Shopping for bitcoin by way of an ETF
An ETF (exchange-traded fund) is a “basket” of securities (groupings of particular person shares, or authorities and company bonds) that you just purchase in a single buy, much like a mutual fund. Not like a mutual fund, nonetheless, an ETF may be purchased and bought on a inventory trade all through the buying and selling day—identical to a inventory. In addition they carry decrease charges than mutual funds.
ETFs are a simple strategy to get bitcoin into your portfolio, as a result of if you have already got a brokerage account, there aren’t any further steps it’s good to take as a way to buy a bitcoin ETF. On the time of this writing, there are a dozen crypto ETFs in Canada, some holding bitcoin, some holding ethereum, and a few holding each. The very first, Goal Bitcoin ETF (BTCC), launched on the TSX in February 2021, adopted by Evolve’s Bitcoin ETF (EBIT) and CI’s Galaxy Bitcoin ETF (BTCX). This places us properly forward of the U.S., the place cryptocurrency ETFs had been simply permitted in 2024. As with all ETFs, you should purchase and promote them by way of a conventional or online brokerage. One profit of shopping for crypto through ETFs is that you just don’t have to handle a crypto pockets and the “personal keys” to entry it.
Observe that capital positive factors on cryptocurrency are taxable in Canada, except you spend money on a crypto ETF and maintain it inside a tax-free savings account (TFSA) or, with sure circumstances, a first home savings account (FHSA). Learn extra about cryptocurrency and taxes and holding crypto ETFs in registered accounts.
Watch: How one can purchase bitcoin in Canada
Holding bitcoin immediately
Whereas ETFs are handy, they don’t help you maintain bitcoin immediately. This is perhaps positive for a extra passive or much less skilled investor, however should you do wish to maintain bitcoin immediately, the simplest strategy to get began is to open a “digital pockets” through a web-based crypto trade, additionally known as a crypto buying and selling platform.
Now, that is the place you wish to spend a while doing analysis, as a result of on-line exchanges fluctuate wildly by way of options, advantages and safety. Begin with the way you wish to make investments. Are you curious about just one sort of cryptocurrency, or are you trying to spend money on a number of? Which cost strategies do you plan to make use of for purchases (through hyperlink to your Canadian checking account, or pay with crypto you already personal, for instance)? Would you like the choice of buying and selling in your smartphone?
As properly, it’s good to be completely certain that the trade you select is reliable, and can be capable of provide help must you want it. A superb place to begin is MoneySense’s listing of top crypto platforms in Canada. The entire firms have been permitted to do enterprise in Canada by securities regulators.
Backside line
Whereas some folks shall be blissful to carry crypto inside a pre-selected basket of securities, for individuals who want to maintain bitcoin and different crypto cash immediately, it’s necessary to attach with a platform that stays abreast of regulatory necessities and gives peace of thoughts that the money you employ to fund your account, in addition to your bitcoin, is protected.
And, in fact, don’t make investments greater than you possibly can afford to lose. Crypto is a unstable speculative asset, and crypto regulation in Canada remains to be evolving. Method with warning.
