Shopping for bitcoin by 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. Not like a mutual fund, nonetheless, an ETF may be purchased and offered on a inventory change all through the buying and selling day—identical to a inventory. In addition they carry decrease charges than mutual funds.
ETFs are a straightforward approach to get bitcoin into your portfolio, as a result of if you have already got a brokerage account, there aren’t any further steps you could 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, 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 properly forward of the U.S., the place cryptocurrency ETFs have been simply accepted in 2024. As with all ETFs, you should purchase and promote them by a standard or on-line brokerage. One profit of shopping for crypto by way of ETFs is that you just don’t must handle a crypto pockets and the “non-public keys” to entry it.
Word that capital positive factors on cryptocurrency are taxable in Canada, until 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: Tips on how to purchase bitcoin in Canada
Holding bitcoin instantly
Whereas ETFs are handy, they don’t assist you to maintain bitcoin instantly. This could be nice for a extra passive or much less skilled investor, however in the event you do wish to maintain bitcoin instantly, the best approach to get began is to open a “digital pockets” by way of an internet crypto change, 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 fluctuate wildly when it comes to options, advantages and safety. Begin with the way you wish to make investments. Are you curious about just one kind of cryptocurrency, or are you seeking to put money into a number of? Which fee strategies do you propose to make use of for purchases (by way of 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 properly, you could be completely certain that the change you select is reliable, and can have the ability to supply assist do you have to want it. A superb place to start out is MoneySense’s checklist of prime crypto platforms in Canada. The entire firms have been accepted to do enterprise in Canada by securities regulators.
Backside line
Whereas some folks will likely be glad to carry crypto inside a pre-selected basket of securities, for many who want to maintain bitcoin and different crypto cash instantly, it’s necessary to attach with a platform that stays abreast of regulatory necessities and presents peace of thoughts that the money you utilize to fund your account, in addition to your bitcoin, is secure.
And, in fact, don’t make investments greater than you possibly can afford to lose. Crypto is a unstable speculative asset, and crypto regulation in Canada continues to be evolving. Method with warning.