Cryptocurrency is more popular by the day. What was once complex and niche is now a valuable part of mainstream investor portfolios. Crypto exchanges have helped push digital currency into the mainstream.
Need proof that cryptocurrency is now mainstream? Did you know that the crypto exchange Crypto.com, recently bought the naming rights for the stadium of one of North America's most popular and successful sports teams? The team? The venerable Los Angeles Lakers. For the next 20 years, the former Staples Center will be the Crypto.com Arena. They paid $700 million USD for the rights!
If you want to get in on the crypto craze, you'll want to start by picking a crypto exchange. This page provides an overview of the best crypto exchanges, explains how they work, and will help you find the right one for you. Before talking about the exchanges themselves, it's important to understand the basics of cryptocurrency.
Where do I buy crypto in Canada?
There are many crypto trading platforms in Canada. Perhaps you are wondering about the best crypto platform in Canada. Our crypto exchange comparison tool will help simplify and speed up your decision-making process of which crypto platform to choose.
Use the tool to determine what will be the best option for you. Choosing the exchange with the lowest transaction fees might not always prove to be the best for your investment in crypto.
One might be tempted to ignore an exchange with a higher rate, but if it has more cryptocurrencies available it may be a better long-term investment option for you. You will be transacting less often but at a slightly higher rate. You just need to know what you want to do with your crypto before you choose your Canadian crypto exchange.
What is the best crypto exchange in Canada?
When you look at the advantages and disadvantages of each crypto exchange, you can weigh this against what you are trying to do. This will show you which is the best Canadian crypto trading platform for you.
An expert’s quick advice is usually to pick the exchange with the lowest transaction fees. This keeps your costs down if you decide to become a crypto trader.
If you would like to find out more about buying cryptocurrency, or if you want to try one of the exchanges see the top of this page.
Some exchanges facilitate crypto staking, allowing you to earn passive income from your crypto assets. Compare the best platforms for crypto staking right here.
What fees do I pay on a crypto exchange in Canada?
This question will help you to decide what is the best exchange for crypto in Canada.
Monthly fees are applicable to many crypto exchanges or trading platforms that you may choose in Canada. Some have cut these out and compensated with higher transaction costs or they aim to rather serve the bulk market with low transaction costs.
These are becoming less popular because there are so many exchanges trying to enter the market and compete.
Transaction fees are usually a percentage of the transaction amount that you buy or sell. For example, you buy 1 full Bitcoin at $40,000. If the exchange charges a 1% transaction fee then you will pay $400 to buy the Bitcoin. You can look at the comparison tool up top to see the different rates of Canada’s best trading platforms.
Deposit or withdrawal fees - some exchanges might charge you to put money in or take money out of the trading account.
What is the lowest-fee crypto exchange in Canada?
A very important deciding factor when it comes to trading cryptocurrency is the fees. This may sound obvious, but when you are trading cryptocurrency on an exchange, you pay fees every time you buy and every time you sell.
This is why you should consider the fees of transacting as well as your monthly fees (If there are any).
Looking for the cheapest crypto exchange in Canada is a good idea to start with. But you should consider all the different costs that you will be exposed to when choosing the best crypto trading platform.
It can be useful to take a step back here to answer some of the top cryptocurrency questions. e examine them below.
What is cryptocurrency?
Cryptocurrency is a non-tangible currency that is traded virtually. You are probably familiar with fiat money. This is the tangible currency that you are used to holding in your hands. The common ones you will know are the Canadian Dollar, Euro, US dollar and British Pound.
Although you can have fiat currency in hand and your bank account, cryptocurrency is only held digitally. Cryptocurrency is mined. This also means that it is very difficult to counterfeit cryptocurrency. It works through a computer network, known as the blockchain. Blockchain will be explained below.
Cryptocurrencies are not issued by a particular central authority. The implication is that the government cannot manipulate or control these as is possible through the central banks that issue fiat currency.
The transactions are secure because people transacting do not need an intermediary to handle the payments.
