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Canada does not have such strict cryptocurrency rules. Despite the fact that it is not legal tender, the Canadian government classed bitcoin as a commodity, which means you can use it to buy, trade, and mine with suitable regulations and conditions. Some establishments in Canada accept cryptocurrency as payment for products and services, making it as valuable as fiat currency in the country.
With that in mind, starting your crypto journey in Canada is really simple, as there are currently over a million Canadian traders active in the market. If you’re a new investor interested in crypto who lives in Canada, you’ve come to the right place. Continue reading to learn about various how-tos and FAQs to assist you with your cryptocurrency journey.
Crypto Exchanges Canadian Investors PreferThere are several Canadian-based cryptocurrency exchanges on the market right now, including Bitbuy and Coinberry. Both exchanges only serve Canadian consumers, accepting Canadian citizens or permanent residents and only taking CAD as fiat currency. However, the most infamous crypto exchange is the now-defunct Quadriga. Crypto news broke regarding the exchange’s apparent death in 2019, but it was later discovered that the majority of the exchange’s wallets were empty. This sparks a flurry of rumours and speculation about whether Quadriga was a hoax or whether the CEO genuinely died.
Crypto, Credit Card, Bank Transfer, Debit Card
How Easy Is It To Buy Cryptocurrency in Canada?
Buying cryptocurrency is relatively easy in Canada, and it has never been difficult to access as a Canadian. The country has numerous Bitcoin ATMs which Canadians can access as well as legally acquire as it has been classified as commodities – which means users can use it to trade with regulation.
Best Method To Buy Bitcoin In CanadaAs previously said, purchasing Bitcoin in Canada is as simple as 123. It consists of only a few steps, which are as follows:
The first step is choosing a cryptocurrency wallet which you can use to “store” your assets.
The second step is choosing a cryptocurrency exchange to buy from. Some exchanges will have a KYC protocol, which you would need to confirm your identity - this includes your name, birthday, and residential address. It might be the most tedious part of buying cryptocurrencies.
Once you have verified your identity, you can link your bank account to deposit and execute a trade from your real-world currency (fiat) to cryptocurrency.
To finish, you can either store your bought cryptocurrencies in the exchange’s dedicated wallet or to your own hardware wallet. See the difference between a software and a hardware cryptocurrency wallet here.
Is It Possible to Use Canadian Credit Cards to Buy Crypto?
Unfortunately for Canadian-based traders, most Canadian credit card companies have blocked any transactions between their credit cards to cryptocurrency exchanges. The options are limited but purchases are still available, but with relatively high transaction fees.
Other options for buying cryptocurrency in Canada include e-Transfer, Funds Transfer, bank wires, direct purchase through Debit, or Peer-to-Peer transactions.
Is It Legal To Buy Cryptocurrency in Canada?
Purchasing and possessing cryptocurrencies in Canada is not illegal in and of itself. Bitcoin may be bought, sold, and traded in any province of Canada without any risk of getting arrested. Not only that, but the Canadian government has also classed Bitcoin or cryptocurrency in general as a commodity, and as a legitimate investment asset.
Holding cryptocurrencies in a digital currency wallet and being a crypto trader in Canada is completely legal as well. You can think of trading cryptocurrencies as bartering gold and other precious metals that can be stashed or traded but without any legalities holding you back.
Not only that, some businesses and other independent establishments can accept cryptocurrencies as a payment for a specific product. However, it is not legal tender and cannot be used as a way of paying taxes, not unless it is traded back to the country’s fiat currency – the Canadian dollar
Buy Cryptocurrency Directly Through Your Bank Account: Is it possible?
Another problem of purchasing cryptocurrency in Canada is the lack of direct bank transfers. Direct bank transfers are prohibited by all known bank firms as a method of topping up an exchange or directly purchasing Bitcoin or any other cryptocurrency. Other top-up methods, however, include debit and credit card transfers (with much higher fees) or Peer-to-Peer transactions (P2P).
Are There Lots of Bitcoin ATMs in Canada?
