Bitcoin is trading around US$62, ($76,) this week, a nearly 70 per cent increase from a year ago. At the same time, SQUID, a new crypto how to invest in bitcoin canada named after the Netflix sensation Squid Game, saw its value crash to nearly zero — after skyrocketing by thousands of per cent — in an apparent scam.

If you&#;re wondering, as an investor, whether you should dabble in digital tokens, you&#;re likely to hear very different opinions from investment advisors. While some remain loath to put any of their clients&#; money in crypto, how to invest in bitcoin canada, others argue investors who can stomach the risk may want to consider devoting a small share of their portfolio to this new type of asset.

If you don&#;t know where to start, it helps to look at some of the risks that come with digital coins.

El Salvador becomes 1st country to adapt Bitcoin as legal tender

One thing to know about the crypto space: it continues to be rife with scams.

&#;Why is that? Well, anybody can issue a (digital) token,&#; says Andreas Park, a professor of finance at the University of Toronto and blockchain expert.

SQUID, which never had any official affiliation with Netflix, traded for a week before its creators abruptly announced they no longer intended to develop the token. Those who bought in collectively lost US$ million ($ million), according to an estimate by technology website Gizmodo.

Crypto experts have described SQUID as an example of a &#;rug pull&#; scam, in which developers draw in unsuspecting investors with the promise of creating a new token, only to quickly walk away with their funds, driving the cryptocurrency&#;s value to zero.

In the case of SQUID, part of the draw reportedly was the promise to create a play-to-earn platform inspired by the deadly tournament of the Squid Game show, in which adults play a deadly version of children’s games in the hopes of winning a big jackpot.

&#;Rug pulls usually happen in the decentralized how to invest in bitcoin canada (DeFi) ecosystem, especially on decentralized exchanges (DEXs),&#; reads a post by crypt price-tracking website CoinMarketCap.

Even if you&#;re investing in established cryptocurrencies, another danger lies in letting crypto exchanges hold onto your digital coins, Park says.

&#;Exchanges get hacked,&#; he says.

Canada’s now-defunct crypto exchange QuadrigaCX operated like a Ponzi scheme, according to the Ontario Securities Commission (OSC), which has been leading a push to regulate crypto dealers.

If you don&#;t want to rely on intermediaries, a safer alternative is to hold the asset in a so-called &#;hot wallet,&#; accessible online, or store it offline in a &#;cold wallet,&#; a piece of hardware.

But that is &#;a bit of a hassle and it&#;s a learning curve,&#; Park says. &#;It&#;s not easy for people to do.&#;

A simple way to gain some exposure to digital tokens while sidestepping the headache of actually holding cryptocurrency is to invest in crypto-holding exchange-traded funds (ETFs), which can be bought or sold like a stock.

&#;Clearly, an ETF is the easier solution,&#; Park says.

In February, the OSC cleared the way for the world’s first Bitcoin ETF. Canadians can now buy ETFs tracking Bitcoin, Ether (the token supported by the Ethereum blockchain) or both.

Alberta may host up to 1M bitcoin processors from China

If you&#;re investing in crypto, get ready for a rough ride. Although cryptocurrencies like Bitcoin and Ether now trade at many multiples of their value just a few years ago, they&#;re still prone to dizzying highs and stomach-crunching drops.

Trending Stories

Some crypto experts point to signs that at least Bitcoin is no longer quite as volatile as it used to be a decade ago.

Park, however, is skeptical.

&#;The volatility may temporarily ease off a little bit because it&#;s traded on so many different places,&#; he says. &#;But I would not go that far to say that it&#;s coming down.&#;

Still, for all their wild ups and downs, what affects the price of cryptos is generally different than what drives fluctuations of other investments like stocks and bonds, notes Darryl Brown, director of portfolio strategies at Spring Planning.

&#;For many investors, crypto can be how to invest in bitcoin canada reasonable part of a diversified portfolio,&#; he says.

Brown says he recommends considering a small allocation — in the range of one to five per cent of a diversified portfolio — to crypto.

&#;It should not be a substantial part of your portfolio,&#; he warns.

Dogecoin: How the joke cryptocurrency became no laughing matter

Worried about whether the value of your crypto holdings could ever go to zero? Even for established tokens like Bitcoin and Ether, experts have very different opinions on the matter.

&#;I would say it&#;s extremely unlikely that the value would go to zero,&#; Brown says.

Brian Mosoff, CEO of Toronto-based Ether Capital, agrees. He likens Bitcoin and Ether to bluechip stocks, shares of large, well-established companies with a long history of solid financial results.

Park offers a different take.

Bitcoin&#;s existence is &#;basically based on the idea that people somehow want it. And if people at some point decide that they don&#;t want it, then the price could go to zero,&#; he says. The same holds for Ether or any other digital token, he adds.

Still, Park is skeptical of the idea that cryptocurrencies could be regulated out of existence.

