How to Buy Cryptocurrency in Canada

You are certainly not alone if you are curious about how to buy cryptocurrency in Canada. With the surge in popularity of cryptocurrencies like Bitcoin and Ethereum in the recent past, it is no surprise that many people want to jump on the train.

Even though it took a while for some brands to warm up to the idea of crypto, it is now a valid means of payment for transactions with an increasing number of merchants like KFC, Starbucks, Paypal, and a bunch of others.

Cryptocurrency (which is simply a kind of currency that exists digitally/virtually) is clearly here to stay. To know how to safely and easily buy cryptocurrency in Canada, keep reading and soak in all you can.

How to Buy Cryptocurrency in Canada

Buying cryptocurrency shouldn’t be a problem. We will tell you the best way to buy crypto in Canada. Just follow the steps outlined and explained below, and you are good to go:

1. Decide Which Broker or Crypto Exchange to Buy From

First off, let us explore what brokers and crypto exchanges are and how they differ.

A crypto exchange is a platform that lets sellers and buyers meet to trade on different cryptocurrencies.

With exchanges, the fees are known for being particularly low. However, the interfaces are often complex and complicated with high-level performance charts and different types of trades.

If you are new to crypto trading, it might take you a while to adjust to exchanges.

On the other hand, crypto brokers relieve you of the hassle of trading on exchanges. The interfaces are not too complex and they interact with the crypto exchanges on your behalf.

In some cases, brokers charge more than exchanges. There are also brokers who offer their services seemingly at no cost. However, some brokers sell users’ trading info and don’t carry out users’ trades at ideal market prices.

Now, let us try to distinguish between a broker and a crypto exchange. The following points should help you tell them apart:

• A crypto broker is a person or firm that plays the role of a middleman in the cryptomarkets. A broker makes the selling and buying of cryptocurrencies easier for the parties involved.

• Crypto brokers make selling and buying possible for customers (at prices that the broker sets).

• A crypto exchange offers a platform online for sellers and buyers who trade crypto with one another. Trading is based on market prices in the current period.

• Crypto exchanges also play the role of middleman between buyer and seller, and fees for trading are charged by the exchange.

• A strong understanding of how crypto trading works and being careful with how you handle crypto is very important if you want to use an exchange.

There are many options out there if you are looking for crypto exchanges, but some of the best you will find out there are Bitbuy, Coinsmart, and Newton. It is only these three that I personally use and recommend.

Other crypto exchanges include Kucoin, Coinbase, Crypto.com, and Binance which is still banned in Ontario.

Although it might look like a lot of options, you can read our article on the best crypto exchanges in Canada where we discussed the options in detail.

Wealthsimple Crypto is also one of the leading brokers in Canada.

2. Create and Verify Your Account

Making up your mind about the crypto broker or exchange is just the first step. Next up is opening an account by signing up.

The platform you intend to use and the amount of crypto you intend to buy are the factors that will determine if identity verification is necessary.

ID verification is important because it fulfills the requirements of federal regulatory bodies, and helps to greatly reduce the potential of fraud.

Buying and selling crypto may not be possible until verification of your identity is complete. The broker or exchange could request a copy of your passport or driver’s license.

In some cases, you could be asked to upload a personal photograph or headshot to certify that you actually look how you seem on your documents.

3. Choose How You Will Fund Your Account

Funding your account before buying any cryptocurrency may be necessary and it boils down to how you decide to pay for crypto.

The majority of crypto exchanges permit bank transfers and debits if you plan to fund your account using fiat currency like dollars, pounds, euros, etc.

For some exchanges, you can fund buying crypto with your credit card. Keep in mind that this can be a gamble considering how volatile crypto can be.

The costs of interest when buying with a credit card can make losses worse if the crypto assets suffer value depreciation.

4. Make Your Cryptocurrency Purchase

For investors out there, that are several crypto options to choose from. But the one you choose ought to depend on the one that suits you.

It is important to set your priorities right and re-assess why you want to buy the asset you intend to.

Factors to consider when buying crypto are the potential for an increase in value and your willingness to make transactions using cryptocurrency.

Some of the most popular coins are Bitcoin, Ethereum, Dogecoin, Shiba Inu, and Cardano.

I will also recommend that you read my articles on the best crypto to buy right now, and on cryptocurrencies that are on the rise to contend with Bitcoin.

To help make your decision easier, here is our article on the next cryptocurrency to explode and churn out mega-profits.

Related: How to Buy Chainlink in Canada in 5 Easy Steps

5. Choose a Storage Method for Your Cryptocurrency

Without backing from the Canada Deposit Insurance Corporation (CDIC), crypto exchanges are not entirely safe from hacking or theft.

Many have lost access to their accounts containing millions of dollars worth of crypto because their access codes were lost. So, make sure you have a safe storage location for your digital assets.

If you are taking the broker route when buying crypto, do not expect to have a lot of control over the storage of your crypto assets. With exchanges, the following options are available to you:

• You can move your crypto wallets anytime you want if you do not like the exchange the wallet is attached to.
• You can put your crypto in hot wallets which are connected to the internet. But the internet factor means you could still be a victim of theft.
• Cold wallets are the safest option since they are not connected to the internet. Just make sure you have the correct key codes so you won’t lose access.

It is also worth mentioning that the devices that act as cold wallets (like hard drives and USB drives) can be damaged and your assets could be compromised.

