How to Buy Ethereum in Canada in 2023
What is Ethereum?
Before looking at how to buy Ethereum in Canada, it’s important to understand this particular cryptocurrency. Ethereum is the second-largest cryptocurrency by market capitalisation. As of January 2023, the market cap stood at $198 billion dollars.
Ethereum is similar to Bitcoin in many ways, including the use of blockchain technology, but there are some note-worthy differences:
- Ethereum utilizes dApps (decentralized apps), and its currency, ether, powers transactions.
- The Ethereum blockchain allows apps and smart contracts to execute automatically without a 3rd party.
- Ethereum was created by Russian-Canadian programmer Vitalik Buterin among other computer programmers, in 2013.
Considerations Before Buying Ethereum in Canada
Although it’s not illegal to buy/sell Ethereum in Canada, this cryptocurrency isn’t formally regarded as legal tender in the country. As a result, Canadians and Canadian businesses aren’t obligated to accept Ethereum for payment of goods/services.
It’s also worth noting that there are tax implications for buying/selling (or trading) Ethereum and other cryptocurrencies in the country. This is because the CRA (Canada Revenue Agency) treats income from trading Ethereum and other cryptos as capital gains or business income subject to taxation. As a result, such income must be declared when filing returns.
How to Buy Ethereum in Canada
If you are interested in buying Ethereum in Canada but don't know where to begin, don’t worry, it doesn’t have to be a complicated task. There are two main aspects to keep in mind:
1: Create an Ethereum Wallet
Before you buy Ethereum, think of where you will store the cryptocurrency i.e., a hardware wallet or software wallet.
1. Hardware wallets (cold wallets): As the name suggests, these types of cryptocurrency wallets exist as computer hardware i.e., hard drives and USB drives. Hardware wallets aren't connected to the internet, making them more secure. That said, they have their own cons. For instance, if your hard drive or USB drive gets damaged or lost, you can lose your Ethereum. For this reason it’s important to always have a backup of your seed phrase, stored somewhere secure, ideally in a physical manner, such as writing it on a piece of paper. Do not store your seed phrase in an online place such as Google Drive or you risk losing all the crypto in your wallet if someone gets ahold of it. Even if they don’t have your hardware wallet. For this same reason, when physically storing your seed phrase you should make sure it’s in a secure location where nobody can steal it from you.
2. Ethereum websites provide various options for securely storing your seed phrase, including hardware wallets, paper wallets, and offline storage. Software wallets (hot wallets): These wallets exist online, making them susceptible to hacking, among other security risks. However, they are easy to set up and use. The official Ethereum website lists software wallets you can consider using based on factors like feature preferences.
2: Decide Where to Buy Ethereum in Canada
There are 4 main options for Canadians to consider when buying Ethereum. They include international or Canadian cryptocurrency exchanges, P2P trading platforms, Ethereum ATMs, and ETFs. Let's take a closer look.
I. International or Canadian Cryptocurrency Exchanges
We all know there are Canadian and foreign crypto exchanges operating in Canada. While you can use international exchanges to buy Ethereum, we believe it’s better to choose Canadian cryptocurrency exchanges that are regulated locally. The benefits of such exchanges are obvious. For instance, you don’t have to worry about jurisdictional issues or fraud since Canadian crypto exchanges (regulated as money service businesses) are subjected to FINTRAC regulations, which have clear rules on terrorism financing, money laundering, and personal data protection.
Canadian cryptocurrency exchanges also accept Canadian currency, which lowers exchange rates. You can expect to buy Ethereum using Canadian Dollars at the best possible rate. International cryptocurrency exchanges operating in Canada, on the other hand, prefer United States Dollars, resulting in high trading costs for those buying Ethereum in Canadian Dollars.
Local crypto exchanges also understand the needs of Canadian buyers better. For instance, they provide the fastest ways to purchase Ethereum in Canada i.e., using Interac e-Transfer and credit cards. MyBTC.ca is Canada’s leading cryptocurrency exchange for buying Ethereum and Bitcoin. Initially, MyBTC.ca was a Bitcoin-only exchange but in mid-2022, we started supporting Ethereum transactions.
Here are some of the leading benefits of buying Ethereum via a Canadian cryptocurrency exchange like MyBTC.ca:
- MyBTC.ca is 100% Canadian, which means you will be supporting a truly local company.
- MyBTC.ca has also earned the trust of Canadians buying Bitcoin since 2016 and Ethereum since mid-2022, which is evident in verifiable reviews on Trustpilot and Google.
- MyBTC.ca is also a regulated Canadian money service business - MSB number M20844324 subject to FINTRAC regulations, which makes it safe and reliable.
