Crypto has become such a phenomenon that some of the most recognizable global company names have risen on board. Especially in February 2021 Tesla bought $ 1.5 billion in bitcoin and announced plans to accept it as payment for its vehicles. Paypal, Starbucks and Yum! Brands (parent company of KFC, Pizza Hut, and others) are just a few companies currently accepting or testing Bitcoin payments in various territories. In the meantime, RBC Capital Markets recommended a current report Apple, the world’s largest publicly traded company, should launch its own cryptocurrency exchange.
If you don’t know a lot about Bitcoin and want to learn more, you can find an excellent primer Here. And if you’re ready to take the plunge but don’t know where to start – especially if you’re looking to buy in Canadian dollars – read on.
Buy bitcoin through an ETF
An ETF (Exchange Traded Fund) is a “basket” of securities (groupings of individual stocks or government and corporate bonds) that you purchase in a single purchase, much like a mutual fund. Unlike a mutual fund, however, an ETF can be bought and sold on an exchange throughout the trading day – just like a stock. They also have lower fees than mutual funds.
ETFs are an easy way to add Bitcoin to your portfolio. If you already have a brokerage account, you don’t need to take any additional steps to buy a Bitcoin ETF. At the time of this writing, there are three Bitcoin ETFs in Canada and more are pending. The very first Purpose Bitcoin ETF (BTCC), which was launched on the TSX in February 2021, followed by Evolves Bitcoin ETF (EBIT) and CIs Galaxy Bitcoin ETF (BTCX). This puts us way ahead of the US, where cryptocurrency ETFs have not yet been approved. As with all ETFs, you can buy and sell these through a traditional or online broker. Learn more about the process Here.
Note that some crypto ETFs can only be held in an unregistered account. Therefore, you need to prepare for the tax implications of your trades.
Hold Bitcoin Direct
While ETFs are convenient, they don’t allow you to hold Bitcoin directly. This may be fine for a more passive or less experienced investor, but if you are to do If you want to store Bitcoin right away, the easiest way to open a “digital wallet” is through an online exchange.
This is where you’ll want to spend some time researching as online exchanges vary widely in terms of features, benefits, and security. Start with how you want to invest. Are you only interested in one type of cryptocurrency or do you want to invest in several? What payment methods would you like to use for purchases (for example, via a link to your Canadian bank account or with crypto you already own)? Would you like to be able to trade on your smartphone? Also, you need to be absolutely certain that the exchange you have chosen is trustworthy and you can offer assistance should you need it.
One option that ticks multiple boxes is CoinSmart, a Canadian-owned digital currency exchange (DCE) designed solely to buy and sell Bitcoin (as well as other cryptocurrencies, including Ethereum, Litecoin, and more) in Canadian dollars.