How to Buy Ethereum in Canada: A Step-by-Step Tutorial

How to buy Ethereum in Canada is essential knowledge for investors looking to capitalize on one of the largest cryptocurrencies, with a market cap of CA$385B and daily trading volumes of CA$19.9B.

A survey conducted by OSC in 2023 revealed a 23% decrease in crypto ownership in Canada. Still, current market conditions and Ethereum’s developing ecosystem rank Ether among the top cryptocurrencies by market cap. With the Pectra Upgrade coming up, renewed interest could be seen in Ethereum.

This article presents a simple and accessible guide for investors who want to buy Ethereum on Coinbase or Kraken.

Step-by-step guide to buying Ethereum on Coinbase

Here’s a breakdown of how to buy Ethereum on both Kraken and Coinbase:

Buy Ethereum (ETH) on Coinbase:

1. Create an account:
   • Download the Coinbase app or visit the website. Start the sign-up process.
   • Have a valid ID and proof of address ready for verification (may take some time).
   • Provide your email address and create a strong password.
2. Add a payment method:
   • Tap on the payment method section and choose your preferred method (bank account, debit card, wire transfer).
   • Follow the prompts to connect your chosen payment method.

N.B: Canadian customers can add cash (CAD) to their Coinbase account using Interac e-transfer or EFT bank transfer. To do so, they must first complete full onboarding, including identity and mobile phone verification.

3. Initiate a trade:
   • On Coinbase.com, select “Buy & Sell.” On the app, tap the “+” Buy button on the Home tab.

4. Select Ethereum:

• On Coinbase.com, click the “Buy” panel and search for “Ethereum.” On the app, type “Ethereum” in the search bar and tap it once it appears.

5. Enter the purchase amount to buy Ethereum:

The app will automatically convert this to Ethereum. You can also switch between displaying the amount in your local currency and displaying it in Ethereum.

N.B. You can choose from multiple funding options: credit or debit card, wire transfer, e-transfer, or in-person at Canada Post. 

6. Finalize the purchase:

• Review the details of your purchase by tapping “Preview buy.”
• If everything looks correct, confirm your purchase by tapping “Buy now.”

7. Congratulations!

• Once your order is processed, you’ll see a confirmation screen. You’ve successfully purchased Ethereum!
  

A step-by-step guide to buying Ethereum on Kraken

Kraken is a reputable cryptocurrency exchange. Below is how you can buy ETH on the regulated exchange:

1. Create a free account:
   • Visit Kraken’s website.
   • Provide your email address and choose your country of residence.
   • Follow the prompts to create a secure password.
2. Connect a funding method:
   • Navigate to the “Funding” section and choose your preferred method (bank transfer, credit card, Google Pay, Apple Pay, etc.).
   • Follow the instructions to connect your chosen payment method to your Kraken account.
3. Complete your Ethereum purchase:
   • Once your funding method is connected, navigate to the “Markets” section.
   • Search for “ETH” (Ethereum) and choose the appropriate trading pair (e.g., CAD/ETH).

• Select a buy order type (market order for immediate purchase, limit order for a specific price).
• Enter the amount of Ethereum you want to buy (or the amount in CAD you want to spend).

• Review the order details, confirm your purchase, and buy Ethereum.

4. Success!

• Upon successful order execution, your Ethereum will be credited to your Kraken account.

Remember:

• These are simplified guides. Refer to the platform’s specific instructions for detailed steps.
• Fees and verification processes may vary for each platform. Check their websites for current information.

Choosing the right platform: Kraken vs. Coinbase in Canada

When deciding between Kraken and Coinbase to buy Ethereum in Canada, it’s essential to consider factors such as fees, security, features, and ease of use. Here’s a comparison of the two platforms:

Payment Methods Comparison: Coinbase vs. Kraken  (Canadian Customers)

Feature	Coinbase	Kraken
Domestic Wire Transfer	Available	Available
In-person Cash or Debit	Available	Available
Interac e-Transfer	Available	Available
Other Currencies
Wire Transfer (InterFIN)	Available	Available
SWIFT (Bank Frick)	Available	Available
SWIFT (Etana Custody)	Available	Available
Payment method features
Interac e-Transfer	Buy, Sell, Add Cash, Cash Out	Buy, Sell, Add Cash, Cash Out
EFT Bank Transfer	Buy, Sell, Add Cash, Cash Out	Buy, Sell, Add Cash, Cash Out
3D Secure Card	Buy, Sell	Buy, Sell
PayPal	Buy, Sell, Cash Out	Buy, Sell, Cash Out
Processing time
Interac e-Transfer	Up to 5 minutes	Up to 5 minutes
EFT Bank Transfer	[1] business day	[1] business day
3D Secure Card	Instant	Instant
PayPal	[1] business day	[1] business day

Note: The availability of specific payment methods and their associated fees may vary depending on your location and account type. You should always check the latest information directly with Coinbase and Kraken.

