January 27

How to Buy Bitcoin in Canada

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By now you’ve probably heard a lot of good things about Bitcoin, so it’s no surprise that you might want to buy some. We’ve put together some handy information on buying cryptocurrency in general that you may find useful. 

Typically, crypto is purchased through exchanges. Exchanges are platforms that you’ll need to sign up for before you can log in, deposit credits and money into your account, and use it to purchase the cryptocurrency of your choice on the platform. 

Since Bitbuy came onto the scene, purchasing Bitcoin in Canada has been easier than ever. All you need to do is sign up, verify your account, and purchase BTC using CAD. Here’s what you need to know to get started.

How to Get Started:

1. Set Up Your Account:

Bitbuy is our preferred platform for trading the main cryptocurrencies in Canada, including BTC, XRP, BCH, ETH, LTC, XLM and EOS. We consider it to be the most trustworthy exchange available and it is easy to use for beginners who want to purchase, sell, and trade cryptocurrencies. There is also a Pro trading platform available, which is ideal for more advanced traders. 

2.Verify Your Account:

Once you have signed up and set up two-factor authentication, you will need to log back into your account and begin the verification process. You are required by law to verify your identity when signing up for a cryptocurrency exchange in Canada. There’s an automated verification system on Bitbuy that will double-check your information against a database. You’ll be required to submit additional identification documents manually if you cannot be found on the database. 

3. Adding Funds:

Once your account has been verified, you will be able to return to your dashboard and click ‘Add Canadian Dollars’ to fund your account. Funding methods are Interac eTransfers (for amounts of < 50K$) + Wire transfers (for large amounts). Choose your preferred funding method. 

4.Purchase Cryptocurrency:

Once you have added CAD funds to your account, you’re ready to buy some cryptocurrency. On Bitbuy, you can purchase a range of digital currencies including Bitcoin, Bitcoin Cash, Litecoin, Ethereum, and Ripple (XRP).

You can purchase cryptocurrencies from the main home screen by selecting ‘buy’ on the coin that you’d like to purchase. For beginners, the Express Trade feature allows users to buy any crypto in just a few seconds. For more advanced traders, the Pro Trade feature allows for more trading options.

5. Sell Bitcoin:

Once you have bought Bitcoin, you can also easily sell it in exchange for CAD or other cryptocurrencies using the Bitbuy platform. You can also sell Bitcoin that you purchased on another exchange here for CAD. 

BitBuy is a very safe exchange, undergoing regular proof-of-reserves audits to ensure users' funds. They are also the only Canadian exchange to offer 1:1 BTC insurance thanks to their partnership with Knox.

Where to Buy Bitcoin:

After reviewing all of the crypto exchanges available in Canada, we highly recommend Bitbuy. Due to its customized platform, good reputation, and ease of use, it definitely ranks as the best option. 

Even for those who aren’t very technical, Bitcoin is becoming a hot topic around the world. It has a lot of potential for changing the world with open-source technology and most people have now heard about Bitcoin in a general sense. However, there’s still quite a lot of confusion about what it is exactly, so we’ve put together a quick and simple guide to help. The white paper published by Satoshi Nakamoto is also a useful resource. 

How to Pay for Bitcoin:

Today, Bitcoin traders have an obvious advantage over those who started buying and selling Bitcoin just a few years ago. Today, there are various payment options available that you can use to purchase Bitcoin including credit and debit cards, cash, bank transfers, PayPal, other cryptocurrencies, and even anonymous transactions. 

In the past, Bitcoin was reserved for a close community of tech-savvy cryptocurrency enthusiasts, with the only option available being to mine the coins themselves. But as Bitcoin became increasingly more popular, the first Bitcoin exchanges were founded, making it possible for traders to purchase BTC using bank transfers.

Using Your Bank Account to Buy Bitcoin:

Bank transfer is a simple and inexpensive way to purchase Bitcoins on the majority of cryptocurrency platforms. It is a very straightforward procedure that involves linking your Canadian bank account to the account you have registered for on the crypto exchange. Be prepared to enter your personal information since this is required for crypto exchanges by law. 