One of the best crypto wallets in Canada is the ZenGo wallet. With their wide coverage, unlimited trading, and other attractive features, they are definitely worth a try. You can read our ZenGo wallet review for a detailed analysis.

Other Ways to Buy Cryptocurrency in Canada

We understand why crypto might be an attractive investment these days considering how trendy it has become, but don’t forget that a lot of risks also come with it.

So, it is important to know your way around and know the different ways to buy and sell.

Crypto exchanges and brokers are not the only ways you can invest. Explained below are the ways you can indirectly make your investments in crypto.

1. Investing in Crypto Exchange-Traded Funds (ETFs)

Crypto ETFs are a great option to invest in several individual investments at the same time with efficiency. With the diversification that ETFs provide, you can lower risk.

There are 5 crypto-ETFs on the Toronto Stock Exchange that have been certified for trading.

The options are Evolve Bitcoin ETF (or EBIT), CI Galaxy Bitcoin ETF (or BTCX), Purpose Bitcoin ETF (or BTCC), 3iQCoinShares Bitcoin ETF (or BTCQ), and Fidelity Advantage Bitcoin ETF (or FBTC).

2. Investing in Companies Connected to Crypto

Buying stocks of companies that own or utilize crypto is another option. Some of these companies also own the blockchain that makes the crypto functional.

It is an even better option if you invest in a company that provides services and has tangible products.

To buy shares of companies that are public, you should have an online brokerage account. Some of the companies you can buy these shares from are as follows:

• Nvidia (NVDA)
• PayPal (PYPL)
• Square (SQ)

You may also do angel investing with startups like Koinly, Shakepay, and BlockFi.

What Is Cryptocurrency?

Cryptocurrency (also known as crypto) is a digital currency made to work as a means of exchange. It makes use of cryptography for the security and verification of transactions. Cryptography is also used to regulate the making of units of digital currencies.

Cryptocurrencies are mostly built on blockchain technology (which is a ledger controlled by a spread-out network of computers). Crypto is different from fiat money like the pound or dollar. This is because no main authority issues crypto.

The decentralized nature of crypto makes it virtually impossible for governments to manipulate or control.

If you are wondering what the best crypto to buy is, check out our article on the topic.

Is Buying Cryptocurrency Safe in Canada?

With the saturation of the crypto space with so many currencies in the recent past, it is hard to vouch for all of them. However, more reputable currencies like Bitcoin have shown a strong commitment to securing crypto assets.

Bitcoin is backed by a technology called blockchain which relies on cryptography. Blockchain is secured by 256-bit SHA hash functions (similar to the kind of security used by the military, VPNs, and banks for system encryption).

So, if you are interested in how to buy cryptocurrency in Canada, you don’t have to bother about how to keep it safe when you do.

Conclusion on How to Buy Cryptocurrency in Canada

With the current trajectory of Bitcoin and other cryptocurrencies, it is clear the crypto market is here to stay.

Sure, there are still many who are skeptical of crypto, but growing knowledge of what the currency stands for and how it works is sure to continue to make more people enthusiasts.

Undoubtedly, Bitcoin is the biggest cryptocurrency out there. However, there is so much more to explore in this wide and wonderful digital world.

As long as your exchange supports the crypto you choose to buy, just follow our steps on how to buy cryptocurrency in Canada to make a purchase.

Related: How to Cash out Crypto Without Paying Taxes in Canada

FAQs on How to Buy Cryptocurrency in Canada

Can You Use Canadian Credit Cards to Buy Crypto?

A lot of credit card companies in Canada don’t allow cardholders to buy crypto. However, Koho is an exception. Known for its progressive policies, it is no surprise that KOHO is one of the few that approve crypto purchases.

The visa debit card for KOHO is one of the very few credit cards in Canada that lets users purchase crypto on some exchanges.

If you want alternative options for crypto purchases (apart from credit cards), you can try Interac e-Transfer, bank wires, direct purchase via debit, and electronic funds transfer.

If you want to know about the best crypto credit cards in Canada, check out our article on the topic.

Is Bitcoin and Other Cryptocurrencies Legal in Canada?

Yes. You can buy crypto without worrying about breaking the law. Cryptocurrencies are classed as commodities.

This means that even though you can buy, sell, or mine crypto, it cannot legally qualify as an investment. Crypto transactions are under the umbrella of transactions by barter.

Cryptocurrency can be thought of like it is silver or gold (precious metals). It is similar in the way it is perceived.

Best Bitcoin Wallets in Canada

For Canadians, there are a wealth of options available when it comes to software and hardware cryptocurrency wallets.

Even though they are not tangible like the wallet in your pocket or credit and debit cards you carry around, they are super important since they are where you keep your crypto assets. Below is a list of wallets you can consider:

Hardware Wallets:

• Ledger Nano X and S
• Trezor One
• Trezor Model T
• KeepKey

Software Wallets:

• ZenGo
• Exodus
• JAXX Liberty
• Atomic Wallet
• Guarda Wallet
• Mycelium

Are There Bitcoin ATMs in Canada?

Yes, there are. Vancouver will go down in history as the place that had the first Bitcoin ATM in the world. Also, Canada has the most Bitcoin ATMs in the world (per capita).

Even though Bitcoin’s ATMs let you buy Bitcoin with unprecedented levels of anonymity, they are also known for their high fees which go up as high as 6-8%. Relatively compared to online exchanges, these ATMs clearly cost way more.