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:
- Through an Online Crypto Exchange (Newton, Shakepay, NDAX, etc)
- 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:
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:
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:
Different Bitcoin ETFs
At the time of this writing, 5 Bitcoin ETFs have been approved in Canada:
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:
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.
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.