Bitcoin is, by far, the most popular cryptocurrency available on the market as well as the first decentralized currency to exist. The coin uses public-key cryptography to record transactions on the Bitcoin blockchain; blockchain technology allows cryptocurrency to function without a central authority and it can operate on a peer-to-peer network.
Bitcoin, like all other cryptocurrencies, is a digital currency that can be used as cash. Bitcoin was launched in January of 2009 by Satoshi Nakamoto (a pseudonym used by an anonymous programmer or group of programmers). Bitcoin operates on a peer-to-peer network and therefore requires no central authority as banks do.
There are several ways you can buy Bitcoin in Canada, depending on your preference one option may be more suited to you than others.
In Canada, there are many crypto trading platforms and exchanges where Canadian traders can buy and sell Bitcoin. Below are some of the best and most popular options.
CoinSmart is a crypto trading platform that is actually based in Canada. It is a publicly-traded company on the NEO Exchange and is known for its ease of use and features. With CoinSmart users can trade 16 different currencies, including popular ones like Bitcoin, Ethereum and Litecoin.
CoinSmart boasts same-day deposits and minimal wait times, real-time trading activity tracking, and multiple funding methods including Interac, wire transfers, and more.
| Funding Fee | Processing | Minimum | Maximum | |
| Interac eTransfer | 0% on $2000+ 1.5% on $100 – $1999 | Same Day | $100 | $10,000 |
| Bank Wire | 0% | Same Day | $10,000 | $5,000,000 |
| Debit/Credit | Up to 6% | Instant Processing | $100 | $5,000 |
Withdrawal fees sit at 1% (minimum of $15). Trading fees cost 0.20% for single trades and 0.30% for double trades.
Coinbase is a simplistic and stylish crypto platform where you can develop your crypto portfolio. Coinbase is available in over 100 countries and has over 73 million verified users. You can trade over 300+ crypto assets including Bitcoin, Ethereum, XRP, Dogecoin and Cardano.
Coinbase doesn’t charge any fees for transferring crypto from your Coinbase wallet to another wallet. However, depending on the transaction they may charge network and trading fees. Fees can range from 0.5% to 4.5%.
NDAX is a secure and easy-to-use platform that enables users to buy, sell, and trade crypto assets; it is a Canadian-based company but is available across the world. NDAX offers users the ability to experience world-class crypto trading and allows users to earn rewards from using the platform. Users can trade over 30 different types of crypto assets including major crypto coins like Bitcoin, Ether, XRP, Dogecoin and Cardano.
Buying and selling fees are 0.20% per trade. Funding your account is free, however, withdrawing from your account has a flat rate of $4.99 CAD.
Wealthsimple Crypto is one of the most reputable platforms to buy and trade crypto as their platform for stock trading is extremely popular around the world. In fact, the company is backed by some of the largest financial institutions with $380 million in investments. You can open a crypto account and start trading with as little cash as $1; it is Canada’s first regulated crypto trading platform. Your assets also are protected from theft through CoinCover and your coins are held by Gemini Trust Company LLC with $200 million worth of cold storage insurance coverage.
There is a 1.5% – 2% operating fee on each transaction; this is the only fee applied by Wealthsimple.
BitBuy serves over 350,000 Canadians with over $4 billion dollars traded and is known to be a secure and trusted platform for cryptocurrency trading in Canada. They are approved by the Ontario Securities Commission as well as registered with FINTRAC as a money services business. BitBuy offers users 15 different coins to trade on their platform, including popular ones like Bitcoin, Ethereum, EOS and LINK.
The fees for regular BitBuy customers are 0.20% on all buys and sells. API and BitBuy have 0.10% maker and 0.20% for taker fees. The deposit fees are 1.5% for Interac e-Transfer and 0.50% for bank wire. For withdrawals, the Interac fee is 1.5% and the bank wire fee is 1%.
Binance is the world’s largest crypto exchange and offers other services like crypto loans, a Binance Visa, and Binance Pay. They offer multiple ways to trade crypto, their most popular being Convert. Users can buy, sell or hold over 600 types of cryptocurrencies using Binance, including BTC, BNB, ETH, LUNA and ADA.
Binance fees vary heavily depending on your membership level, however, the spot trading fee is always 0.1%.
In order to store cryptocurrency, a buyer can keep it on their trading platform (e.g. Binance, Wealthsimple Crypto, etc), however, once a buyer has accumulated a significant amount of crypto assets, it is highly recommended that they invest in a hot or cold wallet.
These wallets are stored online and are always connected to the internet. You can store, send, and receive tokens using this kind of wallet. They are connected to the internet and are therefore less secure and are more vulnerable to security breaches, however, they are a better alternative to keeping your crypto assets in a crypto exchange.
These wallets are more secure because they store your crypto assets offline, meaning they’re less susceptible to online security breaches and software attacks. A cold wallet is a physical wallet (like a USB drive) that is used to protect your private keys (your password). While these are more secure against external threats, you can completely lose access to your cryptocurrencies if you lose your password (USB drive).
The Government of Canada has classified cryptocurrencies as commodities which means that you can purchase, trade, mine, and interact with them. It is important to note that they are not eligible to be a registered investment. In a sense, you can think about crypto the same way you think about gold and silver.
If you specifically trying to earn a profit from selling and trading cryptocurrency in Canada, your earnings are considered capital gains or business income. This means that you will have to pay capital gains tax or income tax.
Bitcoin is just like any type of investment or property, when you sell it for a price higher than you purchased it, you’re receiving a capital gain. When this occurs, 50% of the gain will be added to your income and taxed accordingly.
If you purchase and sell Bitcoin for a profit multiple times during the year, the CRA can choose to consider your income from this as business income. When this occurs, 100% of your profits from the sale of Bitcoin will be taxed as business income.
Bitcoin is a lucrative and interesting opportunity for all crypto investors; it is by far the most popular and well-known coin worldwide. There are multiple ways for an investor to purchase, sell, and trade Bitcoin and as we move forward into the future, perhaps we will see more Bitcoin to bank compatibility.
Caroline is a 4th year commerce student at Memorial University of Newfoundland pursuing a focus in finance. She is a member of Memorial University’s student managed investment fund and acts as a sector manager in the industrial and financial sectors. Caroline joined the Loans Canada team in 2021 and rediscovered her passion for writing and media creation. In her free time she enjoys spending time with friends and family and reading.
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