- Another reason for buying Ethereum in Canada with MyBTC.ca is the multiple payment options like Interac e-Transfer, credit cards, wire transfer, and Flexepin vouchers that make up the most popular payment methods in Canada.
- You can also buy Ethereum instantly in Canada and enjoy 24/7 live chat customer support in case you need it.
- The Ethereum buying process is simple due to the intuitive MyBTC.ca user interface.
- Most importantly, you can sell Ethereum in Canada the same way: instantly and safely.
Keep in mind: People who buy crypto via custodial crypto exchanges can use third party wallets offered by such exchanges. MyBTC.ca is a non-custodial crypto exchange.
II. Peer-to-Peer Marketplaces
Ethereum can also be bought in Canada via P2P platforms, which are simply websites connecting people who wish to trade cryptocurrencies. Such marketplaces may have low transaction fees (usually 0.25% - 0.75%). However, they offer user anonymity which comes with some risks.
P2P crypto transactions also take longer than crypto exchange transactions. You can expect to wait for minutes to hours, depending on the availability of buyers/sellers.
III. Ethereum ATMs
You can also purchase Ethereum in Canada using an Ethereum ATM; their locations can be found online. The buying process is simple, in many cases, you’ll just need to scan the QR code in your crypto wallet, input the amount of ETH you want, and complete the transaction. Just a heads up that you can expect to pay high trading fees (above 10% in many cases). Ethereum ATMs also have other disadvantages, such as low limits compared to other methods like crypto exchanges that allow up to $500,000 per day when you pay for Ethereum using money sent via a bank wire transfer.
IV. Buying Ethereum in Canada Using ETFs (Exchange-Traded Funds)
You can buy Ethereum ETFs that work like mutual funds but with exposure to Ethereum investments. This is an indirect method of buying Ethereum in Canada that doesn’t require setting up a crypto wallet. Although this might sound like a good option, you do need a decent understanding of how ETFs work and how experienced traders work to decide if this is the ideal way of buying Ethereum.
To wrap it all up...
It's clear there currently are many options available for people to buy Ethereum in Canada. The most important thing is to make an informed decision and make sure your finances are safe and well taken care of, regardless of the method you choose. We hope this 2023 guide can help you do just that. If in doubt, keep in mind the aspects we have covered and ensure your method of choice can meet all of your needs.
FAQs About Buying Ethereum in Canada
1. Why Should I Buy Ethereum?
While both Bitcoin and Ethereum use blockchain technology, Ethereum supports smart contracts (peer-to-peer contracts) and decentralized apps. Bitcoin may be a more popular cryptocurrency and better as a store of value, while Ethereum is regarded as a better cryptocurrency for utility.
2. Ethereum vs Bitcoin: What’s the Difference?
Ethereum allows smart contracts, while Bitcoin doesn't. This feature makes it possible to automate contract execution and create decentralized apps (dApps) in gaming, finance, web browsing, and more.
Ethereum also differs from Bitcoin in supply: Bitcoin has a fixed supply of 21 million coins, while the supply of ETH can be increased.
3. How Do You Purchase Ethereum in Canada Using an Exchange?
Buying Ethereum via a crypto exchange like MyBTC is as simple as signing up. New users need to enter their phone numbers as the first step of creating an account. Other information needed includes an email address and personal information like name, DOB, and address. Once you provide such information, your account will be opened instantly. You need to complete ID verification to be able to add funds to your MyBTC account, after which you can buy Ethereum instantly.
4. How Do I Sell Ethereum in Canada?
Once you have bought Ethereum via a crypto exchange, selling is as simple as inputting the amount of Ethereum you wish to sell and clicking the sell button. Funds are deposited to your crypto exchange account immediately, and you can withdraw shortly after in Canadian dollars or another currency of your choice.
5. Is Buying Ethereum Risky?
Buying Ethereum and any other cryptocurrency comes with some risk. Cryptocurrencies can fluctuate in price due to many factors. It’s important to research widely and understand the risks associated with buying crypto assets or digital assets.
6. What are the Pros of Buying Ethereum?
Ethereum is a decentralized digital currency that can't be controlled by central banks and governments, as is the case with FIAT currency. Ethereum also has application benefits. Unlike other cryptocurrencies, it can be a store of value and plays a crucial role in building decentralized applications and executing smart contracts.
7. What are the Cons of Buying Ethereum?
Like all cryptocurrencies in Canada, Ethereum isn't considered legal tender. While it's legal to buy/sell Ethereum in Canada, businesses, and people aren't obligated to accept it as a means of exchange. Unlike Bitcoin, Ethereum’s supply isn't capped. However, since this cryptocurrency is used for transactions and dapps —capping it may appear counterproductive.