While crypto is becoming increasingly popular as an investment option, it’s important to know the risks involved before investing. Cryptocurrencies are not backed by any government or central bank, so they’re not considered to be legal tender in Canada and don’t offer the same level of protection as traditional assets like bonds, stocks and mutual funds.
If you choose to invest in a crypto, make sure you choose a reputable broker and check their registration status with the provincial/territorial securities regulator where you live. Also, be sure to keep your private keys safe and back up your wallets. If you lose your private keys or your computer is hacked, you may lose all of your crypto.
Investing in Crypto Canada: Best Strategies & Platforms
Investing in Crypto Canada is a complex and volatile asset class that can be used for speculative investments or to store value. It’s essential to understand how it works and research the technology, project goals and development team before making any decisions.
Finally, be sure to report any gains or losses on your tax return as required by the Canada Revenue Agency (CRA). When reporting crypto gains and losses, it’s critical to know your cost basis. The CRA uses an adjusted cost basis method that includes the amount it costs you to purchase or sell your crypto plus any transaction fees such as exchange and gas fees.
If you’re not comfortable investing directly in crypto, consider using a bitcoin ETF. These investment products allow you to easily track the performance of large-cap cryptos, like bitcoin, with low fees and in tax-advantaged accounts such as registered retirement savings plans. Several Canadian-listed ETFs are now available, including the Purpose Bitcoin ETF, CI Galaxy Bitcoin ETF and Fidelity Advantage Bitcoin ETF.