Cheapest Way to Buy Crypto in Canada

Imagine paying a small fraction of the fees others pay to buy cryptocurrency in Canada. Now, wouldn't that feel like a victory? Buying crypto can be intimidating, especially when you factor in the fees that often leave your wallet lighter than expected. But there are ways to navigate these waters and emerge victorious, with more crypto in your digital wallet and fewer fees on your bill. Here’s how you can buy crypto in Canada without breaking the bank.

1. Leverage the Power of Peer-to-Peer (P2P) Exchanges

The most cost-effective way to buy cryptocurrency in Canada is through Peer-to-Peer (P2P) exchanges. These platforms connect buyers directly with sellers, cutting out the middlemen that often drive up costs. P2P exchanges like LocalBitcoins, Paxful, and Binance P2P allow you to negotiate prices directly with sellers, and you often only pay a small fee to the platform, if any at all. The competition among sellers ensures that prices stay competitive, and if you’re patient and diligent, you can secure deals that are well below market rates.

Moreover, P2P exchanges often allow you to pay using a variety of methods—Interac e-Transfer, PayPal, or even cash—which can further reduce the cost depending on the payment method’s fees. The flexibility in payment options and the ability to directly negotiate prices makes P2P exchanges a powerful tool for the frugal crypto buyer.

2. Use Canadian-Based Cryptocurrency Exchanges

When considering low-cost options, it’s important to look at local exchanges like Shakepay, NDAX, and Newton. These exchanges are tailored to the Canadian market and often have lower fees than international competitors. They typically support CAD deposits through Interac e-Transfer, wire transfers, or bank drafts, which minimizes conversion fees and delays.

For instance, Newton boasts zero-fee trading, meaning they do not charge any trading fees. However, they make money on the spread between the buy and sell price, so while you might not see a fee per se, you might pay slightly more than the market price for your crypto. Shakepay offers a similar structure, but with a slightly higher spread. NDAX, on the other hand, charges a flat 0.2% trading fee, which is one of the lowest in the industry, particularly when combined with their tight spreads.

Using these exchanges also helps you avoid high international wire transfer fees and unfavorable exchange rates that come with using foreign platforms. Stick to Canadian exchanges to keep your costs in check.

3. Buy in Bulk to Save on Fees

Crypto purchases are often cheaper when you buy in larger amounts. Many exchanges charge flat fees for transactions, meaning whether you buy $100 or $10,000 worth of crypto, the fee remains the same. This is especially true for network fees, which can eat into smaller purchases disproportionately. By buying larger amounts less frequently, you can spread the cost of these fees over a larger investment, effectively reducing the percentage of your purchase eaten up by fees.

For example, if you’re charged a $5 fee for a $100 purchase, that’s 5% of your investment lost to fees. However, if you’re charged the same $5 fee for a $1,000 purchase, it’s only 0.5%—a significant saving. This strategy is particularly effective on exchanges that have flat fees or low percentage fees, as the savings can be substantial over time.

4. Monitor and Time Your Purchases

Timing is everything in the world of cryptocurrency. Just like with stocks, crypto prices fluctuate throughout the day, and the difference between buying at a peak or a dip can be significant. Tools like CoinMarketCap or CoinGecko allow you to track price movements and historical trends, helping you identify the best times to buy.

Additionally, some exchanges offer lower fees during off-peak hours when there’s less demand on the network. By making your purchases during these times, you can save on both trading fees and network fees. While this requires a bit of patience and monitoring, the savings can add up, especially if you’re making frequent purchases.

5. Explore Alternative Cryptocurrencies

Bitcoin and Ethereum might be the most popular cryptocurrencies, but they’re also some of the most expensive to buy due to high demand and network fees. If you’re looking to save money, consider investing in alternative cryptocurrencies, or altcoins, that have lower transaction fees.

For instance, Litecoin and Stellar offer significantly lower fees than Bitcoin and Ethereum. These altcoins are also faster to transact with, meaning you can avoid the congestion and high fees associated with more popular cryptocurrencies. Additionally, many exchanges offer incentives or lower fees for trading certain altcoins, making them an attractive option for budget-conscious investors.

6. Utilize Crypto Credit Cards for Rewards

Another savvy way to minimize your costs is by using crypto credit cards. Platforms like Crypto.com offer credit cards that allow you to earn cryptocurrency rewards on your purchases. While these cards are not technically a way to buy crypto directly, they do allow you to accumulate crypto over time without the need to make outright purchases.

For example, Crypto.com’s Visa card offers up to 8% cashback in crypto on purchases, and the rewards can be converted into various cryptocurrencies directly within the platform. By using this card for your everyday expenses, you can slowly build up your crypto portfolio at no additional cost, effectively getting your crypto “for free.”

7. Take Advantage of Promotions and Referral Bonuses

Many exchanges offer promotions or referral bonuses that can significantly reduce your costs. For instance, Shakepay often runs promotions where they give you free Bitcoin just for signing up and making your first purchase. Similarly, many platforms offer referral bonuses where both you and the person you refer receive crypto for free.

These promotions are often time-limited but can provide a great way to start building your portfolio without paying full price. Always keep an eye out for these deals and take advantage of them whenever possible.

8. Educate Yourself on Fees and Hidden Costs

Understanding the fee structure of each platform is crucial to minimizing your costs. Some exchanges advertise low trading fees but have hidden costs, such as deposit or withdrawal fees, that can add up quickly. Make sure to read the fine print and calculate the total cost of a transaction before committing.

For example, while NDAX has low trading fees, it charges a 0.5% fee on all CAD withdrawals, which can eat into your profits if you’re not careful. Similarly, some platforms might offer free deposits but charge high withdrawal fees, making it difficult to move your funds without incurring costs. By educating yourself on the full cost of each transaction, you can avoid unexpected fees and keep more of your money in your wallet.

9. Consider Holding Instead of Trading

Frequent trading might seem like a good way to make quick profits, but it can also lead to high fees, especially on platforms that charge per trade. Instead, consider a buy-and-hold strategy, where you purchase your cryptocurrency and hold onto it for a longer period. This not only minimizes your trading fees but also allows you to take advantage of potential long-term gains as the market grows.

Hodling (a term used in the crypto community to describe holding onto your crypto for the long term) can be a cost-effective strategy, particularly if you believe in the long-term potential of your chosen cryptocurrency. By reducing the number of transactions, you save on fees and reduce the risk of making costly mistakes during volatile market conditions.

10. Use Decentralized Exchanges (DEXs) Wisely

Decentralized exchanges (DEXs) offer another low-cost option, especially if you’re dealing with smaller, less mainstream cryptocurrencies. Platforms like Uniswap and Sushiswap allow you to trade directly from your wallet, cutting out intermediaries and often resulting in lower fees.

However, it’s important to note that while DEXs can offer lower fees, they also come with higher risks, such as the potential for slippage and price impact, particularly if you’re trading large amounts. It’s crucial to understand how DEXs work and to use them wisely, particularly if you’re looking to trade less popular altcoins.

Conclusion

Buying cryptocurrency in Canada doesn’t have to be an expensive endeavor. By leveraging P2P exchanges, sticking to Canadian platforms, buying in bulk, timing your purchases, exploring altcoins, and taking advantage of promotions, you can significantly reduce your costs and keep more of your money in your wallet. With the right strategies, you can navigate the crypto market efficiently and profitably, making the most of your investments.

Cryptocurrency is a volatile and rapidly changing market, so staying informed and continuously educating yourself on the latest developments is key to staying ahead. By following these tips, you’ll be well on your way to becoming a savvy crypto investor in Canada.