Many of the issues surrounding cryptocurrencies stem from the fact that &#;many of these tokens are effectively securities and they currently don&#;t abide by the securities regulations,&#; he says. At the same time, he adds, &#;it&#;s going to be very difficult to regulate some of the tokens simply because there is no firm that underlies (them).&#;

&#;It&#;s just functionally very difficult to go after anybody as a regulator if there is no firm entity that you can actually point your finger to,&#; he says.

Still, governments&#; attempts to tighten the rules on — or stomp out entirely — cryptocurrencies supported by decentralized networks can dampen the price of digital coins.

In September, China intensified a crackdown on cryptocurrencies with a blanket ban on all crypto transactions and mining, hitting Bitcoin and other major coins how to invest in bitcoin canada pressuring crypto and blockchain-related stocks.

The move comes amid a global cryptocurrency crackdown as governments from Asia to the United States fret that privately operated highly volatile digital currencies could undermine their control of the financial and monetary systems, increase systemic risk, promote financial crime and hurt investors.

The U.S. Federal Reserve, though, has said it has no plans to ban Bitcoin and other cryptocurrencies.

&#;There are different regulatory regimes throughout the world that are taking a look at cryptocurrencies, and they are forming an evolving opinion,&#; Brown says. &#;Whether that opinion is supportive or negative towards the future of cryptocurrencies and its inclusion and its availability and its accessibility for investors, that&#;s going to be a risk that &#; (is) going to continue to play out for years and years.&#;

What you need to know before investing in Bitcoin this week

Another important consideration if you&#;re pondering investing in cryptocurrencies: while you can hold crypto-backed ETFs in your tax-free savings account (TFSA) and registered retirement savings plan (RRSP) you cannot keep crypto assets themselves in a tax-advantaged account.

This means that, if you sell cryptocurrency for more than you bought it for, the Canada Revenue Agency may view your profit as taxable capital gain.

It&#;s also good to know that crypto ETFs in Canada often carry fees of one per cent or more, which are substantially higher than what the lowest-cost ETFs charge.

Mosoff says the higher fees reflect the fact that crypto ETFs are &#;complex products.&#; Besides, he adds, the cost of a one per cent fee pales in comparison with the eye-popping gains many coins have delivered.

Investors should also be aware that crypto ETFs may not perfectly track the value of their underlying coins, Brown says.

&#;Tracking error has to do with in the creation of exchange-traded funds — the way that these entities go about actually mimicking the price movements of the underlying asset,&#; he says.

For example, you may see that a specific coin has increased by four per cent, while your ETFs tracking that token have only risen by per cent in the same time span, Brown explains.

&#;Those little deviations don&#;t sound like a lot,&#; he says, but the gap &#;could be significant the longer that you hold it.&#;

Finally, you may also want to consider the environmental impact of cryptocurrencies, Brown says.

&#;They may not be an investment that is particularly aligned with someone&#;s values, especially when it comes to things like energy use.&#;

— With files from Reuters

Not long ago, Bitcoin was considered to be a fad and an over-inflated bubble that would one day pop. Twelve years later, it still hasn’t. On the contrary, many corporations, institutions, billionaire investors and tech entrepreneurs are buying billions of dollars worth of bitcoin. 

As the rest of the world rushes in to buy bitcoin, they find themselves with one major obstacle: Bitcoin is notoriously difficult to understand and invest in. So how can Canadians buy bitcoin in Canada?

For starters, there are many apps, websites, TikTokers and influencers that claim they know the best way to buy bitcoin­—but be careful. When it comes to buying bitcoin, Canadians need a reliable and compliant crypto trading platform. This is where Netcoins comes in.

Netcoins offer Canadians an easy way to buy Bitcoin, Ether, Litecoin or any other cryptocurrencies they offer. You simply need to create an account, fund it with e-transfers (0% funding fees) and start trading. Other funding options include online bill payment, bank wire transfers or crypto deposits. 

When you’re ready to buy, select “buy bitcoin” (or any other crypto of your choice), enter the amount you’d like to purchase (for example, $10, $ or $10,), and click the buy button. That’s it. You can buy bitcoin with as little as $10, because of the fact that it’s highly divisible.

Selling follows the same process. Simply click “sell” to convert your crypto back to Canadian dollars in minutes and enjoy free cash withdrawals.

Investors can also take advantage of instant orders, limit orders (where you pre-set a price to automatically buy/sell a cryptocurrency), and price alerts (where you are notified of price changes instead of staring at the price of crypto all day long) on the Netcoins platform.

What sets Netcoins apart from other crypto exchanges is the fact they’re owned by a publicly traded company and that it’s an “open loop system,” meaning that both Canadian dollars and cryptocurrencies can flow in and out of the platform.

In addition, Netcoins became the first publicly-owned, fully regulated crypto trading platform in Canada on Sept. 30, Learn more about what this means for consumer protection, the crypto industry and Canada. 

