Best Cryptocurrency Trading Platform in Canada 2021
Which is the best cryptocurrency trading platform in Canada? Our seasoned traders have, in December 2020, tried out all the major platforms for cryptocurrency trading in Canada and we’ll give you all the answers. Also in this article, how does cryptocurrency trading work? Where can I trade cryptocurrency? How do I trade cryptocurrency for cash? And how will cryptocurrencies and their unique features revolutionize the ways we exchange value and minimize trust?
Table of Contents
- Best Cryptocurrency Trading Platforms in Canada in 2021
- How to choose the best cryptocurrency trading platform?
- The cryptocurrency trading market
- Is cryptocurrency trading a hype?
- How to buy cryptocurrency?
- The difference between buying and trading cryptocurrencies
- What is a cryptocurrency and how does it work?
- What Does Trust Minimization/Censorship Resistance Mean?
- Why is Bitcoin the Biggest Cryptocurrency and Why Is it Likely to Retain That Title?
- The Ups and Downs of Bitcoin
The 3 best cryptocurrency trading platforms in the Canada are:
- AvaTrade Cryptocurrency Trading Platform
- Forex.com Cryptocurrency Trading Platform
- easyMarkets Cryptocurrency Trading Platform
Best Cryptocurrency Trading Platforms in Canada in 2021
Here you have the answer to where you, as a Canadian trader, can trade cryptocurrency. The following are solid brokers, that can be trusted and offer trading in both bitcoins and other major cryptocurrencies such as Ethereum and Litecoin. Take into account the quick facts of each broker in the top list and then read a more in-depth review of the broker and trading platform by clicking on the “read review” link:
How to choose the best cryptocurrency trading platform?
Our first recommendation is that you choose a trading platform that is regulated. You have to feel safe with your investment. The best crypto platforms in Canada are regulated in different jurisdictions as you can see in the top list above. Some of them are regulated by the main financial regulator in Canada, the IIROC. The second important criteria you should look at is what cryptocurrencies are offered by the trading platform. And the third and very important criterion is how much it will cost you to trade on that crypto trading platform and how you can withdraw your money if you want to let go of your investment.
The cryptocurrency trading market
Cryptocurrencies surprised many people in 2015-2017, through the massive price-explosion many of them have gone through. Bitcoin is obviously the foremost exponent of the crypto industry and its price evolution has been the most spectacular thus far, see the ups and downs of Bitcoin below. Volatility has always been a sort of natural accessory of the cryptocurrency markets, and it, coupled with the unprecedented gains registered by the market as a whole, has turned cryptocurrencies into extremely attractive potential investment vehicles.
Is cryptocurrency trading a hype?
More and more people are interested in purchasing cryptos as an investment and more and more people are worked up about trading various crypto-based financial products. The hype is understandable: while other asset classes yield absolute maximums around the 30% mark per year, with bitcoin and its ilk, we’re talking about growth in the neighborhood of 1,000%. Above and beyond the cries of “bubble” it elicited, this ridiculous accrual of value has caught the attention of hedge fund and mutual fund managers, who now see in cryptos a very attractive way of expanding their investment portfolios.
How to buy cryptocurrency?
The most rudimentary form of cryptocurrency trading is about purchasing and holding the currencies. Crypto exchanges provide the backdrop for this type of trading, which is essentially just a newer take on the age-old buy-low-and-sell-high angle. Such investors thrive under extreme volatility and the fact that by nature, bitcoin is a deflationary currency (there’s a limited number of BTCs that will ever exist), gives them a nice theoretical safety-cushion.
The difference between buying and trading cryptocurrency
Based on the above-said, it is hardly a surprise that existing online Forex/CFD brokerages have already gotten in on the ground-floor of cryptocurrency trading. Though most such operators advertise that they support the trading of bitcoin, what they offer are in fact bitcoin-based CFDs (Contracts for Difference). CFDs are financial derivatives, which means that when trading them, traders don’t actually get to own any cryptocurrency. Instead, they work with the difference between the exit- and entry-prices of their trades. With CFDs, the amount by which the underlying asset price goes up (or down) is crucial, as it determines the actual profits (or losses) traders will incur.
