With Bitcoin gaining acceptance among investors, retailers, and the general public as the world’s first cryptocurrency, there’s no need for yet another explanation of what it is. Instead, what you need to know is how to buy Bitcoin in Canada today. So, here’s your quick 5-second and detailed 5-minute guide on buying and selling Bitcoin in Canada.
– In 4 easy steps!
With these simple steps, you can purchase Bitcoin on Coinsquare. However, if you require a more comprehensive understanding of the process, then the 5-minute guide to buying Bitcoin online is what you need. Sign up on Coinsquare today to start investing in Bitcoin.
– The More Detailed Version
If you plan to buy Bitcoin, you should have a clear idea of what you intend to do with it. Once you’ve purchased Bitcoin in Canada, there are three main categories that define the potential uses of your investment.
Are you buying Bitcoin as an investment or a digital asset? Cryptocurrency assets have emerged as a significant contributor to Canadians’ investment goals. Among institutional investors, approximately one-third have direct or indirect exposure to crypto assets, according to a 2022 study by KPMG.
For the general public, fewer Canadians are buying and selling Bitcoin and other cryptocurrencies. A 2023 Bank of Canada report found that 10 percent of Canadians own Bitcoin, down from 13 percent during the crypto mania in 2021. The Ontario Securities Commission (OSC) discovered similar numbers in its own May and June 2023 survey.
While it might seem that interest in Bitcoin is abating, the double-digit numbers are still impressive, considering that Canadians are saving and investing less at a time of inflationary pressures and slowing economic conditions. It highlights that those who are still able to save and invest view crypto as a valuable asset. With approximately 4 million Canadians owning crypto, it remains incredibly popular.
Investors can generally be categorized into two groups: short-term traders and those who buy and hold. Short-term traders purchase cryptocurrency at a lower price and wait for a price increase to cash out with a profit, while long-term investors (HODL’ers) buy and hold their crypto assets. Bitcoin prices and other digital currencies are currently experiencing a period of volatility, and investing in them carries similar risks to investing in volatile stocks or fiat currencies.
You can store your Bitcoin on a cryptocurrency exchange in Canada or use your own software or hardware wallet. When selecting a crypto exchange, it is important to look for security measures such as cold storage. You can transfer your Bitcoin to a wallet, such as a software wallet (such as a desktop or mobile wallet) or a hardware wallet (such as a paper wallet or USB drive containing a unique address on the blockchain).
While Bitcoin remains the most widely recognized cryptocurrency worldwide, there are a variety of other cryptocurrencies available. Coinsquare provides the opportunity to purchase major cryptocurrencies such as Ethereum, Litecoin, and Bitcoin Cash with Canadian dollars; however, smaller cryptocurrencies may only be accessible by exchanging Bitcoin. Ethereum is now the second-largest cryptocurrency in the world, controlling about a fifth of the market. It possesses lots of utility and is a critical component for Decentralized Finance (DeFi), which has become integral to the entire crypto industry in the last couple of years. Coinsquare’s all-in-one platform facilitates CAD-crypto trading and offers over-the-counter services tailored for high-net-worth individuals and businesses.
As Bitcoin continues to grow in popularity, an increasing number of retailers are now accepting it as a means of payment. While it has previously been viewed as primarily an investment product, companies in various sectors, including tech, travel, and e-commerce, are now recognizing the potential of Bitcoin as a legitimate currency. Consumers can use Bitcoin to purchase goods and services online, although caution should be exercised when sending Bitcoin to individuals or organizations, as these transactions cannot be reversed.
For those new to Bitcoin payments, it may be best to initially purchase from well-known retailers until they become comfortable with the process. To send payment, one must obtain the retailer’s blockchain address.
It’s important to conduct thorough research before selecting a Bitcoin purchasing location. There are numerous cryptocurrency exchanges available in Canada and around the globe that provide a variety of features, payment options, and transaction fees. Furthermore, they offer alternatives such as peer-to-peer transactions and Bitcoin ATMs.