For Netcoins, it’s all about being open, transparent and available to help Canadians buy Bitcoin or any other cryptocurrency in Canada, how to invest in bitcoin canada. There has never been a safer, more compliant, or easier way to buy Bitcoin in Canada than with Netcoins.

Netcoins is registered with FINTRAC, a licensed Money Service Business, and is owned by publicly traded company BIGG Digital Assets (CSE: BIGG) (OTCQX: BBKCF).

With the Netcoins mobile app available, users can trade anytime from anywhere. Get the app on Google Play or the Apple Store.

Disclaimer: Content Produced by CryptoPR

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The easiest way for Canadians to buy Bitcoin is through a cryptocurrency exchange. Canada has a wide selection of well-regulated, highly secure exchanges to choose from, several of which I mention below.

CoinSmart is our #1-rated crypto trading platform due to its high level of security, ease of use, and low trading fees. If you’re serious about buying and selling crypto in Canada, I can’t recommend CoinSmart highly enough.

CLAIM MY $30 BONUS

Trusted by ,+ Canadians.

It’s easier to buy Bitcoin in Canada today than ever before. On top of the crypto exchanges mentioned below—CoinSmart, Bitbuy, and www.oldyorkcellars.com—you can also use a Bitcoin ATM, a peer-to-peer (P2P) network like LocalBitcoins, or an Over-the-Counter (OTC) broker like Satstreet.

You can also mine Bitcoins by yourself if you have a powerful computer, though this is nowhere near as straightforward as using cryptocurrency exchanges and trading platforms.

Before we talk about how to buy Bitcoin, though, let&#;s look at what it actually is.

What Is Bitcoin?

Bitcoin is a digital currency that allows users to send and receive money quickly without the need for any central authority or bank. The concept for Bitcoin was originally conceived in a whitepaper written by Satoshi Nakamoto, a pseudonymous person or group of people whose real-world identity has still not been revealed.

Bitcoin has a fixed supply of 21 million total coins, which means there will never be more than 21 million in circulation. This makes Bitcoin a finite resource, like gold, which causes it to be deflationary (the opposite of inflationary) in nature.

New Bitcoins are created by Bitcoin miners who solve complex problems using extremely powerful computers. This method of creating cryptocurrency is known as proof of work, since miners are rewarded for the work they do in solving those problems.

The smallest unit of a Bitcoin is known as a Satoshi, which is worth one hundred millionth of one Bitcoin, how to invest in bitcoin canada. Given that Bitcoin can be broken down into such small pieces, Bitcoin transactions can be even more precise than fiat (cash) transactions, making Bitcoin a great solution for the growing number of micro-transactions underpinning the web.

Pros & Cons of Trading Bitcoin

There are several benefits and drawbacks of investing in Bitcoin in Canada or anywhere else. Here are just a few of the more prominent ones:

Pros

1. One of the main draws of Bitcoin is its high potential for outsized investment returns. As shown above, Bitcoin’s compounded annual growth rate has been % per year fromfar outpacing any other mainstream asset class.
2. Users can send Bitcoin across international borders with zero friction, making global commerce and the overall flow of wealth simpler and less costly.
3. Bitcoin is not controlled by any government or central bank, which makes it difficult for authorities to freeze your holdings. With that said, institutions are gaining more control over the movement of cryptocurrencies through other means, so this benefit may become less apparent in the coming years.

Cons

1. Bitcoin’s price can be extremely volatile, making it a highly unpredictable investment vehicle. 
2. Bitcoin is still largely unregulated, how to invest in bitcoin canada, which means the entire industry is still a bit of a wild west. If you make a mistake or get scammed, there’s not much in the way of governmental or regulatory oversight to fall back upon.
3. Bitcoin transactions are irreversible, including those that are made fraudulently or by mistake. Irreversibility can certainly be a benefit in some situations, but there are also many cases when being able to reverse certain types of transactions, how to invest in bitcoin canada, as you can in the traditional banking system, is also beneficial.

There are other benefits of Bitcoin that have somewhat fallen apart over time. For example, transactions made via Bitcoin were originally designed to be anonymous and largely untraceable, and for the most part, in the early days, they were. Today, though, most cryptocurrency platforms require their customers to provide government-issued identification through a know-your-customer (KYC) process upon registration, which means that if a government agency needed to know the person behind the Bitcoin address, they could get that information relatively easily.

Bitcoin’s Financial Performance Over Time

The financial performance of Bitcoin cannot be ignored. SinceBitcoin has delivered a compounded annual growth rate (CAGR) of % per year, far greater than just about any other asset class. If we were to include Bitcoin’s first few years (), when it was priced extremely low, the CAGR rises even higher to about % per year.

To how to invest in bitcoin canada you an idea of how truly impressive Bitcoin’s financial performance has been, here’s how it compares to the performance of other assets over that same timeframe:

Asset	CAGR ()
Gold	%
S&P	%
NASDAQ Composite	%
AAPL (Apple Stock)	%
Bitcoin	%

The 3 Best Crypto Exchanges In Canada

Here are my top three picks for the best Canadian crypto exchanges to buy Bitcoin from.

