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How to Buy Ethereum In Canada: Everything You Need to Know

How to Buy Ethereum In Canada: Everything You Need to Know

Everybody is talking about cryptocurrency. What was once a fringe topic in the personal finance seen has gone mainstream. But understanding how blockchains and cryptocurrencies such as Ethereum and Bitcoin work can be difficult. In this article, I won’t attempt to demystify Ethereum. What I will do is show you two ways you can buy it – including one you may not have considered.

What Is Ethereum?

Ethereum is the name of a blockchain and the world’s second-largest cryptocurrency by market value, behind Bitcoin. Like Bitcoin, Ethereum is decentralized and can be stored in digital wallets and on cryptocurrency exchanges. Bitcoin, however, has a finite supply – there will only ever be 21 million BTC issued – while there is no limit to how much Ethereum, or Ether, can be produced. From the beginning, Bitcoin was meant as a form of exchange; an alternative to traditional currencies that fall under the control of governments.

How to Buy Ethereum

Because Ethereum is one of the main cryptocurrencies, it’s very easy to buy and store. The two methods that we’ll feature here include cryptocurrency exchanges and Ethereum ETFs. Let’s take a closer look at each:

Cryptocurrency Exchanges that Support Ethereum

Ethereum is supported by most crypto exchanges. I’ll highlight a few of the one’s we like, starting with Bitbuy:

Bitbuy

Bitbuy is our top-rated Canadian cryptocurrency exchange for 2021. Bitbuy’s pricing is transparent and competitive, and they built their trading platform for beginners and advanced traders alike. They prioritize security, a claim, not all crypto exchanges can make. If there’s a downside, they only support nine coins – however, Ethereum is one of them.

Learn more about Bitbuy.

Bitbuy Features:

  • Nine available currencies: BTC, BCH, EOS, ETH, LTC, XLM, XRP, AAVE, LINK
  • Standard trading fee .20%
  • Two trading platforms depending on experience level (Express Trade/Pro Trade)
  • The slick mobile app lets you trade on the go (iOS and Android)
  • FINTRAC registered
  • 95% of assets secured by cold storage

Wealthsimple Crypto

Canada’s largest robo-advisor has entered the crypto trading game. Wealthsimple launched crypto in 2020, supporting Bitcoin and Ethereum. They quickly expanded their offering to an impressive 25 coins. Highlights include free deposits and withdrawals, and an easy-to-use mobile app. There is also no minimum deposit amount, so it’s great for new traders just starting out.

On the downside, commissions of up to 2% are very high, and e-Transfers are not accepted as an account funding option.

Wealthsimple Crypto Features:

  • 25 coins offered, including Ether
  • CAD currency only
  • A trading fee of up to 2%
  • Deposits and withdrawals are free
  • Mobile app only (no desktop trading)
  • Fund account with Interac e-Transfer or wire transfer

Learn more about Wealthsimple Crypto.

Coinsmart

Coinsmart is one of Canada’s top cryptocurrency trading platforms, featuring low trading fees (standard fee is .20%). They support a decent number of coins (11 in total), including Ether. There is a 1.5% transfer fee when funding your account with less than $2000, but above that transfers are free. Coinsmart is known for its excellent customer support. In fact, they may be the only crypto exchange in Canada offering 24/7 support. If you’re an Android user, however, you won’t be impressed by their mobile app, which is iOS only.

Coinsmart Features:

  • Support for 11 cryptocurrencies, including Ether
  • A low trading fee of .20%
  • Free deposits over $2000
  • 1% fee for withdrawals
  • Mobile app is iOS only

Learn more about Coinsmart.

NDAX

National Digital Asset Exchange (NDAX) was founded in Calgary, Alberta, in 2018. NDAX stands out for the number of coins it supports (14, including Ether) and its low fees: trading fees are .20% and deposits are free. However, you have to be careful when transferring money out of NDAX. Their withdrawal fee is a flat $25. That’s ok if you’re transferring a large sum of money, but if you’re only moving a few hundred dollars, you’ll pay a steep price. They do have a unique referral program that lets you earn free crypto when you send your friends to NDAX.

