How to Buy Bitcoin in Canada
A guide on how to buy bitcoin in Canada with Netcoins
The short (most common) answer to how to buy bitcoin in Canada is: find a crypto exchange, brokerage or platform like Netcoins, create an account, fund it, and start trading. Read on to learn more about the first cryptocurrency ever created, and for more details on how to buy bitcoin and other frequently asked questions that come up in the process.
“Bitcoin is the oldest and most popular cryptocurrency. It is often compared to gold.”
IBitcoin was the first cryptocurrency created in 2008 by pseudo-anonymous creator, Satoshi Nakamoto. It was created to offer a “peer-to-peer digital cash system” whereby two parties can transact directly without having to go through a financial institution. This important trait of bitcoin is called decentralization.
Bitcoin is often compared to gold because of its limited supply and its potential as a store of value. It does have some distinct differences from your conventional money like Euros, USD, and CAD though. It exists only virtually and unlike traditional money that can be printed constantly, there is a limited supply of bitcoin – 21 million to be exact, which helps to ensure true scarcity.
When buying bitcoin, some prefer to stick to Canadian crypto exchanges/platforms due to the ease of funding with Canadian dollars, but there’s also a handful of international crypto exchanges that Canadians can leverage. If you are wondering how to buy bitcoin in Canada, Netcoins is a publicly-traded, fully regulated crypto trading platform based in Canada. With 0% funding fees, free cash withdrawals, and live customer support service seven days a week, we make it simple for Canadians to buy BTC and other cryptocurrencies.
How to Buy Bitcoin in 3 Steps
Create an Account
Sign up for an account and provide some personal details to get your account verified.
Fund (No Fees)
Fund your account with a crypto deposit, Interac e-Transfer, or a bank wire.
Go to the trade page and enter in the amount you’d like to buy or sell. Start with $10 or more. You decide!
Rapid Transaction Times
0% Funding Fees
Free Cash Withdrawals
Fund and withdraw quickly. Buy and sell instantly. Get your money or crypto in and out easily.
Get verified at lightning speed with our automated KYC process. Get help from our support agents if needed.
Top Rated Support
Our support team is available over email, phone, and live chat to answer all your questions clearly and quickly.
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How Safe is Bitcoin to Invest in?
Since its launch in 2009, bitcoin inspired the creation of thousands of alternative cryptocurrencies (called ‘altcoins’ for short). However, bitcoin is unique in that it’s decentralized, public for the world to use, and scarce (its limited supply is capped at 21 million bitcoin).
Scarcity can play a key role in providing value to an asset. Much like scarcity helped gold maintain its value for 10,000 years, bitcoin’s scarcity should also help bitcoin maintain its value in the long-term. That’s why many people, corporations and institutions are turning to bitcoin. They see bitcoin’s scarcity as a way to maintain their wealth and protect it from a loss of purchasing power created by inflation. To them, bitcoin is a safe haven asset and the ultimate way to hedge against risk in a time of extreme economic uncertainty.
Having said that, bitcoin is still considered a risky investment. Although bitcoin has made overnight millionaires, it has also made people lose all their savings. After all, volatility works in both directions. High volatility assets can work in your favour and yield great potential for return, but they can also work against you by causing you to take on big losses. That is why it’s important to heed the age-old advice: never invest more than you’re ready or willing to lose.
It’s ultimately up to you to decide how much you wish to invest in bitcoin. The beauty of bitcoin is that anyone, anywhere around the world can buy fractions of a bitcoin. If you decide to buy bitcoin but are not sure how much to buy, you can start by practicing any one of these strategies:
- Investing a percentage of your wealth into bitcoin (like 1% or 10%)
- Dollar-cost-averaging (buying a set amount of bitcoin every day, week or month)
- Buying the dip (buying when bitcoin prices decrease)
- Starting with as little as $10 to test it out yourself.
Finally, it’s important to zoom out. When zooming out, you’ll notice bitcoin generally trends upward despite taking small dips along the way. When we zoom out we can see that bitcoin has been the best-performing asset of the decade outperforming real estate, gold and the S&P 500.
Finally, it can be wise to build an investment portfolio that has a mix of traditional assets (like real estate, gold, stocks) and non-traditional assets (like bitcoin) in order to protect your wealth.
Is Bitcoin Legal in Canada?
In Canada it is legal to buy, sell, exchange, spend and mine (produce) bitcoin. It is also legal to make a profit when you sell your bitcoin for more than it was originally purchased for. Buying bitcoin in Canada is allowed by the regulatory bodies in Canada.
While bitcoin is legal, it is not considered legal tender. Legal tender are banknotes that are accepted as a form of payment for a debt. In Canada, the Canadian Dollar is considered legal tender. To be more precise, banknotes issued by the Bank of Canada under the Bank of Canada Act and coins issued under the Royal Canadian Mint act are considered legal tender.
