Remember when you had to transfer a huge sum of money for a project, and you realized how much bureaucracy you had to undergo before you were able to access the money and then before you could make the transfer?
What of the other time when you had to make a donation without revealing your identity and you had to really think outside the box to fulfill your intent.
Satoshi Nakamoto came in and solved that problem with a revolutionary tool called Bitcoin.
Instead of relying on a central authority like the banks or government, the Bitcoin concept hinges on using cryptography to track the production and transfer of money.
Bitcoin is a peer-to-peer payment system. Peer-to-peer refers to the fact that no central authority creates new money or keeps track of transactions. The network manages these activities.
If you live in Canada, Bitcoin is legal in Canada, despite the fact that digital currencies are not formally recognized as money.
Tax restrictions do apply to digital currency transactions, according to the Government of Canada website, and cryptocurrencies like Bitcoin are subject to the Income Tax Act.
As a result, Canadian people can buy, sell, and exchange Bitcoin as anti-money laundering and anti-terrorist financing legislation governs it.
Read on as this article shows you the best ways to buy Bitcoin in Canada.
What’s the big deal with Bitcoin in Canada?
The standard-bearer of cryptocurrencies has seen its value skyrocket. Despite some significant volatility over the years, a $1,000 purchase of bitcoin in 2010 (one year after the currency was established) was worth approximately $287.5 million at the end of 2022.
When bitcoin reached an all-time high of more than $64,000 in April 2022, the same investment became worth $800 million—at least for a while.
Cryptocurrency has become such a sensation that some of the most well-known names in global business have jumped on board.
Most notably, Tesla bought $1.5 billion in bitcoin in February 2022 and revealed plans to accept it as payment for its cars.
Paypal, Starbucks, and Yum! Brands (parent company of KFC, Pizza Hut, and others) are only a few of the businesses that support or are testing bitcoin payments.
From January of 2018, Google Trends data for the term “Bitcoin” searched within Canada shows a decline in interest. This could be related to the bull market that Bitcoin has seen in 2018.
As Bitcoin’s price rises, interest picks up again in mid-2019. Despite the current market, the Bitcoin community in Canada is vibrant and active.
As indicated by the Bank of Canada survey, community activity both online and offline, and the large number of Bitcoin ATMs dispersed around the country, the country has a high level of awareness and involvement.
Check Out: 7 Legit Ways On How To Earn Bitcoins For Free | Totally Free
Why You Should Buy Bitcoin in Canada
I heard about Bitcoin several years ago, and I wondered what all this craze was about. Over the years, I went from being skeptical to being apprehensive about missing out from a one in a lifetime opportunity to being “whew! thank God I didn’t make the jump” to, “am I really sure I shouldn’t have done this”
I couldn’t just learn about it and then act on it. No, I kept arguing, asking and postponing it. Perhaps you’re in the same situation.
After all, the price of Bitcoin has risen steadily since its inception in 2009, from $0.01 to $67,529.78 per coin. If you or I had kept 1 BTC through all the trials, the average monthly growth would have been 28 percent over the course of 9 years.
So, is it worthwhile to invest in Bitcoin in 2022? Is it secure? Can you buy Bitcoin now or hold off? And how much Bitcoin do you invest in?
Is Bitcoin a Decent Investment?
That’s why you are here, right?
Let’s look at some considerations:
#1. Bitcoin’s rules are unchangeable and therefore will continue to be scarce.
Although new coins are mined and added to the circulating supply regularly, Bitcoin will never exceed its 21 million coin supply limit.
That is a permanent rule that is also open to the public. The rule cannot be changed. Also, one of the primary reasons Bitcoin’s value has risen so drastically is its scarcity. There will never be over 21 million Bitcoins.
#2. Bitcoin is Transparent
Bitcoin has two characteristics that no other currency in the world, not even the US dollar, possesses: decentralization and transparency. The Federal Reserve is less transparent than Bitcoin.
Ask yourself these questions and see if you can give accurate answers:
- How much does the Federal Reserve print every day?