NDAX Features:

  • Free deposits
  • Trading fee: .20%
  • 14 coins supported, including Ether
  • Earn crypto with the NDAX referral program
  • A flat withdrawal fee of $25 is steep for small transfer amounts

Learn more about NDAX.

Newton

Newton is a Canadian cryptocurrency exchange that originated in Toronto in 2018. Unlike the other exchanges on this list, they support more than 25 cryptocurrencies, including Ether. Instead of a trading fee, Newton makes money on the spread, meaning that they build the fee into the buy/sell price. As a pricing model, it lacks transparency because it’s challenging to know exactly how much you’re paying. Estimates, however, range between .50% and .70%, placing Newton above Bitbuy and Coinsmart but lower than Wealthsimple Crypto.

Newton Features:

  • Free deposits and withdrawals
  • Price is built into the spread
  • Over 25 cryptocurrencies are available, including Ether
  • You can transfer crypto into your account
  • Less pricing transparency than other platforms
  • The trading platform has limited functionality (no stop-limit order capability, etc.)

Learn more about Newton.

Ethereum ETFs

Did you know? You can now trade Ethereum inside an ETF, on the Toronto Stock Exchange. In the spring of 2021, the first Bitcoin and Ethereum ETFs were launched, making it easier than ever to hold crypto in your investment portfolio. You can buy Ethereum ETFs inside a regular discount brokerage account.

Better yet, if you open an account with Questrade or Wealthsimple Trade, you’ll save on the trading fees because both platforms offer commission-free ETF purchases. Ethereum owned in an ETF loses some of its decentralized appeal (it is tracked and reported on the exchange), but it becomes RRSP/TFSA eligible, a nice feature.

Currently, there are only four Ethereum ETFs in existence. Below is a summary of two: CI Galaxy Ethereum ETF (ETHX) and Purpose Ether ETF (ETHH):

1. CI Galaxy Ethereum ETF (ETHX)

CI Investments launched Canada’s very first Ether ETF on April 19th, 2021. It features a low MER of .40% (Crypto ETFs have higher MERs than the standard market index variety.) They’ve also capped the MER at .95%, meaning that no matter what happens, the MER will never increase beyond that figure. Total Assets Under Management (AUM) are over $900 million.

ETHX Features:

  • Launched April 2021
  • Trades on the Toronto Stock Exchange (TSX)
  • Ticker: ETHX
  • MER: .40%
  • MER Cap: .95%
  • Ethereum kept in 100% cold storage
  • RRSP/TFSA eligible

2. Purpose Ether ETF (ETHH)

Purpose Investments also launched an Ether ETF in April of 2021. It has a much higher MER than the CI fund, at 1.0%. This won’t impact smaller portfolios but is a factor for larger investors. Like ETHX, the Purpose ETF is RRSP and TFSA eligible. The current AUM is just over $320 million.

ETHH Features:

  • Launched April 2021
  • Trades on the Toronto Stock Exchange (TSX)
  • Ticker: ETHH
  • MER: 1.00%
  • MER Cap: 1.50%
  • Ethereum kept in 100% cold storage
  • RRSP/TFSA eligible

Final Thoughts on Buying Ethereum

Ether has been around for a while now, but that doesn’t mean it’s a safe investment. All cryptocurrencies should be considered speculative investments, with values that can swing wildly over short periods. Being that it’s open-ended, among other things, it’s tough to place a value on coins like Ether.

While I cannot recommend Ether or any other cryptocurrency as a suitable investment, it may be acceptable as a minor holding in your overall portfolio, like 2%-5%, for example. Of course, never spend money on Ethereum that you can’t afford to lose.

Comments

  1. Tahir Khuwaja

    Thanks a lot Tom. How do you see Evolve ETF’s ETC as an option to have cryptocurrencies exposure in the portfolio. It is kind of unique with respect that it has both Bitcoin and Eth.

  2. alex

    Hi Tom,
    Always love receiving your newsletter.
    What is your favorite for wallets? Ledger vs Trezor?
    Thank you

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