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 simply purchase in a single buy, just like a mutual fund. Not like a mutual fund, nonetheless, an ETF might be purchased and offered on a inventory trade all through the buying and selling day—similar 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 are not any further steps you’ll want to take so as 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 effectively forward of the U.S., the place cryptocurrency ETFs had been simply accredited in 2024. As with all ETFs, you should buy and promote them by way of a conventional or on-line brokerage. One profit of shopping for crypto through ETFs is that you simply don’t have to handle a crypto pockets and the “personal keys” to entry it.
Word that capital features on cryptocurrency are taxable in Canada, except you put money into a crypto ETF and maintain it inside a tax-free financial savings account (TFSA) or, with sure circumstances, a first residence financial savings account (FHSA). Learn extra about cryptocurrency and taxes and holding crypto ETFs in registered accounts.
Watch: Methods to purchase bitcoin in Canada
Holding bitcoin straight
Whereas ETFs are handy, they don’t will let you maintain bitcoin straight. This could be wonderful for a extra passive or much less skilled investor, however if you happen to do wish to maintain bitcoin straight, 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 wish 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 wish to make investments. Are you interested by just one sort of cryptocurrency, or are you trying to put money into 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’ll want to be completely certain that the trade you select is reliable, and can be capable to provide assist do you have to want it. A superb place to begin is MoneySense’s listing of prime crypto platforms in Canada. The entire corporations have been accredited to do enterprise in Canada by securities regulators.
Backside line
Whereas some folks will likely be blissful to carry crypto inside a pre-selected basket of securities, for individuals who want to maintain bitcoin and different crypto cash straight, it’s necessary to attach with a platform that stays abreast of regulatory necessities and affords 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’ll be able to afford to lose. Crypto is a unstable speculative asset, and crypto regulation in Canada remains to be evolving. Strategy with warning.