1. CoinSmart

Best Overall

Trading fees: %
Security: 95% cold storage
Signup bonus: $30

Trusted by ,+ Canadians.

CLAIM $30 BONUS

CoinSmart is, without a doubt, the best crypto platform in Canada in

For starters, CoinSmart&#;s trading fees are an incredibly low %. They offer excellent customer supportavailable 24/7 via phone, live chat and email, and user accounts are verified instantly, how to invest in bitcoin canada.

CoinSmart has been designated a Registered Marketplace by the Ontario Securities Commission (OSC), and as a publicly-traded company, their financials are audited by a third-party firm at least once per year. They also maintain a 95% cold storage policy, which ensures your crypto is kept extra safe and how to invest in bitcoin canada across all circumstances.

As a new CoinSmart user, you&#;ll receive a $30 bonus upon funding your account, which you can use to buy Bitcoin, Ethereum, or any of the 16 assets CoinSmart supports. If you&#;re looking for a highly secure, reputable crypto platform, CoinSmart is an excellent choice.

Features

• Extremely low trading fees (%)
• 24/7 customer support available via phone, live chat or email
• Instant account verification
• Supports 16 cryptocurrencies
• Registered Marketplace by the OSC
• Immediate deposits and withdrawals
• User-friendly for both beginners and advanced traders
• 95% cold storage policy keeps your crypto extra secure

Cost

• Account Opening: Free
• Trading Fees: %
• INTERAC Deposit: 0%
• Bank Wire Deposit: 0%
• Bank Wire Withdrawal: 1%
• EFT Withdrawal: 1%

Signup Bonus

$30 bonus when you sign up using this link

Best For

Investors looking for low fees and the best overall trading experience.

CLAIM MY $30 BONUS

Trusted by ,+ Canadians.

2. Bitbuy

Lowest Fees

Trading fees: %
Security: 95% cold storage
Signup bonus: $40

Free account, instant verification

CLAIM $40 BONUS

Bitbuy is a great second option for Canadians seeking a reliable, trustworthy crypto exchange.

Like CoinSmart, Bitbuy&#;s trading fees are just %, and go as low as % for transactions made using their advanced trading platform. It supports 15 cryptocurrencies, verifies accounts instantly, prides itself on its helpful customer service reps, and has a beautiful, well-rated app.

Bitbuy has processed more than $4 billion in trades across its ,+ Canadian users. It&#;s a Registered Marketplace and Investment Dealer as recognized by the Ontario Securities Commission (OSC), which means it&#;s a highly safe and secure exchange that offers deep liquidity for all order sizes.

For a limited time, Bitbuy is offering a $40 bonus to Yore Oyster readers who fund their account with $ or more. If you’re looking for a highly-respected exchange that offers altcoin trading, excellent customer service, and a slick mobile app, open a Bitbuy account today.

Features

• Extremely low trading fees (% &#; %)
• Easy to use for both beginners and advanced traders
• Supports 15 cryptocurrencies
• Excellent customer support
• Powerful mobile app (rated /5 on the App Store)
• 95% cold storage policy keeps your crypto extra secure

Cost

• Account Opening: Free
• Trading Fees: % to %
• INTERAC Deposits/Withdrawals: %
• Bank Wire Deposit: %
• Bank Wire Withdrawal: 1%

Signup Bonus

$40 when you deposit $ using this link.

Best For

Investors looking to trade with extremely low trading fees.

3. www.oldyorkcellars.com

Best For Altcoins

Trading fees: %
Security: 95% cold storage
Signup bonus: $10

Trade with 10x leverage.

OPEN ACCOUNT INSTANTLY

www.oldyorkcellars.com is a major global player that brings a mature, proven exchange to Canadian crypto investors. It supports + cryptocurrencies, making it an ideal fit for anyone looking to invest in undiscovered altcoins before the masses.

www.oldyorkcellars.com offers some unique features that no other Canadian cryptocurrency exchanges can match. Users can trade options and futures contracts, earn interest by staking their coins, and make trades with up to 10x leverage when they feel particularly confident in a coin.

www.oldyorkcellars.com also has invested an enormous amount of money into its platform security, which makes trading with them extremely safe. The exchange is lightning quick (prices update dozens of times per second), which gives day traders an upper hand over the rest of the market.

Overall, www.oldyorkcellars.com is a solid exchange for investors looking to cash in on brand new altcoins. If you&#;re just looking to buy how to invest in bitcoin canada mainstream coins like Bitcoin and Ethereum, though, I suggest either Bitbuy or CoinSmart instead.