- Where exactly does the tax you pay go?
You most probably couldn’t give any answer, and that is enough proof to show a lack of transparency in fiat money
Those questions can be answered about bitcoin, you know.
#3. Canada Legislature and Adoption rate is good
Canada was the first country to approve cryptocurrency legislation in 2014, but it took some time to implement.
In Canada, there is a large Bitcoin culture, and proper regulatory measures have been taken to accept the virtual currency.
In Vancouver, more than a half-dozen businesses welcome bitcoin. Nearly 40 ATMs sell bitcoin to locals. On October 29, 2003, the world’s first bitcoin ATM opened its doors at Waves Coffee House in downtown Vancouver.
#4. Bitcoin is an excellent alternative to gold
We now live in a digital era. Bitcoin heralds a new age in finance: digital scarcity.
A gold bar weighs around 25.7 pounds, but Bitcoin is weightless and can be purchased, sold, and transferred with the flick of a finger.
Shouldn’t we demand a kind of digital gold because we spend so much time in our digital world? We need something electronic, tamper-proof, portable, and safe.
How to Buy Bitcoin In Canada In 2022?
#1. Via Online Exchanges
Because of their ease of use and simplicity, not only for Canadians, but for people all over the world, online exchanges are the most commonplace to buy Bitcoin. VirgoCX, MyBTC.ca, Bitbuy, NDAX, and Bitvo are some of the most common exchanges in Canada. Here is a simple guide to buying Bitcoin through online exchanges
- Create an account on an exchange and request to fund your account with Canadian dollars via Transfer
- Log into your online banking provider and send the e-Transfer to the e-mail address provided by the exchange
- The exchange will accept the e-transfer and credit your account
- Buy Bitcoin and withdraw it to a secure wallet.
We suggest MyBTC.ca and Bitbuy as two of the quickest places to buy Bitcoin using Interac e-Transfer, and it is possible to finish steps 1-4 in under an hour during normal business hours.
#2. Via Peer-to-Peer Network
Unlike decentralized exchanges, which match buyers and sellers anonymously and facilitate all aspects of the transaction, some peer-to-peer (P2P) exchange platforms allow users to interact more directly.
An example of such an exchange is LocalBitcoins. After creating an account, you can post requests to buy or sell Bitcoin, including payment methods and price details.
You then look through lists of buy and sell deals, selecting trade partners with whom you want to do business. LocalBitcoins facilitate some elements of the trade.
Although P2P exchanges do not provide the same level of anonymity as decentralized exchanges, they allow you to shop around for the best price.
Many of these exchanges also have ranking systems, allowing you to assess potential trading partners before engaging in business.
- Register an account on their site that will give you a secure online bitcoin wallet
- Search for local advertisements
- Choose to engage an advertisement from a trader with a good reputation and track record.
- Pay the seller via one of the payment options listed.
- Mark the payment complete.
#3. In-person Retail Location
Are you the sort of person who likes to do all of your shopping in a store and speak with a real person? You might look into a Bitcoin brokerage or a foreign exchange center that also accepts cryptocurrency.
MyBTC.ca, based in Canada, allows you to pay with cash or an Interac Debit card at 6,000+ Canada Post locations around the country, while Netcoins allows merchants to sell Bitcoin and other cryptocurrencies at thousands of locations.
If you live on the West Coast, you can look into Bitcoiniacs, which operates in-person Bitcoin shops, ideal for those who want to talk with an actual person when making their purchase.
#4. Via Bitcoin ATMs
Using a Bitcoin ATM is one of the older and most out-of-date methods of purchasing Bitcoin in Canada.
This is one of the best choices for users who want to buy Bitcoin with cash while remaining anonymous, but it comes at a cost.
Bitcoin ATMs usually charge fees that are 6-8 percent higher than the market price. There are hundreds of Bitcoin ATMs around the world, and you’ve probably seen one at a mall or convenience store.
You can use Coin ATM Radar to locate the nearest Bitcoin ATM to you.
