How to Invest in Crypto in 2025?

From big names like Bitcoin and Ethereum to lesser-known metaverse tokens like Sandbox and ApeCoin, Canadian investors continue to snap up cryptocurrency at an increasing rate.

Not yet a blockchain fanatic but curious if buying crypto in 2025 is the best way to diversify your portfolio? Or an experienced retail investor ready to explore the new frontier in financial markets?

In this guide, we’ll discuss where and how to buy cryptocurrency in Canada and the best cryptos to buy in 2025.

How to invest in cryptocurrency in Canada?

If you are wondering how to invest in cryptocurrency in Canada, you’re not alone. With competing regulatory requirements across provinces, understanding how - and if - you can buy or sell cryptocurrency can feel daunting.

First: it’s completely legal to invest in cryptocurrency in Canada. Unlike other countries, where governments have either outlawed or severely restricted the use of cryptocurrencies, Canada recognizes and accepts crypto as a legitimate investment asset.

Things get a bit tricky, however, when it comes to where you buy, sell and store your coins or tokens. Like stocks, exchange-traded funds and other securities, cryptos are bought and sold on centralized exchanges that connect buyers and sellers. Unlike stocks or ETFs, however, crypto exchanges aren’t as heavily supervised and may or may not fully comply with rules and policies that apply to more traditional financial institutions.

Should you invest in cryptocurrency?

Deciding to invest in cryptocurrency, like any other aspect of financial planning, depends on personal factors, including your risk tolerance, long-term financial goals and experience investing in financial markets.

The high degree of volatility in crypto markets has the potential for significant gains, of course, but equally significant losses.

Where to invest in cryptocurrency?

For the typical investor, a centralized exchange is the best way to invest in cryptocurrency. Centralized crypto exchanges follow the same general model as more traditional exchanges by offering investors a secure, transparent environment in which to buy, sell and trade coins. In return for executing trades, the exchange charges a small fee equal to a percentage of the value of the transaction, as well as fees associated with basic account operations.

Binance, Kraken, BitBuy and VirgoCX are among the largest, best-known crypto exchanges operating in Canada, but far from the only options. WealthSimple, for example, only recently launched its cryptocurrency platform, but clients benefit from the knowledge that the exchange is fully regulated by the Canadian Securities Administrators (CSA).

Learn more and compare the most trustworthy crypto exchanges in Canada below:

Compare the best crypto exchanges

Pick your best crypto platform

Choosing the best crypto exchange seldom hinges on one factor, however, and you’ll want to think about things like transaction fees, the number of available coins to trade and overall stability before opening an account. After doing your research, you’ll follow these steps to begin trading on your platform of choice:

1. Complete the verification process. All centralized exchanges and some decentralized exchanges will ask you to provide identity documentation and connect to a funding method.
2. Fund your account. Depending on where you decide to trade, you may be able to add money to your account by bank transfer, Interac e-Transfer, debit card or credit card.
3. Purchase coins. Locate your platform’s virtual trading floor, enter your favourite crypto’s ticker symbol and purchase amount and hit ‘buy’.
4. Store your crypto in a safe location. Unless you intend to sell or trade your crypto immediately, leaving it in your exchange account may not be the best bet, as these institutions aren’t backed by the CDIC. For maximum security, download your crypto to an offline device or crypto wallet.

While decentralized exchanges are also an option, they are not subject to the same regulations as centralized exchanges and carry additional risk. Centralized exchanges collect basic customer information as part of the Know Your Customer (KYC) process, for example, which means you can be sure your money isn’t supporting criminal activity. Decentralized exchanges, on the other hand, provide enhanced anonymity, but less security. Investors on centralized exchanges may have better luck recouping losses in the case of a security breach, whereas those who trade in a decentralized environment will have more limited options for legal recourse.

What is the best cryptocurrency to invest in for 2025?

The best crypto to buy in 2025 is one that aligns with your overall investment strategy, complements your existing portfolio and supports a project that you believe will improve some aspect of daily life.

Choosing the right crypto to buy follows much the same process as any other type of investment decision. In practical terms, that means the answer to the question will evolve as your portfolio expands and your investment goals shift. The best crypto to buy now to generate profits won’t be the same as the best crypto to buy if you intend to hold the coin for a longer period.

One way to ensure that you buy the best crypto for 2025? Learn as much as you can about blockchain technology. Understanding the various ecosystems, their functions and the associated projects will help you make an informed decision when you decide to back an idea by purchasing a token.