Features

• Average trading fees (%)
• Supports + cryptocurrencies
• Allows up to 10x leverage
• Trade crypto derivatives (futures and options contracts)
• Earn daily interest by staking your coins
• Purchase newly-listed coins at up to 50% off
• Free deposits from all cryptocurrencies

Cost

• Account Opening: Free
• Trading Fees: %

Best For

Investors looking to buy altcoins and other new crypto assets before they go mainstream.

OPEN FREE ACCOUNT

How To Buy Bitcoin From An ATM In Canada

Bitcoin ATMs are ATM machines specifically designed for buying and selling cryptocurrency. The primary benefit of Bitcoin ATMs is convenience: if you aren&#;t already signed up with a crypto exchange, you can buy or sell Bitcoin from a Bitcoin ATM whenever you like.

Before using a Bitcoin ATM, you&#;ll need to open a crypto wallet, so you have somewhere to send your coins. ZenGo is the wallet I recommend, since it&#;s highly secure and extremely easy to use. There are currently over 2, Bitcoin ATMs across Canada, and you can find the ATM closest to you using this map.

The downside to Bitcoin ATMs is that they generally charge higher fees how to invest in bitcoin canada exchanges, and sometimes significantly higher. And as exchanges like CoinSmart and Bitbuy roll out instant account verification and continue to compete for lower fees, cryptocurrency ATMs are losing much of their allure.

How To Store Bitcoin Safely

There are two main places you can store cryptocurrency: on an exchange or in a wallet. And when it comes to security, wallets trump exchanges, mainly because exchanges have a bad history of going bankrupt, getting hacked, or having their founders run off with millions of dollars.

Crypto wallets protect your Bitcoin through a combination of public keys (which allow others to send you funds) and private keys (which allow you to send others funds). These are the three major types of crypto wallets:

1. Paper wallets are free and relatively secure, but prone to loss of funds.
2. Software wallets are free, but may lack key security features, depending on the software wallet you choose.
3. Hardware wallets are highly secure, but generally cost $$ to buy.

As someone who&#;s tried out more than a dozen different wallets over the years, here are my top 3 picks for the best Bitcoin wallet for Canadians:

#1 Best Overall	Supports: 70+ crypto assets Type: Software wallet Cost: Free The most secure wallet, period.	SECURE MY COINS FOR FREE
Top Hardware Wallet	Supports: 1,+ crypto assets Type: Hardware wallet Cost: $ CAD Rated /5 on Amazon.	SECURE MY COINS
Best For How to invest in bitcoin canada alt="Trezor Model One" src="www.oldyorkcellars.com" width="" height="67">	Supports: 1,+ crypto assets Type: Hardware wallet Cost: $75 CAD Trusted by 1 million+ investors.	SECURE MY COINS

Bitcoin Taxation in Canada

There are a few key things to point out about how Bitcoin and other cryptocurrencies are how to invest in bitcoin canada in Canada:

• If you hold cryptocurrency and its value increases, you will be taxed on your profit in the form of capital gains. Capital gains are taxed at 50% in How to invest in bitcoin canada, if you hold cryptocurrency and its value decreases, you are eligible to claim a capital loss.
• If you&#;re a business accepting payment in Bitcoin or a cryptocurrency miner generating Bitcoin, your profits will be taxed as income.

As with all things tax-related, it&#;s important to keep consistent records of your transactions so you can prove them if the Canada Revenue Agency requests it, how to invest in bitcoin canada. It&#;s also worth pointing out that most cryptocurrency exchanges are not required to report transactions to the CRA unless they&#;re over $10, in size, though you&#;re still liable to pay your taxes on transactions lower than that amount.

In Summary

The easiest way for Canadians to buy Bitcoin is through a cryptocurrency exchange, though you can also make your purchase using a Bitcoin ATM. Canada has a great selection of well-regulated, highly secure exchanges to choose from, several of which I mentioned above.

CoinSmart is our #1-rated crypto trading platform due to its high level of security, ease of use, and low trading fees. If you’re serious about buying and selling crypto in Canada, I can’t recommend CoinSmart highly enough.

CLAIM MY $30 BONUS

FAQs About Buying Bitcoin In Canada

Is Bitcoin legal in Canada?

Yes, it&#;s legal to buy, sell and hold Bitcoin in Canada. It can also be used in transactions where the other party (the buyer or seller) is willing to accept it, though because Bitcoin is not a legal tender, no person or organization is required to accept it in transactions. This is also the reason Bitcoin and other cryptocurrencies cannot be used to pay taxes or other government fees.

As of earlynine countries have a full ban on cryptocurrencies: Algeria, Bangladesh, China, Egypt, Iraq, Morocco, Nepal, Qatar, and Tunisia.

Overall, how to invest in bitcoin canada, Canada has taken a relatively liberal approach to developing legislation around cryptocurrencies. Other methods of interacting and transacting with Bitcoin and other cryptocurrencies (including staking and mining) are also legal in Canada, though the laws around these newer use cases are still developing.

Is Bitcoin safe?