Compared to other options, exchanges provide enhanced convenience and security. Transaction or trading fees may be higher than peer-to-peer transactions but lower than those charged by Bitcoin ATMs, albeit with some variability. International exchanges may not benefit Canadians as few accept Canadian currency, thus necessitating high exchange fees. Additionally, international exchanges often do not allow users to convert Bitcoin back into Canadian dollars, and some even impose restrictions on the amount of Bitcoin that Canadians can purchase.
However, by opting for a Canadian crypto exchange, individuals can receive the following benefits:
Coinsquare provides an easy and affordable option for purchasing Bitcoin in Canadian dollars, with low transaction fees and an intuitive interface for new traders. The web app has undergone a new-and-improved UI redesign to simplify the process of trading CAD for Bitcoin. Additionally, Coinsquare offers reliable customer support for any issues that may arise.
The newly expanded range of services and improved customer support reflects Coinsquare’s commitment to creating a secure Bitcoin platform accessible to everyone, regardless of technical knowledge. For advanced Bitcoin traders, Coinsquare also provides quick and easy Bitcoin purchases and withdrawals. As one of Canada’s most convenient on and off-ramps for Bitcoin, Coinsquare has bridged the gap for those looking to buy Bitcoin with Interac from a Canadian bank.
Despite skepticism from the Canadian banking sector towards cryptocurrency, Coinsquare and other Canadian crypto exchanges make it straightforward to purchase Bitcoin in Canada. Overall, Coinsquare has succeeded in creating a safe and accessible platform for buying Bitcoin.
Bitcoin ATMs in Canada provide a way to purchase Bitcoin anonymously, but the high fees associated with these ATMs should be considered. You may have encountered Bitcoin ATMs at your local mall or convenience store, but before you decide to buy Bitcoin, research the transaction fees that various platforms charge. Different fees may be imposed on currency deposits and withdrawals, Bitcoin deposits and withdrawals, and buying and selling. Coinsquare offers free BTC withdrawals, as well as withdrawals of other cryptocurrencies such as ETH, LTC, DOGE, XLM, EOS, and BCH. With lower fees, trading Bitcoin on Coinsquare is more affordable than ever, and their platform is convenient and secure.
To save money on high fees charged by international exchanges that don’t accept Canadian debit, Canadian Bitcoin buyers can opt for a Canadian cryptocurrency exchange that allows the purchase of Bitcoin with Interac or eTransfer. With international exchanges, funding purchases with a credit card can incur high fees and take a long time to confirm. Furthermore, these exchanges often require you to exchange CAD for USD, resulting in even more fees. Choosing a Canadian cryptocurrency exchange will be a better deal for those who wish to buy Bitcoin using Canadian dollars.
While they are a relatively new investment tool in the United States, investors in Canada have already had the opportunity to invest in Bitcoin and Ethereum through exchange-traded funds (ETFs) for the past few years. These ETFs include spot-Bitcoin ETFs and physically settled funds, as well as mutual funds that invest in Bitcoin.
Bitcoin ETFs offer investors a convenient way to enter the Bitcoin market without directly purchasing Bitcoin itself. Instead, these ETFs allow investors to purchase a stock that tracks the price of Bitcoin, providing a simpler and potentially safer way to invest in cryptocurrency through traditional stock exchanges. This approach is particularly attractive to beginner Bitcoin buyers.
Coinsquare has made the sign-up process effortless for its users. All you need to do is verify your email address, phone number, and a few other pieces of information. The platform has an automated identity verification process that ensures the quick completion of the KYC regulations. In case Coinsquare requires additional details, users can provide a government photo ID for verification. Once your identity is confirmed, you can log in and start trading Bitcoins immediately.
KYC regulations are mandatory in Canada to prevent money laundering across various sectors, including real estate, securities, casinos, precious metal dealers, and cryptocurrencies. Thus, it is imperative to confirm your identity when registering with a Canadian crypto exchange. Coinsquare streamlines the entire process, making it simple and efficient for its users.
