Cryptocurrency is on the rise. More and more people are buying into the hype (which isn’t empty, mind you). In the world of cryptocurrency, Bitcoin is the name that pops up first in people’s minds. While Bitcoin may be the most popular cryptocurrency out there, it’s certainly not the only one. There are numerous other cryptocurrencies such as Dogecoin, Ethereum and Ripple where you can invest your money. In this post, we will take a look at how you can buy Bitcoin in Canada, and other cryptocurrencies in general. Let’s get started.
How To Buy Bitcoin in Canada: All You Need To Know
How can you buy Bitcoin in Canada?
To buy and sell Bitcoin, it is necessary to go through an exchange platform. Banks tend to look down on cryptos, and do anything to prevent you from buying them. It is therefore not possible to use the same circuit as for buying shares, for example.
Some platforms trade crypto real currencies, but the vast majority only trade crypto, which means you have to pay with crypto to get another crypto. Typically, crypto exchanges use Bitcoin or Ethereum as the base currency.
So the first step is to find a way to buy Bitcoin (or any other crypto) with Canadian dollars. You are then free to use one of these cryptos to buy others.
Buying and selling cryptos requires the organization and several steps must be observed:
- Find a bitcoin platform or seller that works with Canadian dollars to link back and forth with your bank account.
- Buy basic crypto that will be used to buy other cryptos: Bitcoin or Ethereum in particular.
- Send crypto funds to a platform that sells the crypto you are interested in. For example, sending Ethereum to the Binance branch to buy Ripple.
- When you have made profits that you want to convert back into Canadian dollars, you have to go back: convert the crypto into basic crypto like Ethereum or Bitcoin, send everything back to a Canadian platform, sell against the Canadian dollar. Finally, transfer everything to your bank account.
How soon can you start trading in Bitcoin?
Most agencies have procedures for verifying their users (KYC, Know Your Customer), which often require sending copies of IDs or invoices, which can take several days. Account verification could take several weeks due to the massive influx of new users. It is recommended that you open accounts in the agencies that interest you as soon as possible, even if you do not want to invest right away. If the urge to get started later comes to you, your accounts will already be opened and verified.
As Bitcoin and other cryptocurrency has increased in popularity, several banks have limited the freedom of their customers to invest their money as they wish, by prohibiting purchases of cryptos by credit card (which is normal), or by Interac Online (which is not). Some even block transfers.
What is the “Bump and Dump” technique?
Be aware that some dishonest investors practice “Bump and Dump“. Gathered in groups of social networks, they agree to mass buy a specific cryptocurrency at a specific time, which increases its value artificially and quickly; this is the “Bump”. The excitement created by this surge in prices attracts bargain-seekers who in turn buy, pushing the price even higher. When the pre-set value is reached, the initiators of the “bump” sell everything, make a big profit, and cause the price to collapse rapidly. This phase is called the “Dump”. Those who bought without being part of the secret do not have time to react and end up with crypto that is no longer worth anything. So if you see a little-known currency is seeing a 100% rise in one day, beware.
Buying Bitcoin in Canada: Critical Information
The most important step is to be able to buy Bitcoin or Ethereum with Dollars, and it often depends on the goodwill of your bank. It is certainly possible to buy Bitcoins with cash through a special ATM machine, but it is not yet a very widespread or practical option.
Once you have finally managed to exchange your dollars for Bitcoin or Ethereum, you are free, since you have escaped the banking system. You can then hold onto them hoping the price will rise, or buy other cryptos that you think are more promising.
How to Buy Bitcoin in Canada: Conclusion
Be very careful if you choose to invest in cryptocurrencies. Educate yourself on the seriousness of the crypto you covet, as some are really fancy. Don’t just go for the one which has shown a massive boost in the last few days. Research thoroughly about that cryptocurrency’s history.
Concentrate first on the most installed (Bitcoin, Litecoin, Ethereum) before venturing into the field of more confidential, and riskier altcoins (cryptocurrency other than Bitcoin). If you invest just because your friend told you it was a 50% quick return, you might be disappointed.
Learn about the technology involved (blockchain), study each currency, learn about developers, learn to read curves. If you do this work, you will be one step ahead of the many newbie investors who are only motivated by the bait of gain. Don’t buy something you don’t know or understand. If the terms resistance, support, MACD, stop loss, blockchain, HODL, Fud, RDI don’t mean anything to you, that’s a bad sign. Get trained before you dive into the world of buying Bitcoins in Canada.
Remember to only invest the money you can afford to lose. The market is choppy and volatile, and crypto that looks like a good deal can collapse in the blink of an eye. Above all, do not borrow to buy, and never buy coins with credit cards (The fees are higher than for a classic purchase).
Do not advise your relatives, friends or family to invest in cryptocurrency. If they make a profit, they aren’t going to give you a share of the profits, and if the market goes down you will be blamed for your bad advice. Stay discreet and neutral. In the same vein, don’t show off on Facebook if you make money with cryptocurrencies, you might get in trouble later.
Don’t trust the advice of just about anyone. The market is so unstable and poorly regulated that everything can change very quickly in either direction. If a crypto company announces good news, such as a promising partnership, you can expect the price to rise. Never take at face value what you can read on Reddit and Facebook, and generally any mainstream site. There is a lot of misinformation and attempts at price manipulation. The only interest of this disinformation is its psychological effect on the market. A rumor can have a huge effect on the market, which you can learn to anticipate. Sometimes even a tweet by a celebrity can increase the value of a cryptocurrency massively (as it happened with Elon Musk tweeting about Dogecoin). Avoid leaving your Bitcoin on the platform, as they can be hacked or be inaccessible while the site is under maintenance. As often as possible, send them to a personal virtual wallet.