How to Buy Cryptocurrency in Canada
Technology has changed how people work, communicate, or even shop.
Most companies don’t prefer cash anymore, and they opt for contactless payments. Among the many types of contactless payments are cryptocurrencies.
Cryptocurrencies will allow you to buy goods and services, or most of the time to trade them for profits.
It uses an online ledger that is protected by the use of codes. In simple terms, cryptocurrencies, like Bitcoin, are digital currencies used as online versions of cash.
To buy and sell a cryptocurrency, including Bitcoin, you need to use a bitcoin exchange. The best cryptocurrency exchanges should be secure, cost-effective, easy to use and accept various funding sources.And, what many investors get confused with, is most primary discount purchases, ones that help you buy stocks, do not have methods of buying cryptocurrency.
However, there are hundreds, maybe thousands of apps available as exchanges, portfolio managers, and ways to buy and sell.
As a Canadian, which are the best ways to buy and sell cryptocurrencies?
Read on to find more about cryptocurrencies and how to buy them.
In this article, you will find the following topics:
What is Cryptocurrency?
A cryptocurrency is a digital currency that is made to act as a medium of exchange. It is used as a form of payment for buying goods and services online.
Cryptocurrencies can also be defined as the peer to peer systems that enable one to send and receive payments.
They purely exist as digital entries that describe specific transactions.
For example, when one transfers cryptocurrency funds, the transactions are recorded in an online ledger. The cryptocurrencies are stored in a digital wallet.
Cryptocurrency uses a technology called blockchain, which is a decentralized technology that manages and records transactions.
It got its name from the use of encryption to verify transactions. The main aim of encryption is to provide secure and safe transactions.
Common Types of Cryptocurrencies
There are many types of cryptocurrencies, and diversification when it comes to crypto is a necessity.
The following are the top 10 cryptocurrencies based on their market capitalization (Data established as of April, 2024)
1. Bitcoin (BTC)
This is the most prominent type of cryptocurrency and the most recognizable when the crypto topic pops up.
The current market cap is at $1,310.58 billion.
2. Etherum (ETH)
Unlike Bitcoin, you would think Ethereum is an app store. This is because it doesn’t focus on digital currency as much as it does on decentralized applications (phone apps).
It aims to take away the control of apps from middlemen like Apple and return it to the app creators. The currency used for apps is a token called Ether.
The market cap is at $389,6 billion.
3. Tether (USDT)
Tether is a type of cryptocurrency that aims to peg its market value to an external reference point to reduce volatility.
It is common for digital currencies to experience periods of volatility. This is why Tether tries to smoothen price fluctuations to attract users.
Its price is directly related to the price of the US Dollar. This system enables users to make transfers faster than converting to standard currency. This, for example, could be from other common cryptocurrencies back to US dollars.
Its market cap is $109 billion.
4. XRP
XRP is known as a Real Time Gross Settlement System which is a ‘currency exchange and remittance network’ that independent servers validate.
It uses open-source, permissionless, and decentralized blockchain technology. Buying an XRP can be done directly without the need for an intermediary.
This makes it a convenient instrument in bridging two different currencies quickly and efficiently. If you want to purchase XRP, then follow this step by step guide on how to acquire this token.
As of April 2024, the market cap is at $30,3 Billion.
5. Bitcoin cash (BCH)
Bitcoin Cash is another popular type of cryptocurrency in the market today. The main difference between the original Bitcoin and Bitcoin cash is the block size.
The higher the block size, the faster the processing speeds.
The original Bitcoin has a block size is just 1MB, while that of Bitcoin cash is 8MB.
Market cap is $10,1 billion.
6. Polkadot (DOT)
Polkadot cryptocurrency aims at allowing the interoperability of networks. It connects permissioned and permissionless blockchain to enable systems to work together efficiently. However, Polkadot does differ from Ethereum.
For Polkadot, the developers can create a blockchain using the security it already has, while in Ethereum, they create decentralized applications.
