How to Buy Cryptocurrency in Canada (2024)

Looking to enter the world of cryptocurrencies and wondering how to buy cryptocurrency in Canada? You’re not alone. With the surge in popularity of digital currencies like Bitcoin and Ethereum, many Canadians are eager to explore this exciting investment opportunity.

Cryptocurrencies are gaining traction as a store of value. They are also increasingly recognised as a valid means of payment for transactions with major merchants like KFC, Starbucks, Paypal, and more.

In this comprehensive guide, we will provide you with straightforward steps to safely and easily purchase cryptocurrencies in Canada. Whether you’re a beginner or have some experience, we’ve got you covered. Get ready to navigate the crypto world and discover the best strategies to buy and trade your favourite cryptocurrencies in Canada. Let’s dive in!

4 Easy Steps to Buy and Trade Your Cryptocurrencies in Canada

If you’re prepared to venture into the exciting world of cryptocurrencies and want to navigate the Canadian market easily, keep reading.

Here, we will walk you through a straightforward process that will empower you and show you the best way to buy crypto in Canada effortlessly.

Whether you’re a complete beginner or have some experience in the crypto space, these four steps will help you understand how to buy and sell cryptocurrency in Canada.

Let’s get started:

1. Research and Choose a Reliable Cryptocurrency Exchange or Broker

The first step to buying and trading cryptocurrencies in Canada is to find a trustworthy exchange or broker. These platforms act as your entry point to the crypto market and significantly impact your trading experience.

In Canada, you can buy and sell cryptocurrencies using crypto trading platforms, crypto exchanges, P2P exchange services, and Bitcoin ATMs. However, with numerous options available, thorough research is essential to select a reliable platform.

When deciding which platform to use, look for exchanges or brokers prioritising user fund security through two-factor authentication and cold storage. Consider the reputation and track record of the platform and opt for those that have been operating for a significant period and have a positive standing in the cryptocurrency community.

Ensure that the exchange or broker supports the cryptocurrencies you want to buy or trade, such as Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC), and also evaluate the liquidity offered, as higher liquidity allows for easier buying and selling without major price fluctuations.

Compare fees charged by different platforms, looking for competitive rates and diverse trading options like limit and stop-loss orders. Assess the user interface and experience provided because a user-friendly interface simplifies navigation and efficient trade execution. Confirm compliance with relevant Canadian regulations, demonstrating their commitment to legal and ethical practices. And lastly, check the availability and responsiveness of customer support to ensure timely assistance with any issues or queries.

Reputable cryptocurrency exchanges and brokers in Canada include Bitbuy, Coinsmart, and Newton. These platforms are considered secure and trustworthy. Wealthsimple Crypto is also a leading broker in Canada, offering a user-friendly platform and access to various cryptocurrencies. Additional options in Canada include KuCoin, Coinbase, and Crypto.com. Please note that Binance is currently banned in Ontario.

To learn more about these platforms and their specific features, read our detailed article on the best crypto exchanges in Canada.

2. Set Up Your Account

Once you’ve chosen an exchange, it’s time to sign up for an account. To do this, you must visit their official website or download the authorised app from a reliable source. It is important to avoid unofficial sources to protect yourself from phishing attempts.

Once on the platform, look for the sign-up or register button on the homepage. Click on it to begin the account setup process.

You will be prompted to provide your personal information, including your name, email address, and a secure password. Make sure to create a strong password that combines letters, numbers, and special characters. This will significantly enhance the security of your account.

Depending on the platform and regulatory requirements, you may need to complete a verification process. This process is often known as Know Your Customer (KYC) and involves confirming your identity. The platform may request documents such as your driver’s license or passport. Sometimes, you may be asked to provide a selfie to match your appearance with the submitted documents. This step is crucial for compliance purposes and to prevent fraudulent activities.

Once your account is set up, it is crucial to prioritise its security. Enable two-factor authentication (2FA) to add an extra layer of protection. Keep your login credentials confidential and avoid sharing sensitive information.

Take some time to familiarise yourself with the platform’s features. Explore options such as buying and selling cryptocurrencies, portfolio tracking, and security settings. Understanding the platform’s functionalities will enable you to make informed decisions and navigate the cryptocurrency market more effectively.

3. Funding Your Account

Once you’ve created an account on a crypto trading platform or online exchange, decide how you want to purchase your crypto. These platforms offer various payment methods, including credit cards, debit cards, PayPal, and gift cards, depending on the platform you choose.

You can deposit money into your crypto account by linking your bank account, authorising a wire transfer, or using a debit or credit card.

