Buying Bitcoin in Canada: Full Guide
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Bitcoin is the world’s leading cryptocurrency; virtual money designed for the online transaction without having to go through financial institutions to mint them. Created in 2009 it was only heard of or talked about by a handful of people for a long while. Then, over the years, its value started to slowly increase (from the equivalent of 0.49 CAD in 2010 to over 17,000 CAD at the beginning of 2018), as did its popularity. Nowadays, there are very few who haven’t heard of Bitcoin!
The complicated part comes with knowing how and where to buy it, as standards differ from country to country. In Canada, Bitcoin has a major presence and is even accepted in lieu of fiat currencies (“regular” money) with certain brands and companies. From big names like KFC or smaller independent businesses like Quantum Properties.
How To Buy Bitcoin In Canada?
When you are starting your crypto trading journey, it’s best, to begin with a local exchange. They will have information in the correct language(s) for a start, as will their customer service department. You will want to make use of that to get your rookie-level questions answered so you can hone your trading skills. Once you’re comfortable and confident that you know what you’re doing in Bitcoin trading, that’s when you can move onto one of the worldwide exchange sites. Here is where you’re likely to make more of a profit on your investments, but you can also widen your asset portfolio. That means other investments like Forex and commodities. The customer support departments in the global sites are going to be prepared to answer the more advanced queries you may have.
Canada has no shortage of places to buy Bitcoin. However, sometimes too much choice of cryptocurrency exchanges can be a bad thing. It can be confusing or daunting. To help you make your decision, here’s a list of local exchanges to buy Bitcoin in Canada:
This Toronto-based exchange was founded in 2014. It deals not only in Bitcoin but later also in other leading cryptocurrencies such as Ethereum and Litecoin. However, unlike many of its cousins in the crypto market, it also allows users to trade in gold and silver. In terms of trading fees, they only charge small percentages of the final settlement amount. It ranges between 0.1% and 0.4%, depending on the asset and the liquidity.
The verification process is very simple, as it only requires an email address and a few basic details such as name and address. However, this does inhibit the possibility of anonymous trades – primarily for users’ own security.
There are several payment options for both deposits and withdrawals, ranging from wire transfers, credit cards to flexepin. However, all withdrawals and deposits incur surcharges of between 1-2% for withdrawals and 0.5-10% for funding deposits. A detailed list of all payment methods and fees is featured on their website. Coinsquare is a good place for Canadians to start their Bitcoin journey since it is so easy to use. All the information you would require is at your fingertips, in a lot of detail to prevent confusion.
- Detailed information – easy to understand.
- Variety of options for trading – cryptocurrencies and other commodities.
- Simple verification process.
- Competent customer service.
- Fees incurred for all trading, withdrawals, and deposits.
One of Canada’s leading cryptocurrency exchanges launched back in December 2013. Based in Vancouver, they are also responsible for Bitcoin ATMs making their way across Canada (we’ll get to those later). It deals primarily in Bitcoin, Ethereum, and Litecoin, plus Bitcoin Cash and Bitcoin Gold, all trading against CAD. Setting up an account is fairly easy, with only the usual name, address and email address to fill in. While it is unregulated, it is reinforced with multiple security measures to protect your assets and information. Worth noting is the fact that withdrawals incur high fees – $20 CAD in addition to 2% of the settled amount. Regarding ease of use, there are simpler exchanges than QuadrigaCX out there. And when you do encounter a problem, customer support is ticketed. A notably slow way of raising and resolving queries.
- Easy to set up an account.
- Trade with both crypto and fiat currencies.
- High trading and withdrawal fees.
- Unregulated site.
- Customer support uses only a ticket system.
Another Toronto-based exchange that specializes in Bitcoin, as well as Bitcoin Cash, Ethereum, and Litecoin. Besides being a brokerage, they are soon to provide both banking services, i.e., a means of storing Bitcoin on their site, and enabling merchants and businesses to accept Bitcoin in lieu of fiat currencies for payment.
Their verification is lengthy but secure. Bitbuy requires not only a passport or driver’s license but also two proofs of address AND a picture of the account holder holding the government-issued ID. That’s an extreme not seen in many exchanges. But all done for the sake of the users’ security. While it does accept CAD via the usual payment options like credit card and wire transfer, there is little information available on withdrawal and trading fees before signing up for an account. As of February 2018, fees are only incurred at $2 CAD per withdrawal.
- Several payment options available.
- Fees only incurred for one specific payment method.
- Canadian dollars useable.
- Strict verification requirements for assured security.
- Limited cryptocurrency options.
- Limited information available on the website before sign-up.
If and when you become more confident on your Bitcoin journey to go beyond the local trading, there are a fair few global sites that accept Canadian users, enabling you to buy Bitcoin in Canada easily. We listed them below;
Cex.io >> This is a London-based exchange founded in 2013. Known for its customer service with fast response time. Additionally, their security systems are so competent that they currently have a 0% user funds theft rate. However, there is a limitation on the fiat currencies, especially as CAD is not one of them. They also have some high trading fees.