Those who choose to use Bitbuy, a native Canadian platform, can make regular bank transfers as long as a minimum of $20,000 is deposited. There is a small fee of 0.50% applicable and it will take 1-2 working days to complete the transfer. 

On the other hand, those who want to make smaller deposits to Bitbuy such as $500 can make bank transfers using Interac e-Transfer, a highly popular Canadian payment system that makes money transfers faster. Your transfer will be completed in up to four hours. However, the fee is slightly higher at 1.50%. If you want to use this option, make sure that your bank supports e-Transfer first. You can check out the participating banks and financial institutions at the Interac website

Even $500 can seem like a lot for somebody who is purchasing Bitcoin for the first time, but the good news is that there are other options besides Bitbuy where you can make smaller deposits with no minimum required. NDAX and Coinberry are two recommended native Canadian crypto exchange options that offer no minimum deposit limit, except for when using Interac e-transfers, in which case there is a minimum deposit of $100 required. No deposit fees are charged by either platform.

Using a Credit or Debit Card to Purchase Bitcoin:

Credit and debit cards are probably the most popular payment option available when it comes to buying Bitcoin. These contactless payments are a top choice thanks to their speed and convenience. Coinberry is currently the best crypto exchange for Canadians looking to purchase Bitcoin using a credit or debit card, with zero deposit fees on all types of deposits. As their website says, they don’t want to take a bit out of your hard-earned money. The only downside to this is that you have to use either a MasterCard or Visa card, and there is a maximum purchase limit of $500 per transaction. 

The Israeli-based broker Coinmama is another good option for Canadians looking to purchase Bitcoin with a credit or debit card. However, it’s worth noting that the fees on this exchange are slightly higher compared to the industry average, with debit and credit card payments charged at 5% per trade. However, one big perk of this platform is that you have the option of purchasing up to $5,000 worth of BTC daily or up to $20,000 monthly at a fixed rate.

Using Cash to Buy Bitcoin:

Some traders prefer the convenience of using credit and debit cards or bank transfers to buy Bitcoin, while others prefer to make cash payments since this allows them to stay under the radar. Using your debit card, credit card, or bank account to purchase Bitcoin online means that you will notify your bank and wait for both the bank and the exchange to approve the transaction. You’ll also need to provide personal details, verify your identity, and pay additional fees for using the service. 

Canadian traders who want a platform that accepts cash payments may consider a decentralized peer to peer exchange such as Paxful or LocalBitcoins. These platforms list tons of Bitcoin offers from sellers located globally and there is the option to specify that you are only interested in cash payments. You can find sellers who are willing to meet with you in person to accept cash payments and provide you with a receipt. Once you’ve done this, you can show the receipt to the exchange and get your crypto. There is also the option of making a cash deposit into the seller’s bank account if they are unable to meet you in person to accept the cash. 

You can also use one of the eight hundred Bitcoin ATMs available in various Canadian locations to purchase Bitcoin with cash. To find the closest Bitcoin ATM to you and check whether they accept cash payments, visit Coin ATM Radar and use the interactive map.

Using PayPal to Purchase Bitcoin:

PayPal is an online payment service that has gained popularity around the world as a cheaper and more secure alternative to credit and debit cards. Using a card issued by companies such as MasterCard or Visa often means that you pay high card fees. 

Unfortunately, using PayPal when buying crypto assets is not as easy as it once was due to the risk of chargeback fraud. This has resulted in low support for PayPal on crypto exchanges and currently, you are only likely to find PayPal payments accepted on peer-to-peer exchanges, where you can find sellers who specifically accept PayPal payments. Quebex is a Canada-based P2P exchange that makes it easy for you to find local Bitcoin sellers who accept PayPal payments. 

Using Other Cryptocurrencies to Buy Bitcoin:

Bitcoin has laid a solid foundation for over a thousand different cryptocurrencies that are available to purchase today. Many have been created to address the shortcomings of Bitcoin or to fulfil different tasks. Some traders will invest in different cryptocurrencies in order to diversify their portfolio, while others like purchasing these altcoins while the price is low in order to hold onto them to cash them out in the future when the value rises. 

