Shopping for bitcoin by means 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, much like a mutual fund. Not like a mutual fund, nonetheless, an ETF will be purchased and offered on a inventory alternate all through the buying and selling day—identical to a inventory. In addition they carry decrease charges than mutual funds.
ETFs are a simple strategy to get bitcoin into your portfolio, as a result of if you have already got a brokerage account, there aren’t any extra steps it is advisable take with the intention 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 had been simply accredited in 2024. As with all ETFs, you should buy and promote them by means of a standard or online brokerage. One profit of shopping for crypto through ETFs is that you just don’t have to handle a crypto pockets and the “personal keys” to entry it.
Notice 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: How one can purchase bitcoin in Canada
Holding bitcoin straight
Whereas ETFs are handy, they don’t can help you maintain bitcoin straight. This is perhaps tremendous for a extra passive or much less skilled investor, however for those who do need to maintain bitcoin straight, the best strategy 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 differ wildly by way of options, advantages and safety. Begin with the way you need to make investments. Are you curious about just one sort 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 properly, it is advisable be completely positive that the alternate you select is reliable, and can be capable of provide help must you want it. An excellent place to start out is MoneySense’s listing of top crypto platforms in Canada. All the firms have been accredited to do enterprise in Canada by securities regulators.
Backside line
Whereas some folks shall be pleased to carry crypto inside a pre-selected basket of securities, for individuals who want to maintain bitcoin and different crypto cash straight, it’s essential to attach with a platform that stays abreast of regulatory necessities and presents 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 unstable speculative asset, and crypto regulation in Canada continues to be evolving. Method with warning.