Such crypto CFDs are featured by scores of brokers. In fact, the setup has become a sort of fad among online brokers, and all those who fancy themselves cutting edge, have pinned them to their product selection, as you can see above in our top list.
What is a Cryptocurrency and how does it work?
A cryptocurrency is a virtual/digital cash, payment, and settlement system, that is double spend- and counterfeit-proof. Most cryptocurrencies use a blockchain to achieve double-spend protection. The ones that are decentralized offer several other features, such as:
- Trust minimization.
- Censorship resistance.
- Permission-less nature.
How does a Cryptocurrency work?
Cryptocurrencies are virtual coins/tokens that people exchange online in a peer-to-peer manner, without an intermediary. The value of a crypto coin is defined by the market. More precisely, by what people are willing to pay for it.
On a deeper level, the value of a cryptocurrency also hinges on its utility. Scalability and transfer speeds are variables in the value equation as well.
Every cryptocurrency resides on a network. This network may be a decentralized or centralized one. In the case of bitcoin, we are talking about decentralization. The more people mine or stake a given cryptocurrency, the more decentralized its network becomes.
That raises the question: what is cryptocurrency mining?
Crypto miners are the backbone of PoW (Proof of Work) cryptocurrency ecosystems, such as bitcoin’s. Mining consists of the painstaking churning of data with the help of specialized hardware. In addition to solving complex mathematical problems, miners also verify and add transactions to the blockchain ledger. They transmit and log transactions. They also verify and maintain the ledger. Miners get newly minted coins as a reward for their efforts and the energy they expend through computing power.
PoS (Proof of Stake) networks require participants to keep set amounts of digital coins in special wallets. The Proof of Stake method does not require computing power and it does not use up any energy to that end.
What Does Trust Minimization/Censorship Resistance Mean?
According to some, bitcoin is trustless. What this means is that A can pay B without the need for a third party to provide trust. According to Nick Szabo, one of the fathers of the cypherpunk movement, bitcoin is trust-minimized. It is as close to being trustless as possible, but it is not completely trustless.
From trust minimization stem some other attractive features. Bitcoin is permission-less. Meaning that it can be transferred from one person to another, across the globe if needed, without the permission of a third party.
As such, the cryptocurrency is also censorship-resistant. There is no trust-providing intermediary involved in transfers, which could censor certain payments. Bitcoin is a lot like cash: as long as A wants to hand it to B, there is nothing anyone can do to prevent the transfer.
Why is Bitcoin the Biggest Cryptocurrency and Why Is it Likely to Retain That Title?
As the first widely-known cryptocurrency, bitcoin enjoys something called “the first-mover advantage”. It has been around for more than ten years now. By simply being around, it has proven its feasibility to some degree. This is more than other cryptocurrencies can boast.
Furthermore, despite being somewhat clunky and cumbersome, bitcoin is not an inflexible contraption. It is programmable money. It enjoys the backing of some of the brightest minds in the industry. Bitcoin can change and incorporate changes necessary for its survival in the future. It could theoretically even adopt a PoS consensus model instead of the currently used PoW, although such a move is not likely.
Given these attributes, some say it is futile to search for the “better bitcoin”. Bitcoin itself is capable of changing and improving, thus becoming the better version of itself.
The Ups and Downs of Bitcoin
Over its decade-long existence, bitcoin has been a highly volatile digital asset. It went through several boom-and-bust cycles. After each such cycle, however, it managed to hold on to some of its gains.
Interestingly, these boom-and-bust cycles have coincided with bitcoin’s halving. Every four years or so, the mining reward for bitcoin is cut in half. Currently, miners earn 12.5 bitcoins every 10 minutes in the shape of block rewards. After May 2020, this reward will be just 6.25 bitcoins every 10 minutes.
The increasing scarcity of the digital asset explains these cycles up to a point. Beyond that, human greed and emotions step up and run away with the price.
Analysts have worked out predictions regarding BTC’s post-halving price, based on past data. Such exercises are hardly exact (or reliable), however. They predict massive price gains and another parabolic bull run, sometime after the halving.
Thus far, we have had three such cycles. The latest one, that of December 2017, took the price of one bitcoin to almost $20,000. If you want to trade bitcoin you can use one of the best crypto trading platforms in Canada above. For further reading, you can see our reviews of the overall best trading platforms in Canada here.