Author:
hannah
Last Updated on:
28.05.2023
Table of Content
What is Bitcoin?
Bitcoin is the world’s first cryptocurrency and to date, still the largest cryptocurrency in a sea of over 7,000 different digital currencies. Launched back in 2009, Bitcoin aims to take control away from the banks by providing a decentralized form of currency – free from government control or manipulation. As soon as the first bitcoin purchase came to light – a pizza of all things – trading of bitcoin generated extensive hype and slowly but surely, merchants began to accept bitcoin as a legitimate form of payment.
To this day most online casinos accept bitcoin, as well as major merchants such as Microsoft and Starbucks. Bitcoin is responsible for creating the crypto boom we see today and currently is still one of the hottest cryptocurrencies to buy in Canada. In 2021, bitcoin has been touted as a hedge against inflation and institutional recognition has grown significantly.
Where to Buy Bitcoin in Canada
There are a surprising number of ways to buy bitcoin in Canada. Firstly, you could set yourself up with a wallet and purchase bitcoin from an actual real-person – however, we suggest you only go down this route with somebody you trust as there are quite a few P2P bitcoin scams around online. Another way to invest in Bitcoin in Canada is at a licenced broker that offers cryptocurrency ETFs and CFDs – but hold that thought, we’ll have more on bitcoin CFDs later.
However, the safest and most common way to buy bitcoin in Canada is through a licenced and reputable cryptocurrency exchange. A cryptocurrency exchange lets Canadians buy bitcoin and other cryptocurrencies with either FIAT currency or cryptocurrency. In that sense, a cryptocurrency exchange is much like your usual online broker, but they actually provide features that are specific and ideal for buying bitcoin in Canada. For one, unlike a broker, cryptocurrency exchanges let you withdraw cryptocurrencies to a crypto wallet. A crypto wallet is needed to store your cryptocurrency safely and some of the best cryptocurrency exchanges in Canada offer a wallet with your trading account.
Our expert reviewers, here at Crypto Parrot, have researched plenty of outstanding bitcoin exchanges in Canada and we suggest you consult those to find the ideal cryptocurrency trading platform that’ll meet your specific requirements. The perfect exchange for you to buy bitcoin is an entirely individual choice and what works for another, might not be the best for you.
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How to Buy Bitcoin Canada
When opting to buy bitcoin in Canada through a cryptocurrency exchange, you’ll need to start by registering an account. Crypto Parrot have reviewed some seriously amazing exchanges in Canada, so you should have no problem picking the perfect one for your needs.
When taking advantage of the cryptocurrency boom, you may want to set up a crypto wallet of your own for total piece of mind. An online wallet is ideal for fast trading, while an offline storage option is the safest and offers the best defence against cyber criminals.
To register an account at a bitcoin exchange, you will need to provide some basic personal information and complete the standard Know Your Customer (KYC) procedure. This process involves inputting details and uploading copies of some basic documents such as your I.D and proof of address. Once your account is verified, you’ll be able to fund your account through several accepted popular Canadian payment methods.
- Sign up with a top cryptocurrency exchange and complete the KYC procedure. Make sure to take quality images of your documents to prevent any delays in the verification process. Customer support can be notoriously slow at some crypto exchanges, so you don’t want to wait even longer to be verified.
- Once verified, deposit CAD using one of the available payment methods. Depending on the crypto exchange, this could be via credit card, wire transfer, or perhaps even PayPal. There will be a minimum deposit amount too.
- Buy bitcoin! Or buy an alt-coin but bitcoin is the most popular cryptocurrency in the world. Buying is easy and the process won’t differ too much between crypto exchanges. Either select bitcoin from the marketplace or use the crypto exchanges search function to find bitcoin directly.
- Now you’ll need to store your Bitcoin. The best bitcoin exchanges in Canada will provide a safe wallet to hold your new digital asset in but you can choose to hold it in one of your own if you like. An exchange wallet is perfectly ideal for trading purposes but you really should use an offline wallet of your own for holding large amounts of bitcoin.
