How to Buy Bitcoin in Canada: Step by Step Guide
Canada is one of few countries that immediately accepted and quickly regulated cryptocurrency. Even though keeping track of changes in the crypto industry is a challenge for all governments and investors, the Canadian crypto market remains liquid.
But where can you buy Bitcoin in Canada, and how to buy Bitcoin in Canada? These are the questions many Bitcoin newbies are asking. Everything starts with the crypto exchanges, as it's the best way to buy Bitcoin in Canada.
Choosing the crypto exchange is easier when you understand the Canadian Bitcoin laws and what makes an exchange worth your time. In this article, we'll guide you through the process of learning how to buy Bitcoin in Canada and choosing brokerages and digital wallets.
Bitcoin Defined
Before we talk about the best place to buy and sell Bitcoin in Canada, we should reflect on the concept of cryptocurrency and how it functions. Everyone is talking about Bitcoin these days, but many aren’t sure what it actually is.
Other terms for cryptocurrency are crypto assets, digital currency, or even virtual money. Indeed, Bitcoin is a decentralized and digital form of money that runs on blockchain technology and is completely open-sourced.
One of the biggest appeals of Bitcoin and the reason why so many have flocked to it is the lack of third-party influence, such as banks and governments. There are no intermediaries as Bitcoin uses a peer-to-peer network system to facilitate transactions.
Historically speaking, Bitcoin is not that old. It first came into existence in 2009 as a direct response to the 2008 global financial crisis. Apart from blockchain technology, it's crucial to understand that cryptocurrency has private and public keys in terms of how Bitcoin works.
They work together to allow users to access their funds and initiate transactions. Finally, it's important to emphasize the importance of Bitcoin miners. They are the members of the blockchain who confirm transactions and create new Bitcoins.
Is Bitcoin Legal in Canada?
You might be in a hurry to find out where to buy Bitcoin in Canada, but to properly start your search, we first have to look at crypto laws in the country. While Bitcoin isn’t legal tender in Canada, investing, trading, and mining Bitcoin is entirely legal.
The fact that it isn’t legal tender and has a decentralized system means the Canadian government doesn't oversee cryptocurrencies.
Coinbase offers users a non-custodial wallet where you can choose a slow, normal, or fast transaction fee. Furthermore, it’s crucial to remember that all cryptocurrency transactions are irreversible. If you’re a beginner, make sure to take your time entering all the information when paying.
Bitcoin and other digital currency are defined as security, which means that buying Bitcoin in Canada is like buying shares, stocks, bonds, and other tradable financial assets.
Therefore, Bitcoin is taxable in Canada and has been since 2013. Whether you’re making profits from Bitcoin as a business investment or you’re a Bitcoin trader, you’ll need to pay taxes.
The Canada Revenue Agency (CRA) even went so far as to create a cryptocurrency unit to ensure crypto profits are reported accurately.
The final point about the legality of Bitcoin revolves around the matter of how to buy Bitcoin in Canada. Where do Bitcoin exchanges stand in terms of crypto regulation? When thinking about where to buy Bitcoin in Canada, we have to address the regulation around crypto brokerages.
Since June 2021, all crypto exchanges in Canada must register with the Financial Transactions and Reports Analysis Centre of Canada (FinTRAC.)
Additionally, they have to follow the Virtual Currency Travel Rule, which requires the exchanges to keep track of all cross-border crypto transactions. Entities running the Bitcoin exchanges are also obligated to submit reports and maintain detailed records.
How to Buy Bitcoin in Canada – Step 1
The best way to buy Bitcoin in Canada is to create an account at one of the better Bitcoin exchange platforms and start from there.
When it comes to the details on how to buy Bitcoin in Canada, we’ll show you what to do using Coinbase as an example. For many, it’s the best exchange to buy Bitcoin in Canada.
- Go to Coinbase and click on the "Get Started" button.
- You will need to enter the following information: Legal name, email address, password, and location.
- You will need to read and agree to the User Agreement and Privacy Policy.
- Select "Create Account," and you'll receive a verification email in your inbox.
- After verifying your account via email, you'll be asked to submit a government-issued photo ID and answer several questions about your occupation, source of funds, and reasons for using the platform.
Once you finish the registration process, you'll have to link a payment method. In the case of Coinbase, Canadian users can choose to add a debit card or their PayPal account.
Best Place to Buy and Sell Bitcoin in Canada
The steps required to register for a crypto exchange may vary slightly from one platform to another, but they’re all essentially the same.
However, the quality of services provided by the platforms is not. Hence, it's crucial to figure out the best way to buy Bitcoin in Canada and pick the platform that will work for you. Here are a few options to consider.
Binance
It's the biggest crypto exchange platform globally and the best exchange to buy Bitcoin in Canada whether you’re a novice or a savvy investor.
Due to its trading volume and liquidity, it's in a position to offer low transaction fees and many different coins to users.
Canadian investors can even use Binance for SWIFT transfers but only for USD and not CAD. It also offers a secure digital wallet for storing funds and an option to open a savings account with them.
Bitbuy
One of the best aspects of Bitbuy is that it’s a Canada-based crypto exchange and has been around since 2016. If you’re wondering where to buy Bitcoin in Canada, Bitbuy is typically the go-to answer.
It’s fully registered and regulated by FinTRAC. As a platform, it's a reliable and the best place to buy and sell Bitcoin in Canada for countless users.