However, take note of the transfer fees associated with your preferred payment method before funding your crypto account. For instance, if you use a credit card to fund your crypto exchange account, the funds will be available within 5-10 minutes, but the transfer fees can be high. On the other hand, if you opt for a wire transfer, it may take a few days, but the transfer fee could be lower.

4. Choosing and Buying Cryptocurrency

You can place your first cryptocurrency order once you have funds in your account. A wide selection of cryptocurrencies is available depending on your chosen platform, ranging from popular ones like Bitcoin and Ethereum to lesser-known options such as Theta Fuel or Holo.

When purchasing, simply enter the ticker symbol of the chosen cryptocurrency (e.g., BTC for Bitcoin) and specify the quantity you want to buy.

Many exchanges and brokers allow you to purchase fractional shares of cryptocurrencies, enabling you to own a portion of high-priced tokens like Bitcoin or Ethereum.

Select your desired cryptocurrency, place the order, and the trading platform will match your buy order.

Note that crypto brokers have a limited selection of currencies compared to crypto exchanges. Before investing your funds, you must be aware of any restrictions on sell orders and volume., so take the time to review these details before proceeding.

Here are the symbols for the ten most popular cryptocurrencies based on market capitalisation:

Bitcoin (BTC)
Ethereum (ETH)
Tether (USDT)
USD Coin (USDC)
Binance Coin (BNB)
Chainlink (LINK)
Binance USD (BUSD)
Cardano (ADA)
Solana (SOL)
Dogecoin (DOGE)

I also recommend reading my articles on the best crypto to buy right now and on cryptocurrencies that are on the rise to contend with Bitcoin and the next cryptocurrency to explode and churn out mega-profits.

How to Store and Secure Your Cryptocurrency

Cryptocurrency exchanges in Canada are not backed by the Canada Deposit Insurance Corporation (CDIC), which means they are not completely safe from hacking or theft. Many Canadians have lost access to their accounts containing millions of dollars worth of crypto due to lost access codes, so having a secure storage solution for your digital assets is crucial.

If you choose the broker route for buying crypto, you may have limited control over the storage of your crypto assets. However, if you opt for an exchange, it is typically stored in a crypto wallet attached to the exchange. If you are dissatisfied with the provider or want to enhance security, you can transfer your crypto to a separate hot or cold wallet.

Hot wallets: These are online crypto wallets that operate on devices connected to the internet, such as computers, tablets, or phones. While hot wallets offer convenience, they carry a higher risk of theft due to their internet connection.
Cold wallets: Cold crypto wallets are the most secure option as they are not internet-connected. They come in the form of external devices like USB drives or hard drives. However, handling cold wallets carefully is crucial, as losing the associated keycode or experiencing device failure could permanently lose access to your cryptocurrency. Some hot wallets are run by custodians who can assist you in regaining access if you are locked out.

One highly recommended crypto wallet in Canada is the ZenGo wallet, offering extensive coverage, unlimited trading, and appealing features. For a detailed analysis, you can read our ZenGo wallet review.

How to Monitor and Manage Your Cryptocurrency Investments

Monitoring and managing your cryptocurrency investments is crucial to stay informed and make informed decisions. Here are some steps to effectively monitor and manage your crypto investments:

Track your portfolio: Use a portfolio tracking tool or a spreadsheet to keep track of your cryptocurrency holdings. Include important details such as the amount of each cryptocurrency, purchase price, current value, and percentage change. Regularly update this information to have a clear overview of your portfolio’s performance.
Stay updated with market news: Keep yourself informed about the latest news and developments in the cryptocurrency market. Follow reputable sources, join relevant online communities or forums, and subscribe to newsletters or blogs focused on cryptocurrency. This will help you understand market trends, regulatory changes, and other factors that can impact your investments.
Implement a diversified strategy: Diversification is key to managing risk in any investment portfolio, including cryptocurrencies. Spread your investments across different cryptocurrencies, industry sectors, and investment strategies. This can help mitigate the impact of any individual cryptocurrency’s performance on your overall portfolio.
Set stop-loss and take-profit orders: Consider setting up stop-loss and take-profit orders on your trading platform. Stop-loss orders automatically sell your cryptocurrency if it reaches a predetermined price, limiting potential losses. On the other hand, take-profit orders automatically sell your cryptocurrency when it reaches a target price, securing profits. These orders can help you manage risk and avoid emotional decision-making.
Regularly review and rebalance: Periodically review your portfolio’s performance and rebalance if necessary. Rebalancing involves adjusting the allocation of your investments to maintain your desired risk profile. If certain cryptocurrencies have significantly outperformed others, you may need to sell some of them and redistribute the funds to maintain your desired asset allocation.

