to start.
This is probably just the beginning of your journey, but if you go into it knowing what to expect, then it should be easier.
FAQs on How to Buy Bitcoin in Canada
Is it legal to buy Bitcoin in Canada?
Yes. Canadians can buy and sell cryptocurrencies on open exchanges that function similarly to traditional stock markets.
Is Bitcoin taxed in Canada?
Buying or holding cryptocurrency does not trigger taxes in Canada. However, if a taxpayer sells or mines cryptocurrency, they must pay capital gains or business income tax.
Can I transfer Bitcoin to my bank account?
Yes. You can convert bitcoin to cash and then move it to your bank account in several ways.
Is it hard to sell bitcoin?
No. You can even have computers do it automatically. Bitcoin markets, however, have limited liquidity, making this impossible at the moment. Nevertheless, some bitcoin owners have difficulty selling their bitcoins when the market is hot.