How do cryptocurrencies work?
Cryptocurrencies work through a computer network. Simply, there are separate records or ledgers that store the transactions of cryptocurrency.
So, the information is grouped together and this is called a block. You will hear the word “blockchain” frequently when you are dealing with cryptocurrency.
About the blockchain
These transactions are recorded in groups called blocks. Each block is linked together. This is why it is called a blockchain. Once a block has been filled with transactions it is irreversible and permanently stored.
The blocks can be seen as ledgers that are recording transactions.
The takeaway point is this: blockchain is the system that stores information about the transactions in cryptocurrencies.
Remember that transactions are being recorded because people are buying and selling cryptocurrencies for investment purposes and now some businesses are accepting crypto as a valid means of payment.
There is also good transparency when it comes to the blockchain system because the transactions are available to anyone who wants to see them.
What are the best cryptocurrencies?
There are many different currencies available in the crypto-world. The cryptocurrencies listed below are far from the only ones available, but they do represent most of the most popular ones to trade or invest in. We have a list of cryptocurrencies available here. The order is ranked based on market share and not based on any preference.
These will all be available on any Canadian crypto exchange as they are the most frequently traded. These high trading volume cryptocurrencies will allow you to buy and sell them with ease.
|Cryptocurrency||Market Share||Highest price||Lowest Price|
|BNB (Binance)||$71.1 billion||$695.95||$7.61|
The prices above show you the historical range that each cryptocurrency has traded in. This might give you an indication as to the affordability. Few people will be able to buy the actual bitcoin for example. You can buy derivatives of each cryptocurrency though. Meaning that you don’t need $40,000 or $60,000 to buy a single Bitcoin.
If you would like to find out how to buy cryptocurrencies and their derivatives or try trading them Click here
Advantages and disadvantages of cryptocurrency
Here are some considerations when deciding on whether to invest in cryptocurrency.
- Money transfer is cheaper and faster than fiat currency
- Difficult to forfeit
- Decentralization of crypto may mean better stability of the currency
- Transparency of transaction history
- Price volatility makes short term trading possible
- No intermediary needed to transfer between individuals
- Mining crypto is monopolized by parties with many resources
- Potential criminal use of crypto
- Mining crypto is resource intensive (energy and know-how)
- No inherent value (such as gold)
- The prices are volatile and may scare the risk-averse
- Banks change policies often
How do you buy cryptocurrency in Canada?
There are many different ways to buy cryptocurrency in Canada. You do have different options at your disposal to invest in cryptocurrency in Canada:
You can open an account on a cryptocurrency exchange. Some of the questions below will help you to decide what is the best crypto trading platform. This is the easiest way for most people to get started
You can open a crypto wallet. The easiest way to get a crypto wallet is to open one through a crypto exchange that offers free withdrawals and deposits. Then you can use the wallet feature to hold the crypto and you are not obliged to use the trading platform.
Buy from an individual
This option will require you to have a crypto wallet. This is where the benefit of cheap and fast transfer occurs because you are not buying through an intermediary.
What is cryptocurrency mining?
If you are wondering how is cryptocurrency mined, the answer is that the process is not simple.
It is important to know that mining cryptocurrency is a challenging and expensive task. It requires a lot of technical know-how and it has very high energy consumption.
Unless you have the skills, equipment and budget to do it, you likely want to invest in already mined cryptocurrency instead.
It has been said that some crypto-mining operations have used as much energy as the entire country demands.
Mining activities, as with traditional commodities, do not guarantee that you will find crypto coins or tokens. So, if you don’t have a large number of resources at your disposal, it is way simpler and less stressful to rather think about how to trade cryptocurrency
Which Canadian Banks allow cryptocurrency?