Fees

Feature	Kraken	Coinbase
Trading fees	Maker-taker fees starting at 0.26%	Maker-taker fees starting at 0.50%
Deposit fees	Varies by method (e.g., bank transfer, credit card)	Varies by method (e.g., bank transfer, credit card)
Withdrawal fees	Varies by cryptocurrency and withdrawal method	Varies by cryptocurrency and withdrawal method

Note: Fees can change over time. Check the latest fee schedules on both platforms before making a decision.

Features

Feature	Kraken	Coinbase
Supported cryptocurrencies	Wide range of cryptocurrencies	Extensive selection of cryptocurrencies
Advanced trading tools	Suitable for experienced traders	User-friendly interface for beginners
Staking	Offers staking for various cryptocurrencies	Limited staking options
Margin trading	Available for experienced traders	Available for experienced traders

Ultimately, the best platform to buy Ethereum will depend on your individual needs and preferences. If you’re a beginner looking for a simple and intuitive platform, Coinbase might be a better choice. Kraken could be more suitable if you’re an experienced trader seeking advanced features and lower fees.

Nevertheless, it is crucial to be well-informed about the specific regulations that oversee the Canadian cryptocurrency market before engaging with any platform – and we will cover that in the following section.

Looking for more info on Coinbase and Kraken? See our Kraken vs Coinbase review.

Canadian securities regulations for crypto trading platforms explained

In Canada, crypto asset trading platforms must comply with securities laws enforced by the Canadian Securities Administrators (CSA). Whether operating domestically or abroad, these platforms must be registered with a Canadian securities regulator to provide services to Canadians legally.

The CSA strongly advises that individuals use only those platforms that are registered and authorized to conduct business in Canada.

An example of such a platform is Coinbase Canada Inc., which is duly registered as a money services business with FINTRAC (#M22815925) and as a Restricted Dealer with the Ontario Securities Commission and the securities regulators in all provinces and territories of Canada.

Kraken has been registered with FINTRAC as a money services business since 2019 and is undergoing the process of becoming a Restricted Dealer across all Canadian provinces.

This move ensures compliance with securities laws and further reinforces its commitment to the Canadian market. This step requires Kraken to adapt its offerings to meet regulatory standards, safeguarding the interests of Canadian users.

Note: A single federal framework does not govern securities regulation in Canada; rather, each province has its own regulatory body. The CSA acts as an overarching body that coordinates regulatory efforts across provinces. For example, Quebec’s Autorité des marchés financiers (AMF) and Ontario’s Securities Commission (OSC) follow CSA guidelines regarding crypto assets.

If a crypto asset is classified as a security, it must adhere to the province’s securities laws, ensuring transparency and investor protection across the market.

Tax implications of buying Ethereum in Canada

Cryptocurrency transactions in Canada are subject to tax. The primary tax implication for individuals holding Ethereum is capital gains tax, which is applied when you sell your Ethereum for a profit.

The capital gains tax rate depends on your overall income level. However, it’s generally 50% of the capital gain, meaning you pay half of the profit in taxes. If you’re in a higher tax bracket, your effective tax rate on capital gains might be higher.

It’s crucial to keep accurate records of your Ethereum transactions, including purchase prices, sale prices, and any fees incurred in Canadian dollars. This documentation will be essential for calculating and reporting your capital gains to the Canada Revenue Agency (CRA).

Key tax considerations:

• Reporting requirements: You must report any capital gains or losses from cryptocurrency transactions on your income tax return.
• Record-keeping: Maintain detailed records of your Ethereum transactions, including purchase dates, sale dates, quantities, and costs.
• Cryptocurrency exchanges: Some cryptocurrency exchanges may provide tax reporting tools or assistance.
• Professional advice: Consult a tax professional for guidance if you have significant cryptocurrency holdings or complex transactions.

Note: Tax laws can change, so it’s essential to stay updated on the latest regulations and consult a tax expert for personalized advice.