Although bitcoin is not legal tender, this does not prevent Canadians from using bitcoin to buy goods and services wherever merchants accept them – similar to how the U.S. dollar is accepted wherever merchants accept them. The difference is, merchants will need to settle payments and debts in Canadian dollars to the Canadian government and banks.
Most Canadians will simply buy bitcoin as an investment. They’ll either cash out to make a profit or they’ll hold onto their bitcoin in the hopes it will appreciate in the future. In either case, they are acting within the rule of the law.
Fun fact: Netcoins became the first publicly-owned, fully regulated crypto trading platform in Canada.
Is Bitcoin Taxable in Canada?
Yes, bitcoin is taxable in Canada. According to the Canadian Revenue Agency, bitcoin is treated as a commodity.
“The CRA generally treats cryptocurrency like a commodity for purposes of the Income Tax Act. Any income from transactions involving cryptocurrency is generally treated as business income or as a capital gain, depending on the circumstances. Similarly, if earnings qualify as business income or as a capital gain then any losses are treated as business losses or capital losses.” Learn more here.
Because the majority of Canadians simply buy and sell bitcoin, most Canadians will fall under the trading category. In this case, the trade would typically be taxed as a capital gain. A capital gain is an increase in an asset’s value (or profit) and is taxed when these gains are realized (or sold). Put another way, you have a capital gain when you sell your bitcoin or are considered to have sold your asset.
Here’s an example. You sold all your bitcoin for $70,000 CAD but you originally bought it for $30,000 CAD. Your capital gain is $40,000 CAD.
In Canada, 50% of your capital gains are taxable. So of the $40,000 profit you made upon selling, you would have to report $20,000 as income for your taxes on Section 5 on Schedule 3 of your income tax return.
Capital loss is the inverse. It’s when the value of your investment decreases from the original price you bought at. Capital losses can be used to offset capital gains and reduce the overall tax you have to pay.
It’s important to note that various crypto-related activities like selling, converting crypto to crypto (ex: bitcoin to ether), gifting, mining and so on get taxed differently. Consider this post for informational purposes only. For proper financial advice, we recommend you speak to your tax professional.
Related article: Is Crypto Taxed in Canada?
How Much Bitcoin Can I Buy?
You don’t need to buy 1 entire Bitcoin to get started! You can buy fractions of a bitcoin. In fact, the smallest possible unit of BTC is called a satoshi (sats for short) and is equivalent to 0.00000001 BTC (8 decimal places). Many beginners start their Bitcoin journey by stacking sats. You can start as small as $10, or invest up to $10 million with Netcoins.
How to Store Your Bitcoin?
You can buy bitcoin from crypto trading platforms, like Netcoins, and leave your bitcoin inside the platform. However, there are much safer options to storing your bitcoin as leaving them in exchanges can expose them to certain risks like hacking and theft.
The safest option to keeping your bitcoin secure is to transfer them into a bitcoin wallet. A bitcoin wallet is a type of digital wallet that is used to send and receive bitcoin, similar to a Google wallet or a physical wallet.
There are four different types of bitcoin wallets: hardware wallets, desktop wallets, mobile wallets and web wallets.
Hardware wallets look like a USB device. They are considered to be offline wallets because they’re not connected to the internet. The fact they’re offline makes them more difficult to find and to hack. As such, they’re typically considered the safest option to store your bitcoin.
Desktop wallets on the other hand are programs that store your bitcoin on your computer’s hard drive. Mobile wallets perform the same function as a desktop wallet but on a mobile device instead.
Finally, a web wallet is an online service that sends and stores your bitcoin on your behalf anywhere, anytime. Similar to checking your email.
Desktop, mobile and web wallets are all connected to the internet (and referred to as “hot wallets”). Like mentioned earlier, they are more susceptible to potential risks. On the other hand, hardware wallets (or “cold wallets”) are considered safer options as they are not connected to the internet.
This is why it’s often advised that Canadians pull out their bitcoin from crypto trading platforms and send them directly to a hardware wallet. Only in this way, are they in full possession of their bitcoin and can keep them secure.
Related article: How are Cryptocurrencies Stored and Received?
Why Buy Bitcoin?
Bitcoin gives control back to the people. In a traditional (centralized) money system, only the government and people of great power get to control the supply and worth of money. The fact that it’s a new asset class is also exciting. You’ll find that a lot of people buy bitcoin for investment purposes and as an alternative to hard assets like gold.
Related article: Part 2: How Banks Make Money
Bitcoin is also great for online payments because of the low fees and its ability to go across borders quickly. Here are four more reasons why people buy BTC:
Bitcoin is decentralized. No single institution or person controls the bitcoin network, which helps to maintain its integrity. It is run by a distributed and open network of dedicated computers.
