Bitcoin is often described as the currency of the future, yet how and where to buy Bitcoin in Canada can be confusing for those new to the world of cryptocurrencies. While Bitcoin has been around since 2009, its popularity has shot up in recent years as investors have begun flocking to digital currencies for their flexibility and anonymity.
There is also a large degree of FOMO with Bitcoin – in 2010, one Bitcoin was worth about .10 cents. Today, one Bitcoin is worth over $88,000 CAD. That’s a staggering increase in a decade, one that is leading more people than ever to get into the world of cryptocurrencies. Here’s a step-by-step guide to how to buy Bitcoin in Canada.
Step-by-Step: How to Buy Bitcoin in Canada
There are two primary ways to buy Bitcoin in Canada – through an ATM machine, or via an online exchange service. Using an online exchange service to buy Bitcoin is the most accessible way to get started, and the process is relatively simple.
1. Choose an Exchange
To begin buying Bitcoin, you first need to choose the exchange service you will be using. An exchange allows users to buy and sell Bitcoin along with other cryptocurrencies. One of the most popular exchanges is Coinbase, which has been in business since 2012.
2. Create Your Account
Whether you select Coinbase or any other exchange, you will first need to create an account in order to buy and sell Bitcoin. Depending on the exchange you pick, you can create an account via the company’s website or via a smartphone app.
3. Fund Your Account
Once your account is up and running, you will need to add a source of funds you want to convert to Bitcoin. Generally, you can only purchase Bitcoin via funds from your bank account, from a debit card, or a wire transfer.
4. Start Buying
Now that you have funds linked to your account, you can begin buying Bitcoin. Once you are logged into the exchange, select Bitcoin from the list of cryptocurrencies available, and select the amount of CAD currency you wish to convert. You will then be shown what that amounts to in Bitcoin. From there, you can finalize your purchase – you’ve now bought Bitcoin and entered the world of cryptocurrencies!
Legality of Bitcoin
Buying and selling Bitcoin is entirely legal in Canada. While the government doesn’t currently consider cryptocurrencies to be legal tender, there is no prohibition on the buying and selling of Bitcoin and other cryptocurrencies in Canada (you just can’t pay your taxes with Bitcoin – yet).
Best Bitcoin Exchanges for Beginners
Coinbase is one of the best Bitcoin exchanges for beginners learning how to buy Bitcoin in Canada. The app is intuitive and easy to use, and offers users the ability to buy and sell 50 types of cryptocurrencies. Coinbase also offers users a free Bitcoin wallet service with a private key access for extra safety. Other recommended Bitcoin exchangers for beginners in Canada include Gemini and Wealthsimple Trade.
Best Bitcoin Wallets for Beginners
A Bitcoin wallet allows you to securely store your cryptocurrencies for future use, and also allows you to buy and sell cryptocurrencies. You can find Bitcoin wallets listed as a “cold wallet” (a digital software that allows you to store your collection offline) or as a “hot wallet” (connected to the internet for speedier transactions, but less secure).
Some of the best Bitcoin wallets for beginners in Canada include Coinbase, which has an intuitive structure that beginners can quickly get their heads around. One of the best wallets for Bitcoin, specifically, is Electrum. Electrum is designed solely for Bitcoin, and features robust security as well as the ability to customize the service to your needs.
Methods of Buying Bitcoin
When learning how and where to buy Bitcoin in Canada, it’s important to research the rules each exchange has regarding the types of funding methods accepted on their service. Generally, exchanges will require you to fund your transaction with money from your bank account, from a debit card, or through a wire transfer. Some exchanges will allow you to add funds from your credit card, but they will tack on an additional charge to cover the fees imposed from the credit card company, which can add up quickly depending on the volume of your transactions. Depending on your bank, there may also be charges for sending a wire via the SWIFT service. The best option, especially for beginners, is to try to buy Bitcoin directly from your bank account or via a debit card.
Many investors use Bitcoin for the anonymity factor. Since transactions are peer-to-peer with no banks or other entities involved, the idea is that the transactions are anonymous. While that is true to a certain extent, law officials have been able to track down cryptocurrency transactions involved with illegal activities, so Bitcoin is not completely anonymous. That said, compared to using a credit card online, Bitcoin transactions offer a much more anonymous transaction than any mainstream alternative.
What fees are associated with buying Bitcoin?
The fees for Bitcoin transactions can vary widely and are based on the traffic on the Bitcoin network — when the network is congested, fees will go up. Each Bitcoin transaction has a fee associated with it, on both sides of the equation. Currently, Bitcoin fees are at the lowest they have been in two years – the average price of a Bitcoin transaction today is a reasonable $1.35 CAD.