Crypto market capitalization can also provide insight into which cryptos to buy in 2025. If a previously unfunded project suddenly reports a sizable injection of cash, it may be worth investigating the source of the funding to see if it reflects a vote of confidence from an institutional investor.

What’s the best cryptocurrency to invest in 2025 for the short term?

Many of the same principles that apply when choosing which crypto to purchase for the long term in 2025 also come in handy when purchasing crypto for the short term. In addition to the project fundamentals, however, you’ll also want to pay close attention to market movements.

If you intend to hold a crypto for only a short time, look for a new project with solid market capitalization and institutional backing. While a vote of confidence from a major investor doesn’t guarantee that a project will take off, it does signal confidence in the idea. Focusing on projects attached to a well-known blockchain ecosystem, such as Bitcoin, PolkaDot or Ethereum may also increase your odds of identifying a quick-to-scale project.

While experienced investors accustomed to managing their own portfolios and day traders may find the highs and lows of the volatile crypto market appealing, those new to retail investing may find the experience of watching the market swing a stressful experience.

Like all speculative investments, cryptocurrency has the potential to generate big ‘wins’ quickly. The reverse also holds true, however, and those with less exposure to crypto or day trading would do well to invest only what they can afford to lose.

What’s the best cryptocurrency to invest in 2025 for the long term?

As with more traditional assets, deciding which crypto to buy for the long term requires that you do your research. You’ll need to understand the project fundamentals and viability, evaluate the experience of the leadership team and consider the product niche, amongst other factors.

If you’re looking to buy crypto for the long-term in 2025, we suggest taking a close look at the following elements of any prospective investment:

• Educate yourself about the project and its ecosystem. Start by reading whitepapers and other technical documentation, then move on to analysis by industry experts. As with any fundamental investment, you’ll want to understand what makes the project special or innovative.
• Check out the leadership. What kind of experience do they have?
• Investigate the community. A large, engaged community can provide you with additional insights into the utility and viability of the project.

Before investing in cryptocurrency, you may want to speak to a licensed financial advisor to understand how this novel asset fits into your long-term investment strategy.

Compare the best crypto exchanges

Pick your best crypto platform

What’s the best cheap cryptocurrency to invest In?

As the number of cryptos available to purchase increases, investors have a wider range of options from which to choose when it comes to coins and tokens.

While popular stablecoins like Bitcoin and Ethereum still carry a hefty price tag, newer projects and those with less name recognition regularly release coins at lower price points. And, of course, the epic highs and lows of the crypto markets mean that patient investors can snap up high-value coins for less.

For those new to cryptocurrencies, lower-priced “penny cryptocurrencies” can serve as an excellent starter investment. New traders have the opportunity to learn about crypto, participate in the market and turn a profit without the risk of significant loss.

The best penny cryptocurrency to buy depends, of course, on your personal preferences, investment goals and budget. In general, however, it can pay - literally - to take a close look at the fundamentals of a project. A new initiative with high market capitalization might be poised to take off, while a project that seeks to solve a common problem, whether on or off the blockchain, may also have excellent growth potential.

Is investing in cryptocurrency safe?

Yes. Investing in cryptocurrency is safe and legal in Canada provided you purchase or trade coins and tokens on an approved exchange.

While Canada does not have a federal securities regulator like the Securities and Exchange Commission in the United States, provincial authorities largely follow one another when interpreting and applying the Canadian Securities Act. In order to protect investors, Canadian Securities Administrators require cryptocurrency exchanges to follow many of the same rules as platforms for trading traditional assets.

Trading via a recognized exchange also gives you the peace of mind that your assets are protected from cyber-attacks. Popular exchanges like Binance, Kraken and Coinbase invest millions of dollars in security and store customers’ assets in offline “cold” wallets to protect against hacking.

Is cryptocurrency investing taxed in Canada?

While you will pay taxes on cryptocurrency investments in Canada, how you do so will depend on whether you hold coins or simply profit from trading.

The Bank of Canada Act classifies cryptocurrency as a commodity, which means income generated from trading or selling qualifies as a capital gain. Likewise, if you convert your cryptocurrency in exchange for Canadian dollars, you’ll pay taxes on this transaction.

If, on the other hand, you use crypto to pay for goods and services in the real world, the Canadian Revenue Authority (CRA) treats this as a barter transaction.

Ready to start investing in cryptocurrency?

Compare the best crypto exchanges

Pick your best crypto platform