How to buy/sell Bitcoin (and other cryptocurrencies) in Canada
This post is slightly outdated and one of the major exchanged I listed in Canada (QuadrigaCX) filed for bankurptcy. You can read more about it here.
I have been following the block-chain and the cryptocurrency market from afar for over two years now and a couple of months back, I decided to jump in and make some investments in cryptocurrency. Buying and selling cryptocurrency isn’t that straightforward especially for Canadians, and many of my friends have been asked me about it. To help everyone out, I’ve decided to write a short blog post, highlighting platforms you’d need to buy and trade cryptocurrency in Canada.
Disclaimer: Please note, this is not investment advice, and you should do your own research before decided to invest in the cryptocurrency market. I’m also not a cryptocurrency expert and there are other options that exist to buy and trade cryptocurrency. These are just my favourite.
Some of the embedded links to the various exchanges has my referral link. Most exchanges will provide you with some incentive of making an account through the referral link. Example Coinbase will give you $10 in BTC if you use my referral link to make an account. Ofcourse, you don’t have to use it :).
TLDR:
- QuadrigaCX as the primary exchange to buy/sell cryptocurrency and cash-out in Canada.
- Coinbase for smaller transactions (under $250).
- Binance for alt-coin trading. Transfer cryptocurrency of choice to Binance to trade for alt-coins (I’ve used ETH to buy alt-coins). You can transfer USD to it too, but I never used that feature.
- Tradingview to monitor price action and set up alerts.
- CoinMarket cap to review market cap of cryptocurrencies.
So what is Cryptocurrency?
As Investopedia defines it:
A cryptocurrency is a digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of this security feature. A defining characteristic of a cryptocurrency, and arguably its most endearing allure is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation.
You can read more here.
In simpler words, Cryptocurrency is a secure digital asset or ‘virtual currency’ which can be used to make purchases in the digital world. The term Crypto refers to cryptography methods that are used to encrypt the transaction and secure it add it to the ‘blockchain’ — a digitized, decentralized, public ledger of all cryptocurrency transactions.
What is this Bitcoin and do I get a real coin made of Gold?
No, you don’t*!
Bitcoin (Trading symbol: BTC or XBT) not to be confused with Bitcoin Cash (BCH), is a decentralized digital currency and it works without a central bank or an administrator. That is there is no need for an intermediary to make peer-to-peer transactions. Bitcoin is the most popular cryptocurrency with the largest market cap in the world (at the time of writing $276.5B).
BTC is meant to be a ‘holder of value’ and not an actual currency for day-to-day transaction. The best analogy that I use to explain this is Gold. You wouldn’t walk into a grocery store with a gold brick to buy milk, but you’d like to hold Gold as an asset to increase your wealth. There are other cryptocurrencies that were created to enable transactions.
The one thing I realized (which wasn’t very obvious before) was that I could buy a fraction of Bitcoin. So I don’t need to have $20,000 to buy 1 bitcoin. I can spend $10 and buy a small fraction of it.
Which leads us to Alt-coins?
Just like Bitcoin, multiple digital currencies exist in the market. Few examples include Ethereum (ETH), Litecoin (LTH), Ripple (XRP), etc. These digital ‘coins’ were launched after the success of Bitcoin and usually market themselves as a better substitute for bitcoin. Some of the alt-coins are meant to be used as transactional tools, e.g. Bitcoin Cash (BCH).
So how do I buy cryptocurrency in Canada?
Do you own reasearch: Firstly, do lot of research on what currency you want to buy. There are a lot of great things happening in the crypto market, but also some terrible things like major market manipulation, fake initial coin offerings (they are like IPO, but in the cryptocurrency world), hackers stealing currencies, etc. So make sure you fully understand the risk of getting into this market.
Pick an exchange: For the sake of simplicity, I’ll focus only on Bitcoin (BTC). Later in this post, I’ll provide some suggestions on how to buy and trade alt-coins. To buy BTC, you’ll need to open an account on a cryptocurrency exchange. There are a lot of exchanges you can use. I started my journey by opening an account on an exchange called Coinbase. You have to provide a government issued ID to verify your account (similar process for all exchanges). For Canadians, documents like driving license or a passport photocopy are accepted. IMO Coinbase has the best user interface, and I love how it allows you to purchase BTC instantly (using your credit card). Coinbase also became the #1 app on app store earlier this week and has been reliable with minimum outages so far. What I did not like about CoinBase was that it only allows you to buy a maximum of $250 worth of BTC over a 24 hour period for a very long time. The max. limit changes based on the number of transactions you make, but it could take weeks/months to get to a higher level. Also, in the Canadian version, you are not allowed to sell — hence can’t cash out. You will need to move your coins into a different exchange that allows you to cash out.