Indeed, we have the most Bitcoin ATMs per capita of any country on the planet! (I guess we like our Bitcoin here in the great white north).
#5. Over-the-Counter (OTC)
An OTC trade is a private transaction between two parties that is not supervised by an exchange. If you want to buy a huge amount of Bitcoin ($25,000 or more) at once, OTC is the way to go because it protects you from a market phenomenon known as slippage.
Slippage occurs in Bitcoin transactions when the amount of Bitcoin purchased exceeds the amount available at the current quoted price. You end up paying more than your quoted selling price when part of your order ‘slips’ to the next available (higher) sale price.
Essentially, buying massive quantities of Bitcoin through an OTC provider saves the buyer money by saving them from slippage.
Buyers can typically expect to pay 2-5% greater than the market price when doing an OTC transaction, which can fluctuate, based on fees and market conditions.
Both VirgoCX & Bitbuy offer an OTC desk with competitive rates so head on over and create an account in order to get started.
If you want to buy Bitcoin using an OTC provider, we have outlined the steps below:
You will need to find out which Bitcoin trading platform platforms offer OTC services then sign-up and create an account.
We recommend Bitbuy as the fastest and most trustworthy place to conduct an OTC purchase
Steps to follow when using an OTC for Bitcoin purchase
- After you create an account on Bitbuy and get verified, request to be contacted by one of their OTC traders
- Get a live price quote from that OTC trader
- Lock in a price
- Send a bank wire (please refer to the information above)
- Receive the Bitcoin and withdraw it to a secure wallet.
*Please note other OTC providers may have a different process as to how they conduct transactions but for the most part will be very similar to the process above
Local Exchanges where you can buy Bitcoin in Canada
Aside from bitcoin, Coinsquare offers a few other cryptocurrencies for trading, including Ethereum, XRP, and Litecoin. Bitcoin can be purchased with CAD, and the fees of 0.2 percent are reasonable.
Deposit fees for Interac, Flexepin, money orders and bank draughts are fair at 2.5 percent. Wire transfer deposits incur a fee of just 0.5 percent, while credit card deposits incur a fee of 10%.
Withdrawal options are limited to direct bank deposit, charged at 2% with a $100 minimum, or wire transfer, charged at 1 – 2% with a $10,000 minimum.
Coinsmart allows you to buy Bitcoin in Canadian dollars directly with a credit or debit card for a 6% transaction charge.
When it comes to using the trading site, the fees for financing are 0% for wire transfers and up to 6% for credit card deposits. Deposits of $2000 or more are free of charge through e-transfer. Smaller deposits cost 1.5%.
Once your account is funded, buying BTC with CAD costs a trading fee of 0.2%, and withdrawing the BTC from the exchange costs an additional 0.0005 BTC fee.
Shakepay is a Montreal based company that allows you to buy and sell Bitcoins free of any fee (deposit, withdrawal and trading). Shakepay accepts Interac eTransfers and wire transfers only (no credit/debit cards).
The company also provides useful features such as converting spare change into Bitcoins by rounding up transactions to the nearest dollar, and both novice and experienced investors like this exchange due to its relative pace in funding.
Bitbuy has been around since 2016 and allows you to trade seven different cryptocurrencies, including bitcoin. It can be funded quickly using Interac e-Transfers or wire transfers, but not with a credit card.
Because it caters to Canadian traders, the BTC/CAD pair may have more liquidity. It is controlled, secure, quick, and reliable. Interact e-Transfer, withdrawal, and wire-transfer withdrawal all cost 1.5 percent.
The wire-transfer funding fee, on the other hand, is 0.5 percent. Meanwhile, the express trade fees amount to about 0.5%, whereas Pro-traders pay 0.1% if they are a miner and 0.2% if they are a buyer.
International Exchanges where you can buy Bitcoin
Coinbase allows you to purchase bitcoins with a credit card and receive them instantly. This US exchange is one of the most user-friendly places to buy Bitcoin, making it great for beginners. There’s very high liquidity, along with high buying limits, but one issue is that your transactions are tracked, which is a privacy concern.
