Shopping for bitcoin via 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 might be purchased and offered on a inventory alternate all through the buying and selling day—similar to a inventory. Additionally they carry decrease charges than mutual funds.
ETFs are a straightforward solution to get bitcoin into your portfolio, as a result of if you have already got a brokerage account, there are not any extra steps you could 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, 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 nicely forward of the U.S., the place cryptocurrency ETFs have been simply permitted in 2024. As with all ETFs, you should purchase and promote them via 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.
Be aware that capital positive factors on cryptocurrency are taxable in Canada, except 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: Find out how to purchase bitcoin in Canada
Holding bitcoin straight
Whereas ETFs are handy, they don’t mean you can maintain bitcoin straight. This is perhaps high quality for a extra passive or much less skilled investor, however should you do need to maintain bitcoin straight, the simplest solution to get began is to open a “digital pockets” through a web based crypto alternate, 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 seeking to put money into a number of? Which cost 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 nicely, you could be completely positive that the alternate you select is reliable, and can be capable to supply assist must you want it. A great place to start out is MoneySense’s checklist of top crypto platforms in Canada. All the corporations have been permitted to do enterprise in Canada by securities regulators.
Backside line
Whereas some folks might be completely happy to carry crypto inside a pre-selected basket of securities, for individuals who want to maintain bitcoin and different crypto cash straight, it’s vital to attach with a platform that stays abreast of regulatory necessities and gives 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 possibly can afford to lose. Crypto is a risky speculative asset, and crypto regulation in Canada remains to be evolving. Method with warning.
