Is crypto too risky for Canadians? 6 steps to invest more safely

But if you're going to add crypto to your portfolio, there are ways to do it more safely by following these six basic rules.

1. Understand the risks

Before you invest in crypto, you need to understand what you're dealing with. Generally speaking, cryptocurrencies are subject to three key risks: cybersecurity, volatility and fraud.

Cybersecurity

Digital assets are prime targets for cybercriminals and hackers, even though blockchain technology is designed to be highly hack-resistant. For example, Bitcoin uses a double SHA-256 hashing scheme, and its network has never been successfully hacked.

The real vulnerability tends to be third-party platforms like exchanges and wallets. That's where most breaches happen, including the aforementioned Bybit hack.

Volatility

Cryptocurrencies are more volatile than mainstream asset classes, meaning that the price of bitcoin swings more wildly than stocks, bonds, or real estate.

According to BlackRock's iShares research, bitcoin's annualized volatility is approximately 54% (3), compared with about 15% for gold and 11% for global equities. Put simply, bitcoin's price can vary greatly from its long-term average, with gains and losses of 20% or more in a single week not unusual.

Fraud

The risk of being scammed by malicious creators or developers is real for crypto investors. Fraudulent projects and "rug pulls" — where developers abandon a project and abscond with investors' funds — remain a threat.

You can defend yourself against these practices by sticking with well-established cryptocurrencies and regulated platforms.

2. Follow reputable sources

Once you understand the major risks, the next step is filtering out the noise. There's no shortage of opinions in the crypto space, but not all of them are worth your attention. Focus on credible, well-known sources. For example, Ethereum founder Vitalik Buterin's updates are a reliable way to track developments on that network. Platforms like Bitcoin.org (4), Binance Academy (5), and Cointelegraph (6) can also help you stay informed.

If you're investing from Canada, make the Canadian Securities Administrators (CSA) website part of your routine. It maintains a current list of registered and banned crypto platforms (7), which is one of the simplest ways to protect yourself.

3. Focus on mainstream assets

Not all crypto is created equal. Newer coins tend to be more volatile and susceptible to fraud. On the other hand, established cryptocurrencies with long track records are generally more stable.

Bitcoin (BTC-USD) is a good example. It's been around for over 16 years, and at this point, the odds of it being a scam are extremely low. Other mainstream coins like Ether (ETH-USD) and Solana (SOL-USD) are generally less risky than newer niche cryptos backed by anonymous developers.

I should mention stablecoins here. While assets like Tether are designed to maintain a steady value, Canada's regulatory framework for stablecoins is still evolving. New federal stablecoin legislation is expected in 2026 (8), and the CSA currently requires any new stablecoin issuer operating in Canada to file a prospectus. Until the rules are clearer, approach stablecoins with caution and use only those available through a CIRO-registered platform.

4. Use the right tools and best practices

Crypto security isn't just about what you buy — it's also about how you store and protect it. For larger holdings, many investors choose to move assets off exchanges and store them in a hardware wallet, like a Ledger device. If you're just getting started, though, staying on a regulated platform, where assets are held in trust, may be the more practical option.

Account security is just as important. SMS-based two-factor authentication (2FA) is no longer considered sufficient due to SIM-swap scams (9). A better approach is to use an FIDO2-compliant hardware security key, like a YubiKey, or biometric authentication.

You should also avoid clicking suspicious links in emails or text messages to avoid phishing scams, and only use platforms registered with the CSA or CIRO (10). Unregistered platforms pose significant risks, and you may not be protected if something goes wrong.

Find the best platform for your needs. Read our full review of the top Canadian crypto exchanges to compare fees, security features, and available coins.

5. Start small

This is one of the simplest, yet most overlooked rules. Crypto becomes harder to manage as your portfolio grows. More assets, more platforms, more potential security risks.