That’s all folks! So easy, right? Cryptocurrency exchanges offer plenty of guides and trading lessons for their platforms, so new traders shouldn’t have a problem getting started. Of course, we at Crypto Parrot have plenty of guides on making that first bitcoin trade too, plus the added bonus of putting your new found knowledge to the test on our risk-free trading simulator.
How to Invest in Bitcoin in Canada – CFDs
A Contract for Difference (CFD), refers to an agreement between a buyer and seller to exchange the difference of an asset at its current price and the price at the close of the contract. Essentially, it’s a bet that an asset is going to go up or down.
In recent years, cryptocurrencies have become an acceptable asset to trade as a CFD – typically CFDs were mostly a stock wager.
If you want to invest in Bitcoin in Canada but don’t want to actually own the asset, then a CFD is the perfect choice for you. With CFDs you can trade bitcoin in Canada with leverage. If this is the option for you, then you’ll need to register an account with a licenced online broker – cryptocurrency exchanges only trade with the actual underlying asset.
Make sure the broker you choose is licenced. All CFD brokers in Canada must meet the regulations set forth by the Investment Industry Regulatory Organization of Canada (IIROC). If in doubt, check that Crypto Parrot has reviewed the broker, or alternatively the IIROC to see all the online brokers that are regulated in Canada.
Registering an account with a broker is the same as registering at a bitcoin exchange. You’ll need to provide some personal details and upload documents for the KYC procedure. Once verified, you’ll be free to fund your account – you may find that most brokers have far more payment methods available than many crypto exchanges.
Investing in bitcoin as a CFD is a process not too dissimilar to buying bitcoin on an exchange. You’ll still select bitcoin, but this time you can choose to go long or short – i.e do you think the price will go up or down? This is quite unique to CFD trading and can be quite profitable if you can predict a big bear or bull run ahead of time. Brokers will let you take a CFD position with leverage too – meaning you can hold a position that is much larger than your actual capital – and the costs should be clearly stated before proceeding.
Benefits of Trading Bitcoin CFDs
With the rising valuation of some of cryptocurrencies biggest players, such as bitcoin and Ethereum, it can make sense to invest in price movement rather than actually owning the asset itself. With 1BTC costing 10s of thousands of dollars, it can take some serious capital to actually own one. Instead, you can now buy a micro-amount of bitcoin or, alternatively, you could just invest and profit from any bitcoin successes or even failures.
So what are some major benefits of trading bitcoin as a CFD?
Pros
Long or Short – If you own bitcoin, you’ll hate to see a bull run on the horizon. The value of your portfolio is about to drop. With CFDs you can actually take advantage of a dip by shorting the digital asset. This means betting against bitcoin and making money on the price going down rather than up.
Using Leverage – You’re going to see this in the cons too, for obvious reasons, but leverage can play into your hands if used strategically. Leverage has the potential to reap large rewards with less investment capital. Not a bad way to invest in an asset that is so expensive to own.
Trading Tools – Since CFD trading is facilitated at broker firms and not a bitcoin exchange in Canada, you’ll typically have access to far more trading tools. Brokers offer plenty of indicators and charts to perfectly curate your bitcoin trading strategies.
Cons
Using Leverage – While leverage is certainly a way to make big gains, it is unfortunately also a way to make significant losses too. If a trader isn’t careful, they can lose more than they can afford. Thankfully, most brokers do their best to avoid you losing too much as they will want you to repay them, after all.
No Ownership – There are benefits to owning the asset. Besides getting involved in a major change in how we see currency, cryptocurrency tokens have other uses too. They provide cheap and fast borderless payment solutions and some can be used to fuel decentralized apps.
Conclusion
There has never been an easier time to buy bitcoin in Canada than in 2021. There are several different ways to buy crypto but trading bitcoin at a crypto exchange is the best and easiest way in Canada.
Cryptocurrency exchanges provide users with great security features, a large marketplace, tons of trading tools, and a crypto wallet to store your new bitcoin purchases.
Now that you know how to buy cryptocurrency in Canada, you’ll be able to take advantage of a dip and buy in before a potential triumphant bull run! Just be sure to research your chosen crypto exchange before registering an account, to make sure it ticks all of your boxes.If you are after more help trading bitcoin in Canada, we insist you take advantage of our fantastic guides, available on the Crypto Parrot platform.
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