Localbitcoins >> –This is a site that allows you to trade with fellow investors near you. Its facilities make cash transactions possible. However, if you’re going to do this, you should triple-check your security. It does away with minimum and maximum transfers that you will find on other sites. Also, most usefully, it deals in Canadian dollars, making it a go-to alternative if you’re struggling on the worldwide exchanges.
Coinbase >> an exchange with an internationally good reputation. It’s based in the US, and among the many fiat currencies it trades in, Canadian dollars are catered for. Suitable when you’re ready to tackle the global market. Its customer service carries a slightly less positive rep, in addition to offering limited payment options.
Changelly >> founded in 2013 and based in Prague, this exchange offers over 35 cryptocurrencies to trade alongside nearly 90 fiats. Its one drawback is that its purchase rates are so much higher in comparison to other exchange platforms.
Kraken >> this exchange is among the older ones, having started in 2011. With its experience comes respect and a reputation, well regarded by even regulated banks in the Far East and Europe.
Coinmama >> a multi-language site dealing in Bitcoin by the fraction. On the downside, it does have limited payment options, including no access to PayPal or the ability to link your bank account. It also does not trade directly in CAD, which may be a problem for the rookie investor.
Payment Methods For Buying Bitcoin In Canada
Every exchange has a variety of options for payment, whether that means making deposits to fund your account or withdrawing your profits, choosing the right one depends on your preferences and circumstances, but some have more pros than cons, compared to others.
- Bank Card Payment (including 2Checkout, Braintree, Simplify Commerce, Authorize.net, SagePay, Stripe, Netbanx, WorldPay, Moneris) – this method is available on pretty much all exchange sites, and usually there is a low minimum amount for both withdrawals and deposits. In addition, they rarely incur a surcharge for payments to or from an account, though this is dependent on the exchange site.For example, it is free onBitBuy, whereas Coinsquare charges a small percentage.
- Credit card –you may have heard that banks in the US and the UK have banned buying cryptocurrencies with credit cards. Good news – Canada is currently imposing no bans on credit card purchases of cryptocurrencies. However, make sure you read the fees of your chosen exchange site first – some exchange sites can charge a heavy percentage of the settled amount, even the minimum can be quite high. On Coinsquare, for example, the minimum deposit from a credit card is $100 CAD, to which they apply a 10% fee.
- Debit card – debit cards are convenient in the sense that the money in the account belongs to the account holder (as opposed to being indebted like with a credit card). However, they’re not being controlled and monitored by banks or financial institutions which opens them up to greater fraud risk if the correct security steps are not taken. Fortunately, most exchanges have verification requirements to pass before any payments to or from an account can be made.
- PaySafeCard – these prepaid cards allow anonymous payments for cryptocurrencies (and various other products) online. For users who are a bit reluctant to give their personal information, this is ideal. You can also use it to store your purchased Bitcoin. Just don’t lose the card – if you do, your money goes with it. Because there are no personal details attached to it, if someone finds the lost card or, even worse, steals your card, they will have access to your purchased cryptocurrency.
- Bank transfer – bank transfers and wire transfers are often the most common to incur withdrawal fees, whether a fixed amount or a percentage of the settlement amount. Before you go to make a payment, have a look at your exchange’s website to check the fee situation. You may find there are less costly payment methods open to you. On the plus side, they usually have a low minimum for deposits
- PayPal and Skrill – both services are very similar to each other, as are their opinions on Bitcoin. Therefore, there are very few places to buy Bitcoin with either service and even fewer in Canada. If either of them is your preferred option, check out an international site like VirWoX. Here, you can exchange via PayPal or Skrill for a different cryptocurrency. Unfortunately, you will face heavy fees, some of which are included in the buying price rather than a separate surcharge.
- Cash – using a global exchange site like LocalBitcoins can connect you with fellow traders near you. If you want to buy or sell, and you happen to live close enough together, these transactions can take place in person, for cash. That might seem more inviting than an electronic transaction, but remember you probably don’t know these people. Ensure your own security before agreeing to meet up.
- Interac Online– this is a payment service designed for making Bitcoin purchases easier for Canadian traders, so it’s easily accessible. But because of that, it does come with some strict verification requirements for the users’ safety. However, looking at the local exchanges, it does often have fees attached to it for withdrawals and deposits.
- MoneyGram– a common sight around the international crypto brokerage sites, usually as means to facilitate credit card purchases or wire transfers, so the pros and cons that go with either of those payment methods apply here. However, make sure you check the fees page of your exchange’s website; they may have a separate set of rules for MoneyGram.
Bitcoin ATMs In Canada
Did you know Canada has the second-largest amount of Bitcoin ATMs of in the world? Over 200 of them are based in Montreal, Vancouver, and Toronto, with a further 100 dotted around the rest of the country. These machines enable you to buy and (in around 40% of cases) sell Bitcoin without being sat at your computer. All you need is your Bitcoin wallet, some photo ID in case, and to be at the Bitcoin ATM point. For buying, select the right option, provide the photo ID and any other verification information they ask for, scan the QR code for your wallet and insert the cash required to make the purchase. The transaction will be completed when you hit “Send” (wording may vary machine-to-machine). Make sure you get a receipt.
