Factors To Consider When Choosing Cryptocurrency And Bitcoin Exchange Platform In Canada

When choosing a Canadian cryptocurrency exchange, it’s important to consider a variety of factors. 

  • Deposits methods: Top global cryptocurrency exchanges such as Coinbase and Binance may offer the ability to purchase crypto with your Canadian debit or credit card, however, this will often come with a hefty exchange rate fee. You can therefore bypass this and get your crypto as cheaply as possible by using a Canadian-based cryptocurrency exchange that allows Interac e-Transfers. 
  • Ease of use: It’s important to find an exchange that makes the process of trading crypto as easy and intuitive as possible. Some cryptocurrency exchanges have advanced interfaces with charts and order books that might be suitable for seasoned investors, but anybody new to crypto might find those tools overwhelming. A simple platform that is beginner-friendly will give you confidence that you’re making the right moves. 
  • Coin selection: Perhaps you’re only interested in trading Bitcoin and Etheruem. After all, these two coins hit the headlines the most. However, if you’re looking to trade altcoins, perhaps for short-term profits and day trading, then you’ll need to find an exchange that offers more than just Bitcoin and Ethereum. Consider the trading pairs that crypto exchanges offer. For example, you might want to trade your XRP to Cardano, but that pair might not be available meaning you would need to first convert your XRP to Bitcoin, then buy Cardano with that Bitcoin. For simplicity and cost-effectiveness, find an exchange that offers the trading pairs you think you’ll need. 
  • Fees: There are several types of fees to consider when choosing a cryptocurrency exchange. Some cryptocurrency exchanges offer free fiat deposits and withdrawals and others don’t. On top of that, you’ll need to pay transaction fees when you buy crypto with fiat, buy crypto with another crypto, or sell crypto for fiat. You’ll also be charged a fee when you withdraw crypto off the exchange to a wallet. These fees cover the mining costs which include validating your transaction and adding it to the blockchain. 
  • Cryptocurrency exchanges will also take a commission from trades, which means they will incentivize you with lower fees the more frequent and higher your trades are. Most cryptocurrency exchanges will have a full list of their fees on their website. 
  • App: A cryptocurrency exchange that has its own app may or may not be important to you. If it is, you’ll want to find one that has a simple interface that makes trading on the go a breeze. Be sure to read reviews of the app and make sure that the exchange has released multiple versions - it means they continuously fix bugs and keep it up to date. The last thing you want is an app that is at risk for a security breach. Watch out for cryptocurrency exchanges that only have an app for iPhones or Androids but not both. Make sure you sign up for an exchange that has an app compatible with your phone. 
  • Customer support: Good customer service is imperative. Some cryptocurrency exchanges will only offer email support, while other will offers support via phone, email, live chat and social media. Things can go wrong when trading crypto. You could be locked out of your account, or a deposit might not clear, or your verification process might have failed. Whatever happens, you’ll want peace of mind knowing you’re with an exchange that takes their customers’ technical issues seriously. Try to find an exchange that offers 24/7 support in multiple forms.
  • Security: Security is one of the most important things to consider when choosing a cryptocurrency exchange. You’ll want to find an exchange that utilizes a cold storage system, which means to store coins offline and therefore less likely to be stolen by hackers. Some exchanges will be insured for losses. For example, Wealthsimple’s coins are held by Gemini Trust Conmpany LLC™ with $200M in insurance coverage. Any reputable exchange will require you to go through a Know Your Customer (KYC) verification process when signing up. If the exchange requires you to submit identity documents then you know they are fully compliant and take money laundering and fraud seriously. These verification steps ensure your privacy and security. 
  • Reputation: If they’ve been around long enough, most cryptocurrency exchanges will have customer reviews and reviews from websites such as Finder. Read some reviews and get a feel for what these exchanges are good at and what their customers like and dislike about them. If an exchange has more bad reviews than good ones, then it’s probably best to stay away. 

Not all cryptocurrency exchanges are perfect, but if you keep these factors in mind, you’ll be able to find one that suits your wants and needs. 

How Cryptocurrency Exchanges Are Regulated In Canada?

While cryptocurrency laws and regulations are still being ironed out, Canada has acknowledged its growing use and has published official guidance for clarity. For example, you must disclose certain cryptocurrency transactions in your tax returns. In Canada, cryptocurrencies are regulated under securities laws and they are not considered legal tender.