One of the most challenging aspects of buying Bitcoin for Canadians is finding a way to fund their account without paying high fees. Many international exchanges only accept credit cards, which can come with exorbitant processing times and transaction fees. However, a Canadian crypto exchange like Coinsquare can make all the difference, providing a variety of deposit methods to choose from.
Many Canadians find themselves at a disadvantage when it comes to using credit cards to buy Bitcoin. Credit card companies often charge high transaction fees and treat Bitcoin purchases as cash advances, resulting in even higher interest rates. This is on top of any fees charged by the cryptocurrency exchange. As a result, finding alternative payment methods is essential.
Fortunately, Coinsquare offers several different payment options to fund your account, each with its own processing times and fees. One popular option for Canadians is Interac e-Transfer, which has a deposit fee of 0% and typically takes only 30 minutes to process. Wire transfers are also a great option for larger deposits, with no maximum deposit amount and a processing time of 1-5 business days.
Another advantage of Coinsquare is the ability to deposit and withdraw cryptocurrencies directly. While the processing times, deposit minimums, and withdrawal fees vary depending on the network, Coinsquare does not charge a fee for crypto deposits and has no maximum limit. This makes it easy for those who already hold cryptocurrencies to use them to fund their account.
When it comes time to sell your Bitcoin, Coinsquare makes the process as easy as buying. You can withdraw your Canadian dollars back to your bank account using an Interac eTransfer or wire transfer. This is a major advantage over international exchanges that may not allow you to transfer money to and from your bank account, making it challenging to cash out your cryptocurrency holdings.
A Canadian crypto exchange like Coinsquare can be a game-changer for anyone looking to buy Bitcoin in Canada. With a variety of payment methods, easy-to-use interfaces, and fast processing times, it’s no wonder why so many Canadians choose Coinsquare to fund their cryptocurrency investments.
After purchasing Bitcoin, you will need to decide where to store it. Many exchanges, including Coinsquare, offer the option of keeping Bitcoin on their platform. At Coinsquare, customer coins are safeguarded in two ways. Firstly, 2-Factor Authentication (2FA) is required for logging in and performing actions with the account, with text-based authentication or Google Authenticator available for added convenience and security.
Secondly, Coinsquare has implemented a cold wallet storage policy, keeping over 90% of customer funds in cold storage to deter cyber-criminals. The company conducts regular Proof-of-Reserve audits and has surpassed its own cold storage policy, achieving an average cold wallet storage of 97.59% across all assets in 2023.
While storing coins on the exchange is convenient, many Bitcoin buyers opt for their own wallets to increase security. Two types of Bitcoin wallets are available: hot and cold.
Hot wallets, also known as software wallets, remain connected to the internet. The three primary categories of hot wallets are online, mobile, and desktop.
Cloud-based online wallets allow you to easily access your Bitcoin from any internet-enabled device and make payments. However, these wallets are more susceptible to security breaches and may require additional security layers. Additionally, there have been reports of scamming users of online wallets.
Mobile wallets are phone applications that facilitate Bitcoin payments at stores. While they are generally safer than cloud wallets, the primary security risk is the loss or damage of your phone.
Desktop wallets are downloaded onto your computer and offer a simple way to store and access Bitcoin. However, they are vulnerable to viruses and hacking and may be affected by physical damage to your device. It’s crucial to research security measures to protect your funds when considering online, mobile, or desktop wallets.
To protect your coins from potential hackers, storing them in cold storage is the most secure option. However, this method is not without its physical risks, as any loss or theft of the cold wallets can result in permanent loss of funds. They are also susceptible to physical damage or destruction from unforeseeable events like fire or flood. Cold wallets store your public and private keys, and the two most common types are hardware wallets and paper wallets. However, any item that can hold your keys can be used for cold storage.
Hardware wallets, which keep your private key offline, offer the best balance between convenience and security. The longer your coins stay connected to the internet, the greater the chance of vulnerability to potential hacks. When buying Bitcoin, it is important to research and ensure compatibility between your hardware wallet and your web interface. Though hardware wallets may be more expensive, they provide the highest level of security.