There is a finite supply of bitcoin. The number of new bitcoin created every 10 minutes will decrease at every halving until the maximum of 21 million is reached. This is programmed in its algorithm.
Bitcoin is highly divisible. Bitcoin can be bought in fractions, the smallest unit being called a satoshi. That is one hundred millionth of a bitcoin (0.00000001). This allows for micro-transactions and allow investors to start small.
Bitcoin transactions cannot be reversed, unlike electronic fiat transactions. This also means that transactions that have been recorded on the network cannot be tampered with or modified. It’s on the blockchain for all to see!
Is Bitcoin a Good Investment in 2022 & Beyond?
2021 was a historic year for bitcoin:
- Corporations like MicroStrategy and Tesla put bitcoin into their balance sheets.
- Macro traders like Paul Tudor Jones, Stanley Druckenmiller and Ray Dalio said bitcoin is a storehold of value.
- Investment banks like JP Morgan, Citibank and Goldman recognized the importance of bitcoin and suggested people put a small portion of their wealth into bitcoin.
- Finally, small nation states like El Salvador began adopting bitcoin as legal tender.
Never before have we seen bitcoin get global recognition as a new store of value asset like we did in 2021.
Part of the reason why bitcoin accelerated in 2021 was due to the COVID-19 pandemic. When the pandemic hit, governments and central banks were forced to print trillions of dollars in order to keep their economies afloat. But too much money in the economy created inflation and diluted the value of the dollar (and ultimately shrank people’s savings).
Related article: Reasons for Bitcoin’s New All-Time-High
In a desperate attempt to protect their wealth, investors looked for alternative assets that would not lose value, were not prone to hyperinflation and were not affected by governments and central banks. They found bitcoin. It’s no surprise we saw record new prices for bitcoin in 2021. But this growth won’t stop here. If anything, demand for bitcoin will continue to grow in 2022.
As economic uncertainty rises, many investors will continue to turn to bitcoin in 2022. Many of these big, financial players will keep buying billions of dollars worth of bitcoin, which will reduce the amount of bitcoin left to purchase and increase its price to ones we’ve never before seen.
Despite what most people believe, it’s still early for bitcoin. 2022 will be an exciting year for bitcoin. You can get started by buying as little as $10. After all, history shows us that a small portion of bitcoin today can go a long way in a few years. There’s no better time to buy bitcoin than today.
This post is for informational purposes only. For proper financial advice, we recommend you speak to a financial advisor.
Frequently Asked Questions
Why buy bitcoin?
Bitcoin is a great way for investors to diversify their portfolio by having non-traditional assets (bitcoin mixed in with traditional assets (gold, real estate, stocks).
People invest in bitcoin for three main reasons:
- They believe it’s the future of money
- It’s potential as a store of value
- As a hedge against inflation
Bitcoin has actually been the best performing asset over the last 10 years, outperforming the S&P500. Even major institutions and corporations have invested in bitcoin.
Now that you know a little more about how to buy bitcoin and why it’s a good investment, trust Netcoins to help you. We make it easy to buy bitcoin crypto so that you can buy as much as you like – or as little as $10 – in a quick and easy way. Contact us if you need support.
Are there any risks involved if i buy bitcoin?
All forms of investments carry with them an inherent level of risk so you should never invest more than you’re willing or ready to lose.
Cryptocurrencies like bitcoin are known to be volatile and the price fluctuates quite a bit on a day-to-day basis. What’s important to understand as well is to zoom out and look at the bigger picture.
If you do buy bitcoin, also remember to properly secure your account with Two Factor Authentication and follow security best practices!
How much bitcoin should i buy?
A common misconception is that you have to buy 1 entire bitcoin, but you can actually buy fractions of bitcoin. You can start off with as little as $10, or invest a certain % of your wealth.
Many beginners start off by dollar-cost averaging in, which is the practice of putting in a set amount of money towards bitcoin in regular intervals (for example $100 every month).
Why is KYC (Verification) required?
KYC is a process that allows us to verify the identity of our customers, as per Canadian regulations.
What do I need to provide for your verification process?
You will have to provide your email address, phone number and personal information including your first name, last name, address, date of birth and a piece of identification (like a driver’s license). Most users are verified at this point through our automated process.
If you don’t pass the automated KYC process, you will have to go through an additional document verification stage. This is important and required as we are a regulated money service business in Canada.
How can I fund my account?
Your Netcoins account can be funded with a cryptocurrency deposit, Interac e-Transfer, or a bank wire transfer. There are no funding fees imposed by us.
Once you have funds in your Netcoins account, you’ll find that it’s super easy to buy bitcoin in Canada.
Can I send my crypto to an external wallet?
Yes, you can either keep a crypto balance within your Netcoins account or withdraw it into your own external wallet. While FIAT withdrawals are free, there is a small withdrawal fee associated with crypto withdrawals.