The following banks in Canada facilitate cryptocurrency:
|Bank||Crypto Acceptance||Credit Card||Debit Card||Interac e-Transfer||EFT or Wire Transfer|
|Royal Bank of Canada (RBC)||Yes||No||Yes||Yes||No|
|Toronto Dominion (TD)||Yes||Yes||Yes||Yes||Yes|
|Bank of Montreal (BMO)||Yes||No||No||Yes||Yes|
|Scotiabank (Bank of Novia Scotia)||Yes||No||Yes||Yes||Only Canadian cryptocurrency|
|Canadian Imperial Bank of Commerce (CIBC)||Yes||No||Yes||-||No|
|National Bank of Canada||Yes||Yes||Yes||Yes||Yes|
How to buy cryptocurrency with a credit card:
Many banks in Canada do not favour purchasing crypto with a credit card. So make sure that your bank facilitates cryptocurrency. Due to the volatile nature of crypto trading, you can get yourself into trouble buying cryptocurrency on credit. If it goes down before payment is due, you can find yourself without a way to pay it back.
Remember to include the cost of the borrowed money on credit with your crypto transactions.
Is cryptocurrency legal in Canada?
Yes! Cryptocurrency is legal in Canada. Some banks support purchasing and the Canadian Government recognizes it.
Remember that if you are making capital gains when selling your cryptocurrency, you may need to report it to the Canada Revenue Agency at tax time.
How much is crypto taxed in Canada?
The Canadian Government recognizes crypto as a commodity. Due to this, they will tax profits made on cryptocurrency. The CRA will class your cryptocurrency transactions into two classes. The first is business income and the second is capital gains.
If you are buying crypto to use as you would another currency, then this is not an income that is taxable.
When calculating the tax on income generated, you will need to determine whether the income is a business income or a capital gain. This will be a factor that will determine the amount of tax you will pay on your transactions.
The differentiation is simple: business income is a repeated procedure and capital gain is less frequent. For example, you will be buying and selling crypto often to earn an income and this will be deemed a business income. If you are selling crypto irregularly that you held for a longer period then it will be deemed a capital gain.
It is well known that tax evasion is illegal. But can you avoid tax on cryptocurrency in Canada?
Legally you can avoid tax in Canada. If you are trading crypto where the income will be deemed business income then you can find legitimate expenses to deduct from your income to pay less tax on your cryptocurrency income.
Some examples of things you may be able to deduct would be the internet bill and perhaps a portion of your rent at your home, given that you are trading from home. All the transaction fees and fees related to your crypto exchange or wallet could be a tax deduction as well.
Large irregular trades will be deemed as a capital gain or loss.
What is a crypto wallet?
A crypto wallet is a tool that you use to store your passwords that give access to your cryptocurrency. Your actual cryptocurrency is stored in the blockchain.
This wallet can be in the form of a mobile app, or even a USB drive that stores these passwords.
Consider using an application that will offer two-step authentication to make sure that your crypto is protected against cyber-crime.
What are peer-to-peer exchanges?
Peer-to-peer exchanges are trading platforms for buyers and sellers to exchange cryptocurrency directly. The buyers will choose a seller from the list on the platform themselves. There is no centralized authority or intermediary between the buyer and the seller.
There are some crypto exchanges that offer peer-to-peer exchanges.
What are the best peer-to-peer exchanges in Canada?
Some of the popular Canadian peer-to-peer exchanges are ByBit, Coinberry, NDAX, LocalBitcoins, Paxful and LocalMonero. There are more, but you will want to pick an exchange that has a lot of users so that you can buy and sell with certainty.
Read more about cryptocurrency in Canada
- List of Cryptocurrencies
- Is Kraken the top crypto exchange platform for Security? Our review.
- The world's best crypto exchange platform? Our review of Binance
- What Are The Best Crypto Staking Platforms in Canada?
- The best crypto trading platform for security? Our review of Bitbuy Canada
- What is crypto market capitalization?
- What is the best crypto wallets?
- Cryptocurrency terms and definitions
- The Definitive NFT Statistics Report (2022)
- The top cryptocurrencies in 2022 in Canada
- [Crypto] The Top 15 Crypto Influencers And Where They See The Bitcoin At The End of 2022