How to Buy Bitcoin in Canada

By: Alex Dabek

Last Updated: Jul 2021

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If you're getting into crypto for the first time it can be overwhelming. The good news is, buying Bitcoin is relatively easy and today there are more options than ever.

There are two main places to buy Bitcoin in Canada:

  1. Through an Online Crypto Exchange (Newton, Shakepay, NDAX, etc)
  2. Through a Bitcoin ETF in your Stock Brokerage (Wealthsimple Trade, Questrade, etc)

A third option could be through a Bitcoin ATM but this is less convenient. In this post, you'll learn about the first two options and the pros and cons of both. 


Option 1: Buying Bitcoin on a Crypto Exchange

Purchasing through a crypto exchange lets you hold Bitcoin directly, store it yourself and send it to different wallets as you wish. By owning the Bitcoin, you become your own bank and have full flexibility with what you do with it. This also comes with more responsibility such as learning how to store it and how to not lose it. 

Pros & Cons of Crypto Exchanges:

  • Beginner-friendly options: Most Canadian exchanges are simple and easy to use
  • You own the Bitcoin: You have full flexibility so you can store it yourself, send it to different wallets and much more
  • Access to altcoins: If you want, you'll be able to trade for 1000's of other cryptocurrencies
  • You can't put it in tax-sheltered accounts: The only way to get Bitcoin in your TFSA or RRSP is through an ETF
  • More responsibility: You're responsible for learning how to store it and not lose it
  • Bigger learning curve: For the same reason above, there is more to learn compared to just holding the ETF

Best Canadian Crypto Exchanges

If you want to buy Bitcoin directly there are many crypto exchanges in Canada. After comparing 11 platforms these are my top two recommendations for buying Bitcoin cheaply and easily:

Newton Crypto Exchange

Low cost:

1. Newton

Purchase fee:

0.69%

Shakepay Exchange

Beginner-friendly:

2. Shakepay

Purchase fee:

1.43%

Opening An Account On A Crypto Exchange

To sign up for a Canadian crypto exchange, you will need to provide personal info and verify your account. This is normal due to Canadian laws and regulations and it's similar to opening a bank account or signing up for a stock brokerage. 

Once your account is verified, which can take a few hours or days, you can deposit money instantly via e-transfer and then you will be able to buy Bitcoin.

Storing Your Bitcoin

Once you buy Bitcoin on a crypto exchange you have to decide how to store it. You can leave it on the exchange but that's not recommended for large amounts. The safest way to store your crypto is on a hardware wallet.


Option 2: Buying a Bitcoin ETF

Unlike buying Bitcoin directly, a Bitcoin ETF can be put in tax-sheltered accounts like a TFSA or RRSP. All that's required is a stock brokerage account. You also don't have to worry about setting up wallets and learning how to store your Bitcoin safely. The downside is you don't own the Bitcoin directly, you just have exposure to the price. You can't send the Bitcoin anywhere and every ETF has management fees that go to the fund.

I made this video explaining everything about buying crypto and Bitcoin in your TFSA:

Pros & Cons of Bitcoin ETFs:

  • Tax-free gains - The major advantage of a Bitcoin ETF is you can hold it in your TFSA or RRSP. You can not do this by buying Bitcoin directly
  • Convenient - If you already have a stock brokerage account you don't need to go through the process of signing up for a crypto exchange
  • Easy for beginners - If you're already familiar with your stock brokerage account you don't have to learn what crypto wallets to download, how to send crypto and more
  • You don't own the Bitcoin - There's a phrase in crypto, "not your keys, not your coins." If you hold through a bank or stock broker someone else owns the crypto and not you
  • Management fees - Bitcoin ETFs have a yearly management fee that goes to the fund and it ranges from 0.40% to 1.00% 
  • Less flexibility - Since you don't own the crypto you can't transfer it, trade it for other altcoins or do anything else. It's stuck in your brokerage account 

Different Bitcoin ETFs

At the time of this writing, 5 Bitcoin ETFs have been approved in Canada:

Name

Symbol

Mgmt. Fee

Website

CI Galaxy Bitcoin ETF

TSX: BTCX

0.40%

Evolve Bitcoin ETF

TSX: EBIT

0.75%

Purpose Bitcoin ETF

TSX: BTCC

1.00%

3iQ Coinshares Bitcoin ETF

TSX: BTCQ

1.00%

Ninepoint Bitcoin ETF

TSX: BITC

0.70%

Table last updated on May 23, 2021

Best Stock Brokerages

To buy any of the above Bitcoin ETFs, you need an online stock brokerage. There are many options in Canada but these are my top two recommendations for low fees and good features:

Wealthsimple Trade Crypto Logo

Beginner friendly

1. Wealthsimple

Questrade

Intermediate

2. Questrade

Review soon

Signing Up For A Stock Brokerage

To sign up for a stock brokerage, you will need to provide personal info and verify your identity. This is normal due to Canadian laws and regulations so be ready to spend 10-15 minutes filling out your details.

Once your account is verified, which can take a few hours or days, you can connect your bank account and deposit money which will generally take a few days to arrive. 


More Info

Is Buying Bitcoin Legal in Canada?

In short, yes it is perfectly legal to buy Bitcoin and cryptocurrencies in Canada. The Government of Canada's website says, “You can use digital currencies to buy goods and services on the Internet and in stores that accept digital currencies. You may also buy and sell digital currency on open exchanges.”

Is Bitcoin Taxed in Canada?

Yes, taxpayers are required to pay tax on Bitcoin and digital currencies in Canada. The CRA published a crypto tax guide with more info. A taxable event includes:

  • Trading or exchanging one cryptocurrency for another
  • Converting cryptocurrency to fiat currency
  • Using crypto to buy goods or services
  • Selling or gifting cryptocurrency

Can I Buy Bitcoin for $1?

The short answer is yes, you can invest any amount of money into Bitcoin. This is because one Bitcoin can be divided into 100,000,000 satoshis. So you can buy $1 of Bitcoin or any amount you like. However, if you're buying Bitcoin on an exchange sometimes the exchange has a minimum limit set.

Can I Buy Bitcoin with a Credit Card in Canada?

Yes, Canadians can buy Bitcoin anywhere a credit card is supported such as Binance, Netcoins and more. Keep in mind, the fees can range from 2%-5% or more and it's generally an expensive option. Also, keep in mind your credit card company may block the transaction because it's "suspicious." In this case, you'll have to call your credit card company to fix this.

The Bottom Line

Canadians have many Bitcoin ETFs to choose from or they can buy Bitcoin directly off a crypto exchange. Purchasing through a crypto exchange lets you actually own the Bitcoin so you can send it to different wallets as you see fit. Purchasing a Bitcoin ETF can be put in a tax-sheltered account like your TFSA but you do not own the Bitcoin. Both of these have pros and cons which you have to decide for yourself.

At the end of the day the choice is yours if you want to hold Bitcoin yourself, have it in a tax-sheltered account out of mind, or a mix of both. Hopefully this post helped you understand the pros and cons of each option.

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