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, just like a mutual fund. In contrast to a mutual fund, nonetheless, an ETF will be purchased and offered on a inventory alternate all through the buying and selling day—similar to a inventory. Additionally 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 further steps you should take with a purpose 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, Objective 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 effectively 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 standard or on-line brokerage. One profit of shopping for crypto through ETFs is that you just don’t have to handle a crypto pockets and the “non-public keys” to entry it.
Observe that capital positive factors on cryptocurrency are taxable in Canada, until you spend money on a crypto ETF and maintain it inside a tax-free financial savings account (TFSA) or, with sure situations, a first dwelling financial savings account (FHSA). Learn extra about cryptocurrency and taxes and holding crypto ETFs in registered accounts.
Watch: The best way to purchase bitcoin in Canada
Holding bitcoin instantly
Whereas ETFs are handy, they don’t can help you maintain bitcoin instantly. This is likely to be wonderful for a extra passive or much less skilled investor, however if you happen to do need to maintain bitcoin instantly, the best option to get began is to open a “digital pockets” through a web based crypto alternate, additionally referred to 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 range wildly when it comes to options, advantages and safety. Begin with the way you need to make investments. Are you curious about just one sort of cryptocurrency, or are you trying to spend money on a number of? Which fee 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 effectively, you should be completely positive that the alternate you select is reliable, and can have the ability to provide assist must you want it. A great place to begin is MoneySense’s checklist of high crypto platforms in Canada. All the firms have been authorized to do enterprise in Canada by securities regulators.
Backside line
Whereas some folks can be completely happy to carry crypto inside a pre-selected basket of securities, for individuals who want to maintain bitcoin and different crypto cash instantly, it’s vital 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 secure.
And, after all, don’t make investments greater than you possibly can afford to lose. Crypto is a risky speculative asset, and crypto regulation in Canada remains to be evolving. Strategy with warning.