CEX.IO is a London-based exchange on which you can buy Bitcoin via credit card or bank transfer. Canada is one of many countries this Bitcoin exchange supports. CEX.IO is an easy exchange to use and is known to be reliable, but bear in mind that it has higher fees. You can read my complete CEX.io review here.
Coinmama operates in over 200 countries worldwide, including Canada. One of the main advantages of this Bitcoin exchange is that you can purchase with a credit or debit card. It’s also an easy platform to use for beginners. However, there’s a 5.5% fee on each purchase, which is high compared to many Bitcoin exchanges.
Limitations of Buying Bitcoin in Canada and How to Overcome Them
Bitcoin Exchange Limits
Be aware that you will always face some kind of limits while purchasing Bitcoin, irrespective of the nature of the payment method you use.
There will be often very strict payout limits, if you choose to pay for your Bitcoin order with a debit or credit card, but when you use other digital currency to buy Bitcoin, then you may not be subject to the same purchasing limits.
Still, there will always be fees and charges associated with the transaction, no matter which exchange you use to buy Bitcoin from.
Expected Payout Times
When selling Bitcoin for a digital currency exchange, you may have to wait for several days for the payment to reach your bank account. If you wish to receive cash quickly, then it would be better for you to use a crypto currency debit card.
Bulk Buy Discounts
Another thing worth knowing is that if you are planning to place a large order for the purchase or sale of Bitcoin, then you may benefit from a discount in regards to the fee and charges you will have to pay upon execution of the order.
So, if you are thinking of buying a lot of Bitcoin, then hunt for an exchange that will reduce the fees and charges for bulk orders.
Do Canadian Banks Accept Bitcoin?
According to a Bloomberg article, the National Bank of Canada still allowed cryptocurrency transactions in February– but that was before BMO, Scotiabank, TD Bank and RBC implemented their new cryptocurrency restrictions.
Is Bitcoin Taxed in Canada?
The CRA considers bitcoin to be a currency for tax purposes. As a result, whether you treat or use bitcoin as an investment asset or for purchases, you will have to pay taxes on it. As seen below, every “disposition” of bitcoin is taxable:
- Selling it for CAD
- Giving it to someone as a gift
- Trading it for another crypto or CAD
- Using it to buy goods and services
Is Bitcoin Appropriate for Transactions?
Bitcoin can be used for purchases in Canada with any vendor, service provider, e-Commerce company, or business that accepts this medium of payment.
The transaction’s value will be measured for tax purposes based on the market value of bitcoin at the time or day of the transaction, rather than the perceived value of the transaction.
FINAL REMARKS
I hope this guide on how to buy bitcoin in Canada gets you off to a good start. The amount of capital you have and your investment goals will heavily influence your exchange selection and bitcoin purchasing strategy.
If you just want to dip your toes into this lucrative market and give it a shot, you should consider the exchange with the lowest fees, even if it has sluggish funding processes and overall limits, you would want to choose the exchange with the lowest fees.
Peradventure you want to buy right away, you will need to find an exchange that will assist you in getting started as soon as possible.
Hopefully, this guide has answered most of your questions about purchasing bitcoin.
REFERENCES
- cryptomaniaks.com – Should I buy bitcoin? 10 Reasons why Bitcoin is a good investment in 2022
- 99bitcoins.com – How to buy Bitcoin in Canada
- legalgamblingandthelaw.com – Bitcoin Limits – Limitations On BTC Purchases at Digital Exchanges
- wealthawesome.com – How to Buy Bitcoin in Canada 2022: 6 Steps and 7 Exchanges
- investopedia.com – 10 cities leading bitcoin adoption
- blockgeeks.com/guides – 5 Easy Ways To Buy Bitcoin in Canada 2022
- coiniq.com – The Best Banks in Canada for Buying Bitcoin and Cryptocurrency
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