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Guide

8 Things You Need To Know Before Buying Bitcoin In Canada

Photo of Author Charlie Aikenhead
December 19, 2018
Charlie Aikenhead
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  1. IT’S BETTER TO GO CANADIAN

It’s always a good thing to buy local and support Canadian businesses. It’s especially great when buying local saves you money. When buying Bitcoin,  there are distinct advantages for Canadian citizens when buying from a Canadian exchange or broker. Some of the advantages include lower rates, more deposit and withdrawal methods, and transacting in your local currency and avoiding currency exchange fees. Reputable Canadian exchanges are also keeping a close eye on local laws and regulations, so you can feel good that you are working with a company that will move with and not against any upcoming compliance requirements. Looking for a reputable exchange? Look no further than, Bitbuy.ca – a trusted platform to buy Bitcoin in Canada.

Tod and Gordo shop Canadian, do you?

2. YOU’LL NEED TO SHOW ID


Speaking of regulations, reputable exchanges will perform a background check on you or ask you for forms of ID before letting you buy and sell Bitcoin. This is to protect you, the consumer, and the exchange from illegal activity. Some exchanges such as Bitbuy will require you to upload actual photos of your ID, while others, like the upcoming Bitbuy Pro platform will have automated tools to check your identification and information. FINTRAC requires all licensed Money Services Businesses to perform a KYC or Know Your Customer, on transactions over $1,000 in a 24-hour period.

McLovin wouldn’t be able to buy Bitcoin with a fake ID. Get that garbage outta here.

3. CHOOSE YOUR PAYMENT METHOD WISELY


You’ll need to fund your account or process a payment of some kind in order to obtain Bitcoin in Canada, and the way you pay can make all the difference.  Paying with credit card may seem like the obvious choice for making an online purchase. However, for multiple reasons, credit card payment processors really don’t like cryptocurrency, and if you choose credit card you are going to pay very high fees. Typically exchanges or platforms charge 10% minimum in order to process and complete a Bitcoin purchase with a Credit Card. Interac e-Transfer is a great way to fund your account for small amounts. It’s quick, secure, easy and charges low fees. If you are looking to buy a larger amount, try a bank wire. It requires you having to visit your bank branch, but the process is easy and a bank teller can assist you.

Bart might not want to pay credit card for his Bitcoin, unless he likes high fees.

4. EXCHANGE BANKING RELATIONSHIPS ARE KEY


Not only is it key to work with a Canadian exchange, but you should also check that that exchange has a good banking relationship by searching online. If a Canadian exchange is asking you to send a wire transfer to an international bank, that should be a red flag. It means they likely don’t bank in Canada, and probably have trouble working with Canadian banks for various reasons. Also, some Canadian exchanges may not have the best relationship with their bank. There have been horror stories of late, with banks holding millions of dollars hostage from exchanges around the world. Do some research online and make sure the exchange you use has no issue accepting your money and sending you money in a timely fashion.

Sparky should have gone with someone who banks in Canada

 

5. REVIEWS AND ONLINE REP CAN HELP YOU OUT

 

Speaking of research, make sure you search for customer reviews of any exchange or platform you are looking to use. Due to the booming popularity of crypto, there are new exchanges popping up every day The last thing you want to do is lose your hard earned money to a group of nefarious characters who don’t run a real exchange. Google Reviews, Facebook Reviews, TrustPilot scores and Reddit are just some of the platforms that are good to check out before you decide to go with an exchange. Some exchanges are good at certain things but not others so if you’re learning how to buy bitcoin in Canada make sure to research who to use. If others have had a good experience, then it’s more likely you will too.

If others do the happy dance with their experience, you will too

6. BITCOIN AND DIGITAL CURRENCIES ARE VOLATILE

 

Only buy what you are willing to lose is an age old rule that’s been around long before Bitcoin. It’s a good rule for digital currency as well, as the new asset class is one of the most volatile out there. Timing the market is incredibly difficult, and you will probably see your assets swing in value day in and day out. Life is a roller coaster, and so is investing. Be prepared for the volatility of digital currencies, and keep an eye on the prices of your cryptocurrencies.
Bitcoin prices go up and downnn like a roller coaster

7. GET YOUR OWN WALLET



Security is key for your digital currency. What are you going to do with it when you have it? Just let it sit in your exchange account and watch it forever? Exchanges such as Bitbuy take safety extremely seriously, and have all the checks and balances and security protocol in place to protect your coins. However, it’s still considered best practice to send your Bitcoin to a wallet, either a hardware wallet such as KeepKey or a hot wallet such as Jaxx.  If you are buying Bitcoin to make a payment, this is especially important. You want to have control over when your currency is sent and how much is sent. Get a wallet, and hold your Bitcoin there to ensure safety and accuracy of transactions. George can’t fit Bitcoin in his wallet, he’ll need to grab a KeepKey or download Jaxx.

8. SELLING BITCOIN IS A TAXABLE EVENT

 

Contrary to popular belief, paying your taxes is actually cool. It will keep you out of jail and pay for essential government services that we love in our great home nation of Canada. We have an entire blog post dedicated to things you need to know when cryptocurrency related taxes in Canada. The big thing to know when getting started is that Bitcoin is not immune from taxes, and capital gains or losses can be incurred when you sell digital currency for FIAT and cash out. If you plan to buy Bitcoin and HODL (hold for a long period of time) then taxes aren’t something you need to worry about yet. Just be aware that selling Bitcoin is a taxable event and any profits will be considered income. The more you know!

Pay your taxes, be cool

 

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.


Photo of Author Charlie Aikenhead
Charlie Aikenhead
Charlie is a marketing and communications professional with experience in blockchain, and adtech startups. He currently serves as Director of Marketing at Bitbuy.
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