Trading Bitcoin is definitely a speculative endeavour, and not one to be taken lightly. Putting the inherent risks of trading aside, though, there are also outside risks you need to be aware of, too.

The most notable Canadian case of large cryptocurrency losses came with the collapse of QuadrigaCX upon the supposed death of its CEO, Gerald Cotten. As the story goes, Cotten was in sole possession of the private keys required to access customer funds, making those funds—worth more than $ million at the time—completely inaccessible. Whether Cotten is indeed dead is still up for debate (his body was never recovered), but none of those customer funds have been recovered to date.

That&#;s the risk of bad actors within an exchange, but outside hackers pose a risk, too. Every year, hackers steal billions of dollars worth of cryptocurrencies from exchanges and wallets, which is why security is such a big point of discussion within the world of crypto.

With this in mind, you should only get involved with trading cryptocurrency if you&#;re comfortable with the risks. If you purchase Bitcoin using a reputable crypto exchange and store them in a highly secure wallet, you&#;ll eliminate the large majority of the risks associated with buying and selling Bitcoin.

Can I buy Bitcoin through my bank in Canada?

Yes, you can buy Bitcoin using your bank in Canada, as well as through cryptocurrency exchanges like CoinSmart, Bitbuy, and www.oldyorkcellars.com. If you want to buy Bitcoin using Interac e-transfer or a bank transfer, how to invest in bitcoin canada, I suggest trading with CoinSmart, since Interac e-transfers above $2, are free, and bank transfers are relatively inexpensive, too. 

What is the best Bitcoin wallet in Canada?

In my opinion, the best Bitcoin wallet in Canada is ZenGo, thanks to its bank-level security, ease of use, and 24/7 customer support. It can hold 70+ different crypto assets at a given time, and works seamlessly for Canadians looking to buy Bitcoin.

CLAIM $40 BONUS

Best For Altcoins

OPEN ACCOUNT INSTANTLY

Cryptocurrencies may be the next major step in the internet's evolution, but they are also of a frightening level of complexity that makes the recent news flow difficult to how to invest in bitcoin canada and challenging for potential investors.

Recent headlines have focused on the surge, and subsequent retreat, how to invest in bitcoin canada, of the price of bitcoin, as well as on the rush of new cryptocurrencies to the market. How to invest in bitcoin canada not already in the bitcoin market naturally wonder whether they should get in now or whether they've missed the boat. And business owners naturally must wonder whether they should establish a way to be paid in cryptocurrency in order to get ahead of a potentially changing payments landscape.

But the rise of cryptocurrencies has implications for industries outside of the financial realm. While the future is difficult to predict, a good place to start is a grounding in the fundamentals of cryptocurrencies. Here's a primer to get you up to speed:

1. What are they?

Simply put, cryptocurrencies are digital currencies that exist only online and operate using peer-to-peer technology, how to invest in bitcoin canada. Unlike fiat currencies — issued and backed by a country how to invest in bitcoin canada they have no paper version and no central bank controlling their supply.

However, they can be used much like any other currency: as payment or an investment. They can be purchased on certain exchanges or directly online on various platforms, and purchased in small fractions of a coin, meaning they can theoretically be used to make small purchases as well as larger ones. In the case of bitcoin, there is a limit of 21 million coins that can ever be produced, which appeals to investors as it puts a hard cap on potential inflation.

But while bitcoin is the largest cryptocurrency, it is just one of many. However, only a few — such as Etherium, Ripple, Dash and Litecoin — have achieved notable penetration.

“There are some 1, cryptocurrencies out there today, I'm sure many of which are not really steeped in well-vetted technology," says Dan Perlin, managing director of Payments, Processors and IT Services at RBC Capital Markets in Baltimore. “What happens in that regard is it creates an enormous amount of volatility."

While cryptocurrencies are intriguing in their own right, there is more excitement surrounding the network that powers them, known as blockchain. Bitcoin was the first use of blockchain technology, but the two are not the same. Rather, blockchain is a constantly growing system of encrypted ledgers, which are all linked and are widely distributed among many users.

Changes made to any block require changes to previous blocks and any alterations leave how to invest in bitcoin canada record, making the chain all but impossible to hack.
While investor focus may be on the potential for cryptocurrencies as alternative investments or payment systems, it's the potential of the blockchain that could end up being more transformative, says Perlin.

“There's really two school of thoughts here," he says. “There's one of stored value where you're actually able to take this cryptocurrency as an alternative to fiat currencies… But when you go deeper into this, what you find is that the protocols being developed, meaning the purposes of these things, is where the real value can be accrued."

2. Where do they come from?

Unlike fiat currencies, cryptocurrencies are not issued by a central bank. Instead, they are mined, a term which reflects the amount of work involved in producing them. Miners donate time and computer power to help verify cryptocurrency transactions and add them to the blockchain. For doing so, they are rewarded with new coins. The process requires special hardware and uses a significant amount of power, which makes the process expensive.

