A Canadian perspective on cryptocurrency

A few weeks ago I took the plunge into the deep end and made my first cryptocurrency investment. Investing in bitcoin or Ethereum is easy, but not all services work equally well in Canada. These are my insights on buying, trading, and storing your bitcoins and cryptocurrencies.

disclaimer: this guide contains affiliate links. if you find the guide useful I'd love if you'd use them.

Getting your feet wet

Coinbase

If you’re brand new to the crypto world, Coinbase is the fastest, easiest, and perhaps safest way to make your first investment. You can buy Bitcoin, Ethereum, and Litecoin with a credit card, then send your coins to another wallet, or keep them in your Coinbase wallet.

Digital currencies held in your Coinbase account are fully insured, but with a 3.99% commission rate, it’s not the best place to make large investments. Also, Coinbase no longer gives Canadian customers the option to exchange cryptos into CAD or USD, so you’ll have to take profits elsewhere.

Coinbase is a great place to get your feet wet – as a new customer, you get US$10 in free bitcoin after signing up and buying at least US$100 of digital currency.

If you sign up your account with the link below, we’ll both get $10 in free bitcoin - high five!

https://www.coinbase.com/join/5904320ca8007ab756ac08aa

After signing up, you can refer your friends and get $10 in bitcoin each time.

QuadrigaCX (It’s pronounced kwah-dree-gah)

One of the best Canadian exchanges is QuadrigaCX based in Vancouver. You can fund your account via wire, bank transfer, INTERAC, or draft / money order, with fees range from 0 - 1.5%. Account funding can take up to 24-48 hours (they’re getting swamped with funding orders lately), so it’s worth setting this up soon.

Trading volume is a bit low on QuadrigaCX, so BTC and ETH prices are sometimes slightly above market, and orders may take a while to execute. Even so, because of their low trading fees (0.25-0.5%), this is still the best place for ‘medium sized’ investors (thousands) to trade CAD to Bitcoin and Ether. You can also exchange ETH/BTC, and then BTC to USD, which is an attractive option for any Canadians wanting a hedge against equities, or currency fluctuations (oil).

You can get started with QuadrigaCX here.

LocalBitcoins.com

LocalBitcoins is a person-to-person exchange, where you buy bitcoin directly from another human being. LocalBitcoins acts as a broker, providing escrow to protect you as a buyer. They only charge sellers a 1% transaction fee, but the prices offered are usually well above those on QuadrigaCX or Coinbase. Some wise traders earn 10-15% markups just by buying bitcoins on an exchange and then selling them on LocalBitcoins.com

Set up a LocalBitcoins account here.

Trading

Looking to invest into alternative cryptocurrencies like Ripple, Zcash, or Stellar Lumens? Do you also enjoy roller coaster rides?

USA-based Bittrex is the most secure online exchange, with 80-90% of cryptocurrency deposits held offline to protect against a data breach (like what happened at Mt. Gox).

Before trading into alternative cryptocurrencies (Altcoins), I recommend learning more about the fundamentals of what each platform's technology actually does, and who is backing it. There are a lot of junk coins out there that were somehow able to attract investment capital without offering much fundamental value.

Sometimes referred to as shitcoins, the Altcoins are highly volatile cryptocurrencies that can make big moves up and down very quickly. Volatility makes Altcoin markets an exciting place to trade, but are more like a Casino than investment. Only trade what you can afford to lose.

I am quite risk averse, so my strategy is to hold Bitcoins and Ethereum in a hardware wallet for the long-term, and only take short-term positions in Altcoin trading accounts.

If you're interested in learning more about crypto trading strategies and technical analysis, www.babypips.com is a great place to start. Traders should be on top of the news (Ethereum is interesting right now) and understand that this market is highly manipulated and speculative.

It's the Wild West of investment.

Storage

After buying or trading your cryptos, the safest way to store coins for the long-term is using an offline wallet.

I chose the Ledger Nano S for security, decent price, good development team, and the fact that it supports Bitcoin, Ethereum, Litecoin, Ripple, and several other altcoins.

https://www.ledgerwallet.com/r/46e0?path=/products/ledger-nano-s

Exciting times ahead...

After 3 weeks in the crypto market, I’m feeling good - my portfolio is up 40% vs the Canadian dollar, and 80% of my coins are held safely offline in my Ledger Nano S.

With our Canadian dollar becoming weaker each year in both purchasing power, and compared to the US dollar, a small crypto portfolio allocation (10% +) isn't a bad idea.

Pro tip:

When setting up your accounts, always write down your account details with pen and paper (not on your computer), keep a backup, and store it somewhere safe and private. Whenever possible, use 2-factor authentication with email, SMS, or Google Authenticator for added security.

Edit: with the sudden BTC and ETH price increases over the last few days, be cautious when you move into this market as it can move quickly - in both directions.

This isn't investment advice!

-Songbird