If you own other cryptocurrencies, you might decide to trade them against Bitcoin. To do this, you will need to find an exchange that offers crypto-to-crypto trades. We recommend Bittrex or Binance as the best exchanges to do this since they are high-volume exchanges with a good level of liquidity. Both of these exchanges also support a wide variety of cryptocurrencies. Binance, for example, supports more than 150 tokens with over four hundred different trading pairs, and Bittrex supports around one hundred crypto assets and more than three hundred trading pairs. All you need to do is deposit your cryptocurrency, find your trading pair, and specify the amount of Bitcoin that you would like to purchase with it. 

Buying Bitcoin Anonymously:

Cybersecurity threats and hacking attempts are quite common in the cryptocurrency industry, which is why it’s so important to always be careful when choosing a trading platform. To reduce your risk, look for a platform that is compliant with AML and CTF policies set by local financial regulating bodies. 

In Canada, regulatory frameworks and guidelines advise cryptocurrency exchanges to perform ‘Know your Customer’ checks on all users, particularly when making deposits and withdrawals in a fiat currency such as CAD. As a result, you will not be able to purchase Bitcoin anonymously on centralized exchanges, unless you are trading it against another crypto. You will not be able to withdraw large amounts of Bitcoin unless you have first verified your identity. 

If you do not want to disclose your identity on online platforms by providing a copy of your ID, there are some options for purchasing Bitcoin anonymously that you may want to consider. These include:

  • Using a Bitcoin ATM that supports cash transactions and does not take your photo for verification
  • Using decentralized peer-to-peer exchanges such as Quebex, LocalBitcoins, or Paxful

Bear in mind that these options are less than ideal since Bitcoin ATMs typically charge high fees and peer-to-peer exchanges tend to have low limits.

Purchasing Bitcoin Over the Counter (OTC):

Crypto exchanges are continuously adding new features to satisfy their users’ trading needs. However, they tend to be focused on moderate investors or retail traders compared to institutional investors who tend to purchase large amounts of Bitcoin in one transaction. 

If you want to purchase a significant amount of Bitcoin, such as over $100,000 worth, it’s recommended that you use a Bitcoin OTC desk rather than a crypto exchange. Since these platforms are non-custodial and decentralized, they offer advantages such as more privacy and high liquidity. 

Slippage, which often happens when you place a large order on a regular crypto exchange leading to an average price much higher than the one you’ve agreed on, can also be avoided by purchasing Bitcoin at a fixed rate using an OTC desk. There are various OTC desks to choose from including Genesis, Circle, and ItBit. Established centralized exchanges such as Bitbuy and Kraken also offer smaller OTC desks.

How to Store Your Bitcoin:

Avoid making the common mistake of purchasing Bitcoin before you have somewhere suitable to store your crypto. Since Bitcoin wallets are virtual and intangible, they do not actually store your coins but rather store your private key. This is an encrypted address that provides you with access to your Bitcoin balance. 

Software and mobile wallets are the most common option. These will be downloaded and installed on your device. They are a popular choice since they are convenient and user-friendly. When using this option, you are responsible for using the appropriate software to protect your computer against malware and prevent theft of your private key. 

Another popular wallet option is the online or cloud-based wallet that you can use on a computer or smartphone. You can get these through custodial crypto exchanges or third-party platforms. However, these are only recommended as an option for storing your coins temporarily since you are reliant on the platform’s security measures to keep your private key secure. 

Those looking for a more long-term storage solution may find the hardware Bitcoin wallet option suitable. These are often referred to as cold storage wallets and come as a device that resembles a USB stick to store your private key offline. They are the ideal option for minimizing the risk of malware and hacking attacks, and you can set a recovery phrase to keep the wallet safe if lost when you activate the device. Although hardware wallets aren’t free, they are definitely worth investing in to protect your Bitcoin. Some hardware wallets we recommend include Trezor, Ledger Wallet Blue and Ledger Wallet Nano S.