Mining issues will likely be solved over time by new technological innovations, how to invest in bitcoin canada, such as the Lightning Network, how to invest in bitcoin canada, says San Francisco-based RBC Capital Markets analyst Mitch Steves. The technology works as a payment protocol that can be layered on top of a cryptocurrency blockchain to speed up transaction times and use less energy.

“Lightning Network already works so it's just a matter of time," says Steves.

3. What are the benefits?

By using the decentralized blockchain technology, cryptocurrency transactions need no intermediary, which can make transactions cheaper and means no one authority can cancel or interfere with a transaction.

For instance, a person wanting to send money internationally to family or to buy a product would normally require an intermediary to convert the currency from one to the other, with fees being charged for the conversion, as well as for the transaction. There could also be delays, depending on how the funds are transferred.

With a cryptocurrency such as bitcoin, the transaction would take a few minutes at most, with a single transaction fee. It can also be initiated from anywhere in the world using an internet connection. For businesses, this may present the prospect of cheap, nearly instantaneous transactions that can cross borders seamlessly, and it could revolutionize the global payments and remittances industry.

“The cost with which individuals send money using money transfer services, are pretty high. The alternatives that exist today look to be something that are going to be potentially very disruptive to that space in that (cryptocurrencies) can do it faster, cheaper and with a similar level, if not greater level of security associated with it," says Perlin.

Blockchain is also anonymous and has never been hacked, says Steves, as the distributed ledger means that evidence of any transaction is replicated on every computer on the chain. If even a few of these were hacked, there will still be records showing the correct transaction details.

4, how to invest in bitcoin canada. What are the risks?

While the possibilities of cryptocurrencies are undeniable, there are also plenty of risks to consider, both as an investment and a transaction currency.

Firstly, the decentralized nature of cryptocurrencies comes with a downside as the lack of government backing means no government protection. Steves says this could mean the government has no incentive to track down the criminal in the event of a theft.

And while the blockchain itself has not been hacked, there have been instances of theft from exchanges that buy and sell cryptocurrencies. In January, hackers stole around US$ million worth of cryptocurrency from Coincheck exchange in Japan, how to invest in bitcoin canada, according to Reuters.

Also potentially vulnerable are the digital wallets customers use to store cryptocurrencies. According to Steves, a weak point in the security is the set of codes or 'keys' used to access the wallet. If the codes are stolen — through the hacking of a smartphone on which they're how to invest in bitcoin canada, for instance — a digital wallet could be drained.

“We think this is a significant risk going forward as more and more hackers attempt to steal and unwind wallets that are not secure," he says.

Another risk which may be contributing to the recent decline in bitcoin value, is the risk of government action. While countries would not likely be able to completely shut down a cryptocurrency, they could make trading illegal, says Steves. Worries that China and South Korea would do just that surfaced in January, spurring a selloff in bitcoin. There could be other levels of regulation put in place as governments try to track down taxable currency flows and potential criminal activities.

For many, the recent decline in prices of some cryptocurrencies - Bitcoin has lost more than half of its value since December - makes them more compelling as investments.

But in terms of long-term potential upside, Perlin says it's difficult at this point to get a handle on the potential value embedded in the blockchain protocols, which makes picking winners a challenge.

“Determining the value of any of those (cryptocurrencies) is very much predicated off of what are the protocols they're building. That's a huge amount of effort and work to determine that, and that's why in many instances the investment today is very hard to get to," he says. “I would say it's very early days."

5. What does the future hold?

While the cryptocurrency space may be new at the moment, many merchants already accept bitcoin worldwide - and blockchain has the potential to impact multiple industries, says Perlin.

In addition to global remittances, the decentralized nature of blockchain opens up the possibility of overhauling the identity industry, with the potential for customer specifics being stored in an authenticated distributed database that could be managed by the consumer and shared with any business and authority they wish.

“IDs being in the hands and control of the individual, as opposed to some governing body I think is going to be a huge area, and identification inside of organizations is also a costly process," he says.

It could also impact any industry that uses loyalty programs or contracts. Perlin also sees potential disruption in insurance, as well as trust-based businesses, such as the how to invest in bitcoin canada the provenance of precious materials.

Steves is also reluctant to make any predictions around any particular cryptocurrency, citing the many risks, though how to post links and make money believes the space in general has the potential for enormous growth.

His bull case is for a $trillion market over the next 15 years or so — more than a tenfold increase — based on a rough calculation of one-third of the approximately $30 billion combined value of current offshore accounts and gold, current stores of value which cryptocurrencies could begin to replace.

Key to this, he says, how to invest in bitcoin canada, is continued advancement in the cryptocurrencies themselves; to add applications and transact faster at lower costs.

As to whether a cryptocurrency will be the world's dominant currency, “It's unclear," Steves says, "But there will be a few coins worth many trillions of dollars."

Investing in cryptocurrency is highly speculative and risky. Only invest in cryptocurrency after you have paid the mortgage, bought groceries, put money in your RRSP, and purchased dog food. Then you might want to take a flyer on crypto.