Unlike a traditional ATM, a Bitcoin ATM generates blockchain-based transactions that transmit cryptocurrency to the user’s digital wallet. Despite their use, Bitcoin ATMs do not dispense cash. Instead, they are kiosks that link to the Bitcoin network and allow clients to acquire crypto tokens using fiat currency. Many countries, including Canada, already use similar technology. There are currently 2,216 Bitcoin ATMs in Canada.
- Enter your phone number and other forms of identification, then confirm.
- Open the Deposit tab on your cryptocurrency wallet, then create a QR code and scan it to the machine. The computer then checks your wallet’s details with a pop-up on its dedicated monitor, after which you can advance to the next step.
- Enter the value of your coin in fiat currency (CAD) into the computer.
- Confirm the total and complete the transaction.
The coin you purchased will subsequently be reflected in your cryptocurrency wallet. This takes a few minutes, but if it does not reflect, contact customer service.
The Best Hardware Wallets for Canadians
Crypto Wallets or Bitcoin Wallets are specialised wallets that allow you to “store” your cryptocurrency funds while also protecting them from hackers. There are two main types of cryptocurrency wallets – Hardware (cold) and Software (hot) wallets, that have different limitations and levels of security. Read on to discover what are the different cryptocurrency wallets that are the best for Canadian traders.
Hardware or Cold wallets
- Ledger Nano X. This is a hardware wallet that is the best and simplest solution to store your Bitcoin and other crypto assets offline. This allows you to protect your crypto assets from dangerous online threats. Even for a rookie, setting things up is really straightforward. However, some first-time investors believe that $150 is too much to invest in.
- Ledger Nano S. Just like its successor, it is a hardware wallet that is a much more affordable alternative for it. This allows you to protect your crypto assets from different online threats. However, being an earlier model, it has a significantly lower number of features but with a cheaper price of just $59, which is less than twice its successor.
- Trezor T. This is another popular cryptocurrency hardware wallet that supports an astonishing 1,800 coins and tokens. Trezor T provides superior security, additional protection, and access verification. However, the model’s cost of $300 might be steeper for most beginner investors.
- KeepKey. This is another cheaper alternative for the bigger brands of hardware wallets. Though falling short in terms of supported cryptocurrencies, KeepKey’s more affordable price makes up for its shortcomings. Being priced at $49, it is one of the cheapest hardware wallets currently on the market.
Software or Hot Wallets
- Exodus wallet is one of the most famous cryptocurrency wallets that makes its name with its easy-to-use interface and its extensive list of security features. Exodus wallet supports over 150 cryptocurrencies, as well as its support to exchanges and DeFis.
- JAXX Liberty is a free app that includes a blockchain explorer, market statistics, and support for over 80 cryptocurrencies. However, it is not the greatest wallet for beginners due to its inability to allow users to acquire crypto assets directly through the app with their own money.
- Electrum. Electrum is a software wallet that made its name with its versatility and extensive security features. However, the Electrum wallet is solely dedicated to bitcoin assets and has the best security of any software-based crypto wallet.
Atomic Wallet is a crypto wallet that has a unique “buy crypto” feature that allows users to directly buy supported cryptocurrencies using bank cards. It also has a really easy-to-use software interface, making it a suitable choice for new and experienced cryptocurrency investors.
Frequently Asked Questions
Purchasing Bitcoin from a reputable cryptocurrency exchange is the most secure method. Those that have a clean record and are open and honest with their consumers. However, completing your own research into various cryptocurrency exchanges and ways to top it up remains the best option for each individual.
Yes. All Canadian-based and most internationally based crypto exchanges support buying Bitcoin or cryptocurrency with Canadian dollars.
Yes. Though the company doesn’t offer an exchange of their own, you can set up a third-party exchange that you will need to buy crypto using your linked TD Bank account.
- The first step is to choose a cryptocurrency exchange and then create an account on it.
- Once done, link your TD Bank account to the said exchange.
- To finish, find your desired cryptocurrency in the chosen exchange, and execute a fiat-to-crypto trade using your TD Bank account.
Another thing to keep in mind when opening an exchange account, and buying and selling cryptocurrencies in Canada is the Income Tax Act. In accordance with the act, the Canada Revenue Agency regards bitcoin as a commodity that might result in capital profits or losses. Once you have earned an income, you must pay taxes on it. Sending, receiving, and trading bitcoins are all taxable transactions.