Paper wallets are one of the most secure ways to store Bitcoins offline. Simply writing or printing off your public and private keys onto paper provides a secure storage method. QR codes can also be used for added security. It is important to keep paper wallets in a safe place, such as a safety deposit box at a bank, as paper can degrade or be lost in a fire.
Before investing in Bitcoin, take the time to research and explore both internet-based hot wallets and hardware cold wallets to find the best option for your needs. It is also important to be vigilant and triple-check any public addresses before sending Bitcoin, as blockchain transactions are irreversible. Once the coins have been sent, they are permanently gone. Safeguarding your cryptocurrency is crucial for protecting your assets and financial future.
Given the prevalence of Bitcoin in the digital economy, a wide variety of channels exist in Canada to buy and sell it. While Bitcoin wallets and centralized cryptocurrency exchanges remain the most widespread means of conducting transactions, other options include buying and selling Bitcoin and other cryptocurrencies through conventional online brokers and money transfer applications. The need to scour through sites like LocalBitcoins and Facebook Marketplace to locate buyers and sellers has dissipated. What was once a limited niche market has rapidly expanded to the broader economic landscape.
For anyone buying or selling Bitcoin, understanding the tax implications of your cryptocurrency investments is crucial for responsible financial planning and compliance with Canadian tax laws. With specific regulations concerning cryptocurrencies like Bitcoin and Ethereum, Canada has unique rules regarding how these digital assets are taxed.
In Canada, Bitcoin and Ethereum are not recognized as legal tender but instead are treated as commodities by the Canada Revenue Agency (CRA). This distinction carries significant implications for the taxation of transactions involving digital assets.
Although buying and holding cryptocurrencies has no immediate tax implications, the tax implications must be considered when you sell or use them to purchase goods or services. The CRA requires that any capital gains or losses resulting from the sale or other disposition of cryptocurrencies be reported on your income tax return.
It is important to note that the duration of holding a cryptocurrency does not affect how your gains are taxed in Canada. Unlike other countries where long-term capital gains might be taxed differently, Canada does not differentiate between short-term and long-term gains for tax purposes. All capital gains are treated equally, whether you held the cryptocurrency for a few months or several years.
Keeping detailed records of your cryptocurrency transactions is essential for accurate tax reporting. Tracking the dates of transactions, purchase and sell prices, and any fees incurred will help you calculate your capital gains or losses and ensure compliance with Canadian tax laws. Coinsquare offers a reporting tool enabling users to create and download comprehensive annual activity reports for their accounts, making it easy to stay on top of cryptocurrency investments.
By understanding that Bitcoin and Ethereum are treated as commodities and knowing how capital gains are taxed, you can make informed decisions and avoid surprises during tax season. Consulting with a tax professional for personalized advice tailored to your situation is always advisable.
Now that you know how to purchase Bitcoin in Canada, you can get started by signing up for Coinsquare. Our platform offers a user-friendly currency converter that allows you to easily find out the value of Bitcoin, Ethereum, Bitcoin Cash, and Litecoin in Canadian dollars at any given time. Unlike traditional investments like gold coins, you have the flexibility to purchase Bitcoin and other cryptocurrencies in fractions. By inputting the desired amount of money you want to invest, our interface will display the amount of Bitcoin you will receive in return, along with any associated fees. Our pre-purchase transaction pricing calculator allows you to plan ahead and have a clear understanding of the costs and rewards.
Keep an eye on Bitcoin prices and fluctuations in the cryptocurrency market, particularly if you are considering investing in it. Cryptocurrency prices are notoriously volatile, and it is important to prepare yourself for sudden changes. This unpredictability can work in your favour if you can purchase Bitcoin at a low price and sell it when the price rises.
Share this guide with your friends and family and help Coinsquare become the go-to Canadian cryptocurrency exchange. Creating an account is quick and easy. Fund your account, purchase Bitcoin, and rest assured that your funds are stored securely. With Coinsquare, buying Bitcoin in Canada has never been simpler.
Trade some of the most in-demand cryptocurrencies at some of the best prices in Canada.