Polkadot’s market cap is $10,6 billion.
7. Binance coin (BNB)
Binance Coin acts as a payment method for the payments associated with trading on the Binance Exchange.
Binance Exchange was founded by Changpeng Zhao, and based on trading volumes, it is one of the most used exchanges.
Binance coin was initially an ERC-20 token on the Ethereum blockchain but later launched their own mainnet.
Its market cap is $90,4 billion.
8. Cardano (ADA)
Cardano claims to be the only coin with a scientific philosophy and research-driven approach.
This means that it is a more balanced and sustainable ecosystem for cryptocurrencies. This system underwent critical reviews by scientists and was founded by Charles Hoskinson, a co-founder of Etherum.
It aims to be the world’s financial system by providing solutions to voting fraud, legal contract tracing, and establishing decentralized financial products similar to Ethereum.
As of April 2024, its market cap is at $18,2 billion.
9. Litecoin (LTC)
Litecoin is used the same as Bitcoin, and its functions are practically the same.
Charlie Lee, a former employee of Google, created it in 2011 to improve Bitcoin technology. He wanted to achieve shorter transaction times, lower fees, and more concentrated miners.
It is an open-source global payment network that is not controlled by any central authority. As of April 2024, its market cap is at $6,3 Billion.
10. Chainlink(LINK)
Chainlink aims to bridge the gap between the smart contracts like Ethereum, and data outside.
Blockchains cannot connect to external applications in a trusted way.
However, Chainlink’s decentralized oracles allow the smart contracts to communicate with outside data easily. This is done so that the contracts are executed based on the data.
As of April 2024, Chainlink’s market cap is at $9,08 billion.
How do you buy cryptocurrency in Canada?
If you’re looking to buy cryptocurrencies such as Bitcoin in Canada, then you should follow the following steps;
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Find out the type of cryptocurrency you want to buy.
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Determine the amount of money you’re willing to spend.
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Decide on where you want to buy your cryptocurrencies.
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Choose a trading platform.
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Create an account.
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Select a wallet.
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Choose the payment method.
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Fund your account.
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Lastly, buy your chosen cryptocurrency.
Where Do You Buy Cryptocurrency?
Cryptocurrencies such as Bitcoin, are available for purchase in dollars.
However, some cryptocurrencies require you to pay with bitcoins or another types of cryptocurrency.
To purchase any crypto, you need to have a wallet. A wallet is an online app where you create an account then use it to buy cryptocurrencies such as Bitcoin.
There are a lot of such platforms available online, but only a few can be trusted.
Other crypto buying methods include Bitcoin ATMs, Peer-to-peer trading, Over Counter(OTC), and in-person trading.
However, some of these methods are not as safe as using reputable trading exchange platforms.
Here are some of the most reliable trading platforms;
1. Coinbase
Coinbase is one of the largest cryptocurrency wallet providers and is based in San Francisco. It has over 35 million users in over 100 countries, including Canada, making it an excellent choice for Canadian cryptocurrency enthusiasts.
There are dozens of cryptocurrencies, including Bitcoin, at Coinbase.
Coinbase offers strong security through Coinbase Vaults and two-factor authentication. They charge a flat per-transaction fee and a spread of about 0.50%.
However, the costs may vary depending on the payment method. There is an option to upgrade to Coinbase Pro.
Pros
- Reasonable fees
- High liquidity
- Supports a large number of popular cryptos
- Instant buy option available via debit card
- Assets are stored in secure offline cold storage
- Popular in the industry
- Great buying limits
Cons
- Fees can be high for large transactions and debit card transactions.
2. Bitbuy
Bitbuy is a great exchange platform based right here in Canada. There are several cryptocurrencies available, including Bitcoins, Litecoin, Ethereum, etc.
The fees for e-Transfer or bank wire are start at 0.1% for Pro traders, which is low.