Alternative Ways to Buy Cryptocurrency in Canada

While investing in cryptocurrencies can be attractive, it’s important to understand the associated risks. To navigate the crypto market and explore different investment options, consider the following approaches:

Crypto Exchange-Traded Funds (ETFs): Investing in crypto ETFs allows you to diversify your investments efficiently. These funds enable you to gain exposure to multiple cryptocurrencies, reducing risk simultaneously. In Canada, there are five certified crypto ETFs available on the Toronto Stock Exchange: Evolve Bitcoin ETF (EBIT), CI Galaxy Bitcoin ETF (BTCX), Purpose Bitcoin ETF (BTCC), 3iQCoinShares Bitcoin ETF (BTCQ), and Fidelity Advantage Bitcoin ETF (FBTC).
Investing in Companies Connected to Crypto: Another option is to invest in companies that are involved in the crypto industry. Look for companies that own or utilise cryptocurrencies or those that have a tangible connection to blockchain technology. It’s even better if the company offers services and has tangible products. To invest in shares of public companies, open an online brokerage account. Some examples of such companies include Nvidia (NVDA), PayPal (PYPL), and Square (SQ).
Angel Investing in Crypto Startups: Consider investing in crypto startups for potentially high returns. Startups like Koinly, Shakepay, and BlockFi offer opportunities for early-stage investments. However, participating in angel investing requires careful research and an understanding of the startup ecosystem.

Is Buying Cryptocurrency Safe in Canada?

When it comes to the vast array of cryptocurrencies available today, it can be challenging to assess their reliability. However, established cryptocurrencies like Bitcoin have demonstrated a strong dedication to safeguarding crypto assets.

Bitcoin utilises blockchain technology, a secure system based on cryptography. The blockchain is protected by robust 256-bit SHA hash functions, which offer military-grade encryption similar to that used by banks and VPNs for securing sensitive systems.

Therefore, if you are considering buying cryptocurrency in Canada, you can be reassured that the safety of your assets is well-addressed.

Is Bitcoin Legal in Canada? What about Other Cryptocurrencies?

Trading cryptocurrency is legal in Canada, and you can freely purchase and sell various digital currencies. When buying and selling crypto, it’s important to know that any profit made is taxable, similar to other investment forms.

Cryptocurrencies are considered commodities in Canada, and crypto transactions are treated as barter transactions. While you can buy, sell, and mine cryptocurrencies, they do not have the legal status of traditional investments.

Regarding perception, cryptocurrency can be likened to precious metals like silver or gold. When you sell cryptocurrencies, you may be subject to capital gains tax, calculated based on the price difference between purchase and sale, with only 50% of gains taxable.

To comply, you can report cryptocurrency transactions on your tax return using Schedule 3 of Form T1. Determine the value in Canadian dollars at the transaction time using reputable exchanges or market data sources. Failure to report or misreporting can result in penalties and interest from the CRA. Stay accurate and compliant to avoid complications.

Note that tax laws can change, so consult a qualified tax professional or the CRA for up-to-date guidance on compliance.

Final Thoughts on How to Buy Cryptocurrency in Canada

Buying and trading cryptocurrency in Canada is an exciting opportunity to participate in the growing digital asset market. You can easily start your crypto journey with various reputable crypto exchanges.

Whether you’re looking to invest in Bitcoin, Ethereum, or other cryptocurrencies, follow the steps outlined in this guide to make your first purchase. Take advantage of the secure and user-friendly platforms offered by top exchanges like Coinsquare, Newton, and Bitbuy.

Begin your cryptocurrency adventure today and unlock the potential of this innovative financial ecosystem. Don’t miss out on the opportunity to be part of the future of finance. Start buying cryptocurrency in Canada now!

FAQs on How to Buy Cryptocurrency in Canada

Can You Use Canadian Credit Cards to Buy Crypto?

Many 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 among the few that approve crypto purchases.

The Visa debit card for KOHO is one of Canada’s very few credit cards that lets users purchase crypto on some exchanges. If you want alternative crypto purchase options (aside from credit cards), you can try Interac e-Transfer, bank wires, direct purchases 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.

Are There Bitcoin ATMs in Canada?

Yes, there are. Vancouver will go down in history as the place with the world’s first Bitcoin ATM. Also, Canada has the most Bitcoin ATMs globally (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.