When selling, which is not available on every ATM, the process follows the same course. The only real difference is selecting a “Sell” option instead of a “Buy”. After verification (if required), you can type in how much fiat currency (cash) you would like to receive. This will generate a QR code, which in turn will tell you how much Bitcoin is required for that amount of cash. Assuming all is well so far, using your wallet, you will send the Bitcoin. Depending on the machine, one of two things will happen. You will either receive your cash immediately, or you will be given a receipt with a redeem code. Once you have received confirmation of a successful transaction, you can return to the ATM later to redeem your code and receive your cash.
Guide To Buying Bitcoin In Canada
Since it may be a bit overwhelming and a lot to take in, below is a step-by-step guide to getting started with your trading journey. In three stages, you’ll have the basics covered, ready to begin trading on an exchange.
Step 1- Get a Bitcoin Wallet >>
This is a must-have for any investor. Storing your purchased Bitcoin in a hardware wallet is much safer than leaving it stored on the exchange site. This is because they are offline devices, which prevents hackers from getting in. There is a number of a variety of places to get a wallet, such as Electrum, Trezor, Ledger, and Jaxx.
Step 2- Buy Bitcoin on an Exchange
Once you have your wallet, it’s time to pick an exchange. As we mentioned earlier, it’s best to start local while you learn the ropes. For example, Coinsquare is good for beginners. The simplicity in signing up varies from exchange to exchange. It can range from entering your email address and clicking an activation link, to provide copies of government-issued ID. It may seem a tedious task but remember it’s for your own security. After your account is activated and/or approved, you can proceed to the exchange’s trading page, where you can start to purchase your Bitcoin.
Step 3- store your fresh Bitcoins safely
When you sign up to trade in Bitcoin, you gain an address. To stop other people from using your address and spending your Bitcoin, it comes with a digital signature. These digital signatures come by way of private keys, which are what you store in your wallet. These are what you use to access your Bitcoin after every purchase. To add Bitcoin to a hardware wallet, you first have to hit “Receive,” which will give you your Bitcoin address. When someone makes a payment to you, it will appear as an incoming transaction. You will know when it is completed, and the paid Bitcoin is in your wallet when the date and time follow the transaction.
Anonymity Of Buying Bitcoin
Bitcoin is not anonymous, but pseudonymous. That is, the address or addresses you use in your transactions serve as your pseudonyms on the exchange. However, there are a number of payment methods that enable you to make transactions anonymously, such as PaySafeCard. Naturally, the lack of verification poses high data security risks. Also, the face-to-face cash transactions that can happen by way of using LocalBitcoin.com can also take place without verification. Furthermore, anonymous Bitcoin transactions can take place on certain exchange sites. Those such as Wall of Coins are available to Canada, alongside several other countries. The only verification required is via text message.
Is Bitcoin Legal In Canada?
Canada regulates Bitcoin under its Anti-Money Laundering and Counter-terrorism laws, and subjects it to the same taxation standards as a commodity like gold (please refer to our section on this later in the article). Otherwise, it is legal to own, trade and, in some cases, make transactions in Canada.
Banks And Bitcoin In Canada
Some banks in Canada have criticised the cryptocurrency exchange, referring to it as gambling, and citing the need for regulation. However, unlike the move made by banks in the US and the UK, Canadian financial institutions are yet to impose a ban on their account holders using credit cards to make Bitcoin purchases. The country’s frontrunning bank Toronto-Dominion has stated that any cryptocurrency transactions flagged as fraudulent will be withheld, but otherwise, they have no plans to follow the UK or the US.
Taxation Of Bitcoin In Canada
While not accepted as fully legal tender in Canada, Bitcoin is subject to the same taxation regulations that apply to fiat currencies. If a Bitcoin investment was made in order to make a profit at a later date, said profit would have to be declared on the investor’s tax return, for example. The same applies to barter transactions in the purchase of goods or services from the selected retailers.
Popular Bitcoin Alternatives (Altcoins) in Canada
Don’t fancy Bitcoin? Well, you have several alternatives to choose from; Ethereum and Litecoin are a good choice. Other currently popular cryptocurrencies in Canada, (some that were launched at the country) include:
Canada E-Coin – deliberately designed as a community-backed Canadian alternative to Bitcoin. Established in 2014, it operates on a transparent ledger and operates 20 times faster than Bitcoin. It is available for trading only on five exchanges as of 2018 – Cryptopia, Bleutrade, Trade Satoshi, Nova Market and Coinsmarkets.
Bunz (BTZ)– This was announced in April 2018, the Toronto-born BTZ coin will be acceptable in exchange for food and drink, beauty services and a host of other products from over 100 brands and businesses. Since it’s such a recent announcement, there aren’t many places to trade BTZ yet. However, you can via YoBit.net.
ZCash >> this was founded in 2016 and has more presence on the international trading scene, and as such one of the global exchanges would be best to make purchases here. Cex.io and Kraken offer some decent prices.
In a Nutshell
With its lax attitude towards regulations in the cryptocurrency market, Canada is a good place to be using Bitcoin right now. It has made millionaires in the past – who’s to say you won’t be next? All you have to do is follow the steps, trust your exchange and trade wisely.
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