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. In contrast to a mutual fund, nevertheless, an ETF could 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 straightforward option to get bitcoin into your portfolio, as a result of if you have already got a brokerage account, there aren’t any extra steps you could take in an effort 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, Function 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 nicely forward of the U.S., the place cryptocurrency ETFs had been simply authorized 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 features on cryptocurrency are taxable in Canada, until you put money into a crypto ETF and maintain it inside a tax-free savings account (TFSA) or, with sure situations, a first home savings account (FHSA). Learn extra about cryptocurrency and taxes and holding crypto ETFs in registered accounts.
Watch: How you can purchase bitcoin in Canada
Holding bitcoin immediately
Whereas ETFs are handy, they don’t mean you can maintain bitcoin immediately. This is likely to be fantastic for a extra passive or much less skilled investor, however for those who do need to maintain bitcoin immediately, the simplest option 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 need 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 need to make investments. Are you interested by just one kind of cryptocurrency, or are you seeking to put money into a number of? Which cost strategies do you propose 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 nicely, you could be completely positive that the trade you select is reliable, and can have the ability to provide assist do you have to want it. place to start out is MoneySense’s listing of top crypto platforms in Canada. The entire firms have been authorized to do enterprise in Canada by securities regulators.
Backside line
Whereas some folks will probably be completely happy to carry crypto inside a pre-selected basket of securities, for many who want to maintain bitcoin and different crypto cash immediately, it’s vital to attach with a platform that stays abreast of regulatory necessities and provides peace of thoughts that the money you utilize to fund your account, in addition to your bitcoin, is protected.
And, after all, don’t make investments greater than you may afford to lose. Crypto is a unstable speculative asset, and crypto regulation in Canada continues to be evolving. Strategy with warning.