It’s an excellent choice for beginners and even supports e-transfers to deposit CAD. It’s available on the web and as a mobile app.
Kraken
Where can you buy Bitcoin Canada and be sure you're in the right place? For those who have been into Bitcoin since the beginning, that place is the Kraken crypto exchange.
This exchange has an excellent reputation for ease of use, which makes it ideal for crypto novices. You can earn passive rewards by utilizing staking coins too. The platform offers 24/7 support and a high trading volume with access to many cryptocurrencies.
Gemini
Some crypto investors will claim that the best exchange to buy Bitcoin in Canada is Gemini. There is ample evidence to support this claim, especially when considering competitive transaction fees and features such as asset price alerts.
Furthermore, you can use the Gemini mobile app to spend crypto in places where it’s accepted. Overall, this is one of the biggest crypto exchanges that are easy to navigate. Plus, they offer a non-custodial wallet for their users.
Coinbase
Of course, there’s Coinbase – a platform that’s nearly synonymous with crypto investing. This exchange is US-based but has a strong presence in Canada.
So, if you’re asking where to buy Bitcoin in Canada, Coinbase is the top choice for most investors. It supports all the most popular digital coins such as Bitcoin, Ethereum, Litecoin, and countless others.
You even have the option of getting free crypto if you stake your coins. Their non-custodial wallet is one of the best hot wallets available for storage, and they accept PayPal as a payment method.
How to Buy Bitcoin in Canada – Step 2
Once you open an account at one of the exchanges, thoughts about what can you buy with Bitcoin in Canada might pop into your head. But that's skipping a step, as opening a Bitcoin wallet should be the next course of action.
Most crypto exchanges offer custodial or hosted wallets for their users. While these can be an excellent option for absolute beginners, it also means not having access to your private keys and total control of your funds.
On the other hand, using non-custodial wallets gives you complete control and all the responsibility to keep your private keys safe. Fortunately, many exchanges also provide non-custodial wallet options for their users.
But when it comes to how to buy Bitcoin in Canada and safely store it, there is another consideration to keep in mind. As a crypto investor in Canada, you can choose between a software or hardware wallet for storage.
Software wallets are typically free, and apart from being one of the services offered by the brokerages, there are independent options too.
Hardware wallets are physical devices that resemble USB flash drives and work as literal keys that give you access to your Bitcoins. Choosing the right Bitcoin wallet is essential. Here are a few excellent choices to keep in mind once you've figured out where to buy Bitcoin in Canada.
- Trezor One: This is a highly secure hardware wallet suitable for advanced crypto investors who don't want to break the bank.
- KeepKey: Also a hardware wallet, it’s typically offered as an alternative to more prominent brands in the business. It's virus-proof, affordable, and secure.
- Coinomi: This is a free software wallet with comprehensive coin support and free mining fees. It's UK-based but available in Canada.
- Armory: If you're only focused on Bitcoin, this is one of the best wallets for Canadian users. It's free, and even though it's a software wallet, it offers cold storage.
- Coinbase: A non-custodial and decentralized wallet with easy access that can be used to pay merchants that accept digital currency.
The final step in learning how to buy Bitcoin in Canada is managing your investment. Keep in mind that investing in Bitcoin has always been and still is a risky business.
Some might even wonder if Bitcoin is considered a good or bad investment. However, the only real answer can be found in assessing your risk tolerance.
Buying Bitcoin doesn’t mean you have to go big or invest right away. It’s perfectly fine to start with $20-$30 and wait until the price decreases. However, there are three major investment strategies that every new crypto user should know about.
Bitcoin “HODL”
This is a well-known investment principle that essentially describes buying Bitcoin and keeping it forever. HODL stands for "hold on for dear life." It means you're not letting go of your coins unless the value of Bitcoin grows exponentially.
Holding Bitcoin Long-Term
It’s a route quite similar to HODL but doesn’t assume users will keep the coins forever. The idea behind this strategy is to keep Bitcoin safely in your wallet until you feel it’s time to sell. While this is a long-term approach, it’s implied that the intention is to sell eventually.
Trading Bitcoin in the Short-Term
Crypto novices and some expert traders prefer to take advantage of Bitcoin’s volatility. As the prices go up and down, Bitcoin traders buy and sell coins to maximize their profits. It's a more dynamic way to invest in Bitcoin and requires more skills and time than other investment strategies.
What Can You Buy With Bitcoin in Canada?
If you have made some profits investing in Bitcoin, perhaps you’re wondering what can you buy with Bitcoin in Canada?
Many merchants accept Bitcoin as payment, starting from local merchants to big companies. If you’re shopping online, you can use your Bitcoins to pay for Microsoft products, Twitch, ExpressVPN, and many others.
Also, in Canada, you can buy KFC with Bitcoin if you use the BitPay platform, and the food will be delivered to your address.
Buying Bitcoin Canada Made Easy
One of the most significant advantages of investing in Bitcoin is its potential for growth. That's why the number of crypto users is on a continuous rise around the world. Another major benefit is that Bitcoin has the potential to bank the unbanked because a bank or government does not control it.
Above all, Bitcoin is a secure and fast way to transfer funds, so it's natural to be curious about where can you buy Bitcoin in Canada. The great news is that Canadian citizens have access to numerous reliable crypto exchanges, digital wallets, and places to spend their coins.
The process of getting started with Bitcoin is straightforward and only has three crucial steps. All you have to do is create a Bitcoin account, get a crypto wallet, and start managing your investment.