Other Places to Buy Cryptocurrency:

There are various popular exchanges all over the world, although it’s always recommended that Canadian users use native exchanges. However, they are still worth mentioning since they are a convenient option for anybody looking to purchase crypto with US dollars. Gemini and Coinbase are two popular global exchanges to consider.

Frequently Asked Questions

Where Can I Buy Bitcoin in Canada?

Cryptocurrency exchanges are the best places to purchase Bitcoin in Canada. They offer the easiest, quickest way with plenty of options to choose from. You can use fiat-to-crypto exchanges to purchase Bitcoin with CAD or use a crypto-to-crypto exchange if you are interested in trading one cryptocurrency against another. Decentralized exchanges are the best way to trade Bitcoin anonymously.

Is Bitcoin Legal in Canada?

Since Bitcoin cannot compete against the Canadian Dollar, it is not considered to be legal tender in Canada. However, it is legal to purchase and trade it against other currencies online. The governmental financial institutions do not regulate these transactions and you can legally mine Bitcoin yourself either as a hobby or to make a profit. Currently, Canada does not have an established regulatory framework for the cryptocurrency market, but efforts are being made to not only regulate the industry more in the future but also invest in more Bitcoin-based projects. 

What is the Best Way to Buy Bitcoin in Canada?

You can use one of the many online marketplaces where you can buy, sell, and transfer Bitcoin. The local platform Bitbuy is the most popular crypto exchange in Canada, allowing you to easily purchase Bitcoin using Interac e-transfer with reasonable fees. Bitbuy offers a range of basic to advanced trading options available, a good reputation for security, and a responsive, friendly customer service team ready to help answer your questions. 

How Can I Buy Bitcoin Online in Canada?

You can purchase Bitcoin online in Canada using one of the many cryptocurrency exchanges. You can choose from a range of options including fiat-to-crypto or crypto-to-crypto exchanges, centralized and decentralized exchanges, custodial and non-custodial exchanges, and peer to peer exchanges. You can also purchase Bitcoin online using advanced trading platforms or OTC desks. First, consider what your needs are as a trader before finding an exchange that meets your requirements. 

Is Bitcoin ATM Available in Canada?

Canada has over eight hundred Bitcoin ATMs available, according to Coin ATM Radar. Toronto has the highest number of Bitcoin ATMs, followed by Montreal, Vancouver, Ottawa, and Calgary. They are typically found at airports, grocery stores, and supermarkets, retail stores, and restaurants. Most only support card payments but there are some that accept payments in cash. 

How Do I Cash Out Bitcoin in Canada?

If you want to cash your Bitcoins out to earn money, you can use either a fiat-to-crypto or a peer-to-peer exchange to do this. Peer-to-peer exchanges give you more customizable options for selling your crypto and allow you to accept a preferred payment method. 

Is Bitcoin Taxable in Canada?

Bitcoin is not considered a legal tender currency in Canada but is rather treated as a commodity. it is taxed according to guidelines issued by the Canada Revenue Agency. This means that depending o whether your crypto activity is business-related or not, Bitcoin is subject to either income tax or capital gains tax. Business income is 100% taxable, while capital gains are only 50% taxable. A financial advisor or tax expert can help you determine which one you are liable for.

Do Banks in Canada Accept Bitcoin?

Certain major Canadian banks are in the process of adopting new cryptocurrency policies that allow their customers to use credit or debit cards to purchase Bitcoin. The Royal Bank of Canada allows customers to use their cards for BTC transactions, and the National Bank of Canada and the Bank of Nova Scotia are expected to do the same.

How Can I Spend Bitcoin in Canada?

There are several Canadian businesses that accept Bitcoin payments, including Burrito Shop in Montreal, Steamrollers in Vancouver, or Grossman’s Tavern in Toronto. There are also various retail stores, travel agencies, and other businesses across the country that allow customers to purchase their products and services using BTC.

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