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, nevertheless, an ETF could 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 simple technique to get bitcoin into your portfolio, as a result of if you have already got a brokerage account, there are not any further steps it’s good to take in an effort 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, Goal 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 buy and promote them by way of a standard or online brokerage. One profit of shopping for crypto through ETFs is that you just don’t must handle a crypto pockets and the “personal keys” to entry it.
Word that capital features on cryptocurrency are taxable in Canada, until you put money into a crypto ETF and maintain it inside a tax-free savings account (TFSA) or, with sure circumstances, a first home savings account (FHSA). Learn extra about cryptocurrency and taxes and holding crypto ETFs in registered accounts.
Watch: Learn how to purchase bitcoin in Canada
Holding bitcoin immediately
Whereas ETFs are handy, they don’t permit you to maintain bitcoin immediately. This may be nice for a extra passive or much less skilled investor, however should you do need to maintain bitcoin immediately, the best technique to get began is to open a “digital pockets” through a web based crypto trade, 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 by way of options, advantages and safety. Begin with the way you need to make investments. Are you interested by just one kind of cryptocurrency, or are you trying to put money into a number of? Which fee strategies do you plan 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, it’s good to be completely certain that the trade you select is reliable, and can be capable to provide assist do you have to want it. place to start out is MoneySense’s listing of top crypto platforms in Canada. All the corporations have been authorized to do enterprise in Canada by securities regulators.
Backside line
Whereas some individuals shall be pleased to carry crypto inside a pre-selected basket of securities, for individuals who want to maintain bitcoin and different crypto cash immediately, it’s necessary to attach with a platform that stays abreast of regulatory necessities and affords peace of thoughts that the money you employ to fund your account, in addition to your bitcoin, is secure.
And, in fact, 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.