It uses 2-factor authentication and SSL encryption to ensure that your account is secure. Their support is also generous with the availability of live chat, phone and email.
Pros
- Fast
- Significant buying and selling limits
- Large buys are possible through Over The Counter desk
- The mobile app is easy to use
- Secure
Cons
- It does not support Flexepin.
3. Netcoins
Netcoins is a Canadian wallet provider based in Vancouver. You can buy and sell various common cryptocurrencies such as Bitcoin, Ethereum, Litecoin, etc.
They provide a platform for Interac e-Transfer, online bill payment, or bank transfers.
The fees are favorable because they charge 0% on FIAT withdrawal and funding as well as 0.5% on trading. The customer support is available via live chat, email, or phone, during business hours.
It is effortless to get started, and first-time users can get a $10 CAD bonus once they make a cumulative $100 in transactions.
Pros
- Excellent liquidity with no slippage
- Instant withdrawals
- Fast to get started
- Reasonable fees
- Easy verification
- Great customer support
Cons
- Lacks a mobile app
4. Coinsmart
Coinsmart is an exchange platform based in Toronto that is great for people in Canada.
It is one of the few crypto platforms that allows you to buy and sell Bitcoin using a credit card. It is easy for anyone to get started and gain access to other great features.
Many cryptocurrencies are offered on Coinsmart, including BTC, ETH, LTC, EOS, XRP, XLM, NEO, ADA, QCAD, USDT, and BCH.
The account payment options include Interac e-transfer, bank wire transfer, bank draft, credit cards, and debit cards. Along with a multitude of deposit options, their fees are also favorable.
Coinsmart uses 2 Factor Authentication and SSL-encryption to ensure maximum protection to your account.
Pros
- Fast verification
- Supports payments through a credit card
- It offers a wide variety of cryptocurrencies
- Customer support is available 24/7
- Excellent security on the trading platform
Cons
- Fees can be high on some deposits and withdrawals
5. Satstreet
Satstreet is a Canadian over-the-counter(OTC) exchange platform that serves individuals or businesses looking to buy cryptocurrencies of larger amounts from $25k to over $10M CAD.
As a result, it has the lowest fees since one is buying in bulk.
Pros
- Low fees
- Private banking experience
- Great customer service
- A good option for business
- Fast and secure
Cons
- There is a minimum of at least CAD $25k of Cryptocurrencies
Frequently Asked Questions(FAQs) on Cryptocurrencies
1. Do you pay taxes on Cryptocurrency in Canada?
Canada taxes cryptocurrencies as either an income tax or a capital gain, depending on whether it is a business or not.
For crypto businesses in Canada or trader, 100% of their incomes is taxable. However, if you’re a long term investor, only 50% is taxable for capital gains.
2. Is Cryptocurrency legal in Canada?
Cryptocurrencies are not considered legal tender in Canada. However, Canada doesn’t restrict the use of digital currencies, including cryptocurrencies.
The Canadian tax laws, including the Income Tax Act, will also apply to cryptocurrencies.
3. What is the best way to buy and sell Bitcoin in Canada?
Online exchanges such as MyBTC.ca, Bitbuy, Bitvo, etc., are the most popular places to buy Bitcoin for Canadians.
This is because they are easy to use for Canadians, but they are also secure to buy Bitcoin. Other greats ways to purchase Bitcoins include;
- Bitcoin ATMs in Canada- There are hundreds of Bitcoin ATMs that are located all across the country.
- Peer-to-peer transfer- A Peer-to-Peer network allows two users to make an exchange transaction with no middle man involved.
- Over the counter trading- This involves a private transaction between two parties, without any exchange supervision.
- A foreign exchange center or a bitcoin brokerage.
4. Can I buy bitcoin in Canada and sell in another country or vice versa?
Buying and selling bitcoin is not dependent on a country or location.
As long as these kinds of transactions are acceptable in those countries, you can trade any day and anytime. To purchase bitcoin, select an exchanger of your choice.