Canada has a high adoption rate for cryptocurrencies, especially Bitcoin. It also has an active cryptocurrency community that supports the development of blockchain technology. According to this study, around 85% of Canadians are aware of Bitcoin, and more than half of the Canadian population owns digital currencies.
Buying bitcoin in Canada is, in fact, easier than you think. In this ultimate guide, we are going to show you the easiest and most convenient ways of purchasing Bitcoin in Canada. Moreover, we will answer the most common questions that are related to cryptocurrencies and Bitcoin. Depending on your needs, there are several ways to buy bitcoin in Canada.
4 Easy Ways to Purchase Bitcoin in Canada
- Online Exchanges
- Bitcoin ATMs
- P2P Exchanges
- OTC (Over-the-counter)
1. Online Exchanges
Online exchanges are the most convenient and most popular place to purchase Bitcoin in Canada. People usually prefer online exchanges because of its simplicity and ease of use. Usually, the process of buying bitcoin takes less than 10 minutes on these platforms.
There are many well-established exchanges that provide one-stop solutions with high-security standards and reporting, but due diligence should be exercised when choosing a bitcoin exchange.
These online exchange platforms charge a fee to purchase bitcoins or other cryptocurrencies. The most popular exchange platforms in Canada are Coinberry, Shakepay, Bitbuy, Coinbase, and Coinsquare.
Coinberry offers the most affordable fees and great customer support that answers all your cryptocurrency-related questions. Coinberry is the only FINTRAC registered & PIPEDA compliant digital currency platform trusted by Canadian Government municipalities.
You can use a debit card, credit card or wire transfer to buy bitcoins on Coinberry. Check out How to Buy Bitcoins with Canadian Dollars and How to Buy Bitcoins with Debit or Credit Card posts to learn more.
2. Bitcoin ATMs
As of early 2020, there are 757 Bitcoin ATMs in Canada according to CoinAtmRadar. The majority of these ATMs are located in Toronto(391) and Vancouver(109). You can find the closest Bitcoin ATM near you by using CoinAtmRadar.
Usually, users who want to pay with cash and stay anonymous choose this method but it comes at a price. Bitcoin buying fees are usually higher on these ATMs since there is a fairly substantial cost to operate these machines across the country.
3. P2P Network (Peer-to-Peer)
This is an outdated method but people still use it these days because it allows users to stay anonymous. P2P network is an online marketplace that allows users to exchange bitcoins. Websites such as Kijiji and Craigslist are perfect examples of these networks where two users make a transaction with no middle man helping to facilitate the transaction.
Buying Bitcoin from a stranger can be risky because of the fact that you don’t know the other person. Therefore, there are some websites such as LocalBitcoins that help you to make this transaction in a more secure way. For each transaction that is conducted, Localbitcoin.com offers an escrow service to protect the buyer of the Bitcoin.
4. OTC (Over-the-counter)
It’s an uncommon method to buy Bitcoins OTC unless you intend to buy large sums($25,000) of bitcoins and stay anonymous. It also protects you from slippage which can save you money.
Slippage occurs when the amount of Bitcoin you are buying exceeds the amount available at the quoted price on the trading platform. Part of your order ‘slips’ to the next available higher sale price, and you end up paying more than your quoted market price. For more information on Slippage check out this article.
The most common questions that are related to cryptocurrencies and Bitcoin:
Can Bitcoin gains be taxed in Canada?
Yes, Bitcoin is subject to capital gains in Canada. Meaning that any gains are subject to taxation upon withdrawal. The CRA generally treats cryptocurrency as 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.
Can the government track Cryptocurrency?
Yes, the government can track cryptocurrencies. Since its inception, Bitcoin has been thought of as an anonymous way to move money. Recently, however, a few firms have built software that can track the movement of coins and help law enforcement track illicit earnings. Make sure to report your earnings from transactions involving cryptocurrency.
Do I need a bitcoin wallet for buying Bitcoin?
No, you don’t need a bitcoin wallet for buying Bitcoin. However, you need it for securely keeping your bitcoins. Because security must be your top priority when choosing a bitcoin wallet, opt for one with a multi-signature facility.
Remember that the bitcoin exchange and the bitcoin wallet are not the same things. Bitcoin exchanges are similar to foreign exchange markets. The exchanges are digital platforms where Bitcoin is exchanged for fiat currency—for example, bitcoin (BTC) for Canadian dollars (CAD). While exchanges offer wallet capabilities to users, it is not their primary business. It is advisable to transfer your bitcoins to a secure wallet.
Is Bitcoin illegal in Canada?
Bitcoin is owned by thousands of people in Canada and it is legal.
There are very few places where Bitcoin is illegal, and typically it has to do with certain types of transactions Bitcoin is used for. Owning and trading bitcoin is legal in Canada and it is subject to taxation upon withdrawal.