Due to these limitations, I moved on from Coinbase and have now started using QuadrigaCX for all of my Canadian transactions. So far I’ve been pleased with the platform. I found their entire process pretty easy and they also provide you with multiple options on how to send money from your bank account directly into your Quadriga account to buy BTC. You can also withdraw your funds instantly from Quadriga or transfer into another exchange (or your BTC wallet) to trade other coins. You need your account to be verified before making a transaction. Due to overwhelming demand, their user verification lately has been taking a long time (it took nearly three weeks for one of my friends).Once verified, you can deposit up to $2,000CAD instantly using INTERAC online (or up to $4,000CAD over 24 hours). This process works similar to how you’d use Interac payments on any eCommerce site. You hit the link, and you get directed to a secure payment page which then links directly to your preferred bank account. I have successfully transferred money to my Quadriga account using BMO. You can transfer as much as $500,000 to Quadriga using Wire Transfer (I’ve never used this feature). You can also purchase Ethereum, LiteCoin, Bitcoin Cash and Bitcoin Gold on Quadriga and easily receive and transfer your coins to other exchanges.
I found Quadriga to be a good platform for withdrawing my funds back into my bank account too (Note: I couldn’t withdraw CAD on the Canadian version of Coinbase and it was another reason for me to look for another exchange). There are couple of different options with different fee structures that can be used to withdraw funds. If you are ok waiting for 7 business days to get the money into your bank account, you can use EFT. I have used this feature and the funds are transferred into my account exactly on the 7th business day.
Quadriga charges a 0.5% fee on all completed trades on the following order books BTC/CAD, BTC/USD, ETH/CAD, LTC/CAD & BCH/CAD. The fee on the ETH/BTC order book is 0.2%. I found this to be standard across different exchanges.
On the negative side, I don’t like that Quadriga does not have a stop-loss feature. Given how volatile crypto markets are and unlike traditional markets ‘never close,’ you can literally be in for a rude awakening any day. I’d also love to see a mobile app launched in the future to help me make changes to my position when I don’t have my laptop in front of me. It also has very basic price-action charts and because a lot of major platforms don’t track Quadriga, it can be hard to do any real technical analysis on it. I typically follow other exchanges that track CAD or USD price-action and then make some assumption on how the prices will move on Quadriga.
Trading alt-coins: If you want to trade other alt-coins (there are hundreds of them), you’ll need to use a different exchange. I use Binance as my preferred exchange. Binance has it’s own alt-coin BNN as if you use BNN to make trades, they give you 50% off their regular trading fee. The regular trading fee rate is 0.1%. Account creation process is similar to other exchanges and you can move a crypto currency into your digital wallet and use it to make trades. I moved some of my Ether which I originally purhcased on Coinbase to Binance and used it to purchase some alt-coins.
Tracking the market and price-action: Coinmarketcap is a good platform to keep track of crypto currency pricing and market cap. You cannot really use it to do any technical analysis. For technical analysis and tracking markets, I like using Trading View. The free plans allows you to have three indicators and you can toggle between your favourite ones easily (I use MACD, RSI and Momentum frequently). You can track most popular alt-coins on trading view too.
Other tools/apps: Google Authenticator: For most of the exchanges you can enable multiple ways of accessing the platform. In most cases I’ve enabled two-factor authentication and use Google Authenticator for it. It works very similar to how an RSA key would work, where it auto generates a 6 digit code for a few seconds. In this case, the Google authenticator app on your smartphone relaces the physical RSA key.
So, this is the setup I use to trade cryptocurrency in Canada. I found this the easiest and the safest setup and it works well for me. I’ve never had any challenges so far in either depositing/transferring funds or cashing-out. I hope you find this helpful.
I’d love to know what you use and if you like this article please share across your network. You can also follow me on twitter below.
Good luck!
*Edit: A friend pointed out that you can buy a bitcoin made of gold!
(This is a joke, please don’t buy these and think you own a bitcoin :)). I do think they make a killer holiday gift).