What is Ethereum (ETH)?

Ethereum is a decentralized, open-source blockchain system with its native cryptocurrency, Ether (ETH). Launched in 2015, Ethereum quickly became one of the most important platforms for decentralized applications (dApps) and smart contracts. Created by Vitalik Buterin, Ethereum raised $18.3 million in its initial coin offering (ICO) in 2014, selling over 60 million Ether at $0.311 each.

Today, Ethereum is worth over CA$3,180. Since its launch, it has boasted an annualized return on investment (ROI) of over 270%, making it an attractive option for investors.

Ethereum has undergone multiple upgrades, including notable ones like the “Constantinople” and “London” hard forks, improving network efficiency and scalability. 

The platform’s ultimate goal is to serve as a global platform for decentralized applications on the Ethereum Network, providing censorship-resistant, fraud-proof solutions. Ethereum is a leader in blockchain innovation, offering more than just a cryptocurrency—it supports a robust ecosystem that hosts thousands of dApps, tokens, and decentralized finance (DeFi) projects.

Ethereum 2.0: Shifting to proof of stake

Ethereum 2.0 represented a significant network architecture shift, primarily focusing on scalability, energy efficiency, and security. This transformation began with the launch of the Beacon Chain in 2020, which introduced a proof of stake {PoS} consensus mechanism, replacing the older PoW system where mining was required.

PoS allows validators to secure the network by staking their ETH, reducing the energy consumption traditionally required by mining.

The March 2024 Dencun upgrade introduced data blobs to further optimize transaction costs on layer-2 networks, although it reduced Ethereum’s layer-1 fee revenue. Ethereum 2.0 has a profound impact. It offers faster, cheaper transactions and a greener footprint, making it a better platform for DeFi, dApps, and NFTs.

Ethereum spot ETFs

Ethereum has seen several noteworthy developments reinforcing its position in the crypto ecosystem, especially in Canada. One of the most significant advancements is the introduction of Ethereum exchange-traded funds (ETFs).

Canada has embraced the Ethereum Network by launching its second staked ETH ETF by Ether Capital and 3iQ. These ETFs allow investors to stake their Ether and earn rewards while enjoying the transparency and liquidity of traditional ETFs.

Writer’s note: Kraken has embraced bonded staking, offering Canadian clients up to 6% APR through Kraken Pro. These innovations shape Ethereum’s future, making it more accessible and rewarding for Canadian investors.

Other ways to buy Ethereum

1. Centralized exchanges: While Coinbase and Kraken are popular choices, other centralized exchanges offer diverse trading options for Ethereum (ETH).
2. Decentralized exchanges (Uniswap, Sushiswap): For a more decentralized approach, consider using platforms like Uniswap or Sushiswap to trade Ethereum. These DEXs operate on the Ethereum blockchain, allowing you to swap ETH directly from your crypto wallet. While DEXs can provide greater control over your funds, they may involve a steeper learning curve and potentially higher transaction fees.

3. Staking pools (Lido, Rocket Pool): Staking your ETH can earn you rewards, but it requires a minimum of 32 ETH. Staking pools like Lido and Rocket Pool allow you to stake smaller amounts of ETH by pooling your funds with others. These pools handle the technical aspects of staking on your behalf.

4. ETH-based tokens (AAVE, MakerDAO): Some projects on the Ethereum network offer tokens that can be used to participate in their ecosystem. For example, AAVE token holders can borrow and lend assets using the AAVE protocol. MakerDAO token holders can participate in the governance of the DAI stablecoin.

Where is ETH heading in 2024?

Ethereum’s future price movement is subject to significant risks and promising opportunities. One of the major challenges is Ethereum’s declining revenue on its layer-1 network, which has dropped 99% since March 2024. 

Following the Dencun upgrade, the shift in transaction activity to layer-2 (L2) networks has reduced fees and lower revenue for Ethereum’s base layer. L2 networks like Coinbase’s Base, which generated CA$3.3M in revenue in August while only paying CA$15000 to Ethereum’s mainnet, underline this shift. 

Crypto experts caution that if L2 networks continue to thrive, Ethereum risks facing a valuation problem and losing dominance unless it can innovate with new use cases for digital assets on its Mainnet.

On the flip side, Ethereum’s recovery from recent price drops, alongside the possibility of Ethereum ETFs, provides optimism. The approval of ETFs could bring significant capital inflows over time, boosting Ethereum’s market position.

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