What is cryptocurrency?

Cryptocurrency is used to send money around the world – securely and anonymously. It’s a term for thousands of digital currencies that are supported by a decentralized system using cryptography. The best-known is Bitcoin but there are many others available worldwide.

These currencies are very different from state-regulated currencies like the Canadian dollar. The Bank of Canada is responsible for maintaining the integrity of the dollar, whether that is printed bills or electronic transfers.

It’s legal to use cryptocurrencies. And it’s legal to buy and sell them as investments. But they are not legal tender in Canada, like a toonie or a $20 bill. Businesses don’t have to accept crypto as payment for goods and services.

What is blockchain?

This is a system in which the transactions of a cryptocurrency are maintained. Blockchain is a database that tracks the date and time of transactions. These can’t be altered and serve as a permanent record to show ownership of the crypto.

How does cryptocurrency work?

Crypto depends on the willingness of both buyers and sellers to use it for transactions. To spend your crypto, you need to find vendors who will accept it as payment for the goods and services that you wish to purchase. Then you can simply transfer it to them.

How to buy cryptocurrency in Canada

If you need cryptocurrency, you can purchase it using Canadian dollars. However, be very careful as there are many scammers involved in this market. You could be hacked and have all of your cryptocurrency stolen, how to invest in bitcoin canada. There may not be a complaint how to invest in bitcoin canada like there is when you purchase an item using your credit card or debit card.

In addition, the value of crypto can vary wildly. The amount that you purchase today could be worth less in a few weeks.

What is the best way to invest in cryptocurrency?

There is a wide range of options for buying crypto in Canada. Again, do your research to ensure that you are not the target of fraudsters and hackers.

Here are just a couple of places where you can purchase crypto:

• Wealthsimple: Wealthsimple says it’s the first regulated crypto platform in Canada. It features a wide variety of cryptocurrencies.
• Coinsmart: It is based in Toronto and allows you to buy and sell Bitcoin with credit cards.

So, what’s the best place to buy crypto in Canada? As we have indicated, there are risks associated with any purchase of crypto. So do your research and be careful!

What are the risks involved with cryptocurrency investing?

The biggest risk is that the value of cryptocurrency fluctuates dramatically. For example, 1 Bitcoin ranged in price from USD $13, how to invest in bitcoin canada, in to a high of $66, in When you purchase a stock, you expect the value to go up or down based on the company’s expected revenues and profits. With a cryptocurrency, you have no idea why the price is moving. So Bitcoin trading in Canada is highly speculative and risky.

Secondly, how to invest in bitcoin canada, cryptocurrencies are an unregulated market. This is different from a stock exchange, like the TSX, which is supervised by the Ontario Securities Commission.

Thirdly, you need to hold your crypto in a “wallet”. If you hold it in a “hot wallet” this means it is online and vulnerable to being hacked. Alternatively, you can keep it in a “cold wallet” which means it is offline and stored in a physical way, such as a USB stick. The risk with a cold wallet is that you could lose the USB stick – and access to your crypto.

Inthousands of people lost money when the president of Canadian bitcoin exchange QuadrigaCX, Gerald Cotten, died suddenly and took the passwords to his grave. The company could not recover the crypto and had to file for bankruptcy protection. The circumstances around his death in India are still mysterious, casting a dark shadow over the crypto sector.

These types of situations reduce confidence in cryptocurrencies and may cause them to decline in value. If you are holding them as an investment, there is a risk that you will lose money.

A digital wallet is not protected like bank deposits, which are insured by the Canada Deposit Insurance Corporation. In the unlikely event of a bank failure, your money is safe (up to certain limits).

How to purchase cryptocurrency

Buying crypto in Canada is actually quite easy:

1. You sign up for a Canadian cryptocurrency exchange
2. You deposit Canadian dollars directly from your bank account
3. You make a purchase of crypto
4. You store it on the exchange account or transfer it to a wallet

Your next steps depend on the reason why you are making a purchase:

• For an investment: You can simply hold the crypto to see if it goes up in value. Or you can trade it for other types of digital currencies. You can then decide how long to hold it before selling.
• To purchase goods and services: You may need the crypto to buy something online. Just be sure you know and trust the organization before sending them the funds. Bitcoin transactions are not reversible.

Should you purchase cryptocurrency?

As we have indicated, there are two reasons that you may wish to buy Bitcoin or other cryptocurrencies – to make a transaction with a vendor or as an investment.

Crypto helps you to remain anonymous when you make a purchase. A vendor may request that you buy goods and services using crypto. If so, just be sure that you trust the organization – because once you transfer your funds you can’t get them back.

Some people engage in Bitcoin trading in Canada as an investment. As we have indicated, this is a high-risk investment and you could lose some or all of your money.

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Futures accounts are not protected by the Securities Investor Protection Corporation (SIPC).

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