Now, I'm not the type to write about crypto related news. However, if it's something that relates to Canadians and I believe that it's worth sharing, then I'm all over it (after all, that's why I created Crypto For Canadians).
Having said that, I came across a post about a week ago (I know, I'm a bit late to the party) that Wealthsimple, a Canadian online investment management service focused on millennials, just created a waitlist for people to start investing in crypto. At the moment, only Bitcoin and Ethereum are offered. This can be seen from Wealthsimple's website:
Upon scrolling down their homepage, they have a FAQ section which you can see here:
According to their FAQ, you're not really buying, holding, or selling Bitcoin or Ethereum within Wealthsimple's app as deposits and withdrawals are all in Canadian dollars. This means that you can't deposit Bitcoin or Ethereum to trade on their platform unlike with a regular crypto exchange.
So what you're really doing is betting that Bitcoin or Ethereum's price will increase. As the information is limited, it doesn't say if you can only take long positions or if you're able to short it as well.
Now you may be thinking that regardless of that, it can still be a good option to put in a registered account (Tax Free Savings Account or your Registered Retirement Savings Plan). However, it also looks like the cryptocurrencies can only be held in a non-registered account. This means that any profits or losses will realize a taxable event. This gain or loss may be treated as capital gains or business income depending on different factors: the frequency of your trades, how long you hold the crypto for, the amount of time you spend on trading and researching, and how significant the income from trading is relative to your other income.
Another thing that I would like to highlight is the fine print at the bottom.
Wealthsimple Crypto is made available through the Wealthsimple Trade app, but is offered by Wealthsimple Digital Assets Inc., a virtual currency dealer money services business authorized by FINTRAC. Wealthsimple Crypto is currently not registered as a securities adviser or securities dealer. Cryptocurrencies purchased and held in an account with Wealthsimple Crypto are not protected by CIPF, the Canadian Deposit Insurance Corporation or any other investor protection insurance scheme. Any information about Wealthsimple Crypto, platform, emails, or other communications, are for informational purposes and not intended as a solicitation or advertisement for Wealthsimple Crypto.
From the fine print, they're basically saying that the crypto is not insured by any federal agency. This potentially means that if they lose it, investors may potentially feel the brunt of that. However, they do state that their coins are held by Gemini Trust Company (founded and run by the Winklevoss twins) which does add some credibility and trust to them. But as the saying goes, "Not your keys? Not your coins."
Despite all of what I had just stated though, I still think that this is positive news for the crypto space as it's bringing more awareness and legitimizing crypto currency as an asset class. This may be a good option for those who have been thinking about getting into crypto but don't want the responsibility of holding their coins. Or this may be a good nudge for people who know nothing about crypto to start exploring other options and to diversifying their holdings.
For myself however, I think I would rather just buy, hold, and sell the coins on a spot market though as I'm
Here's a video about them:
How about yourself? Will you be opening up an account with Wealthsimple for their crypto offerings?
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