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 simply purchase in a single buy, much like a mutual fund. In contrast to a mutual fund, nevertheless, 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 technique to get bitcoin into your portfolio, as a result of if you have already got a brokerage account, there are not any extra 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, 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 effectively forward of the U.S., the place cryptocurrency ETFs have been simply accepted in 2024. As with all ETFs, you should buy and promote them by a standard or online brokerage. One profit of shopping for crypto through ETFs is that you simply don’t have to handle a crypto pockets and the “personal keys” to entry it.
Observe that capital positive aspects 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: The way to purchase bitcoin in Canada
Holding bitcoin straight
Whereas ETFs are handy, they don’t let you maintain bitcoin straight. This is likely to be high quality for a extra passive or much less skilled investor, however when you do need to maintain bitcoin straight, the best technique to get began is to open a “digital pockets” through a web-based crypto alternate, additionally known 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 seeking 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 alternate you select is reliable, and can be capable to supply help do you have to want it. A great place to begin is MoneySense’s record of top crypto platforms in Canada. The entire firms have been accepted to do enterprise in Canada by securities regulators.
Backside line
Whereas some individuals shall be glad to carry crypto inside a pre-selected basket of securities, for many who want to maintain bitcoin and different crypto cash straight, it’s necessary to attach with a platform that stays abreast of regulatory necessities and provides peace of thoughts that the money you utilize to fund your account, in addition to your bitcoin, is secure.
And, after all, don’t make investments greater than you may afford to lose. Crypto is a risky speculative asset, and crypto regulation in Canada continues to be evolving. Strategy with warning.
