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Wealthsimple Crypto review
Money.ca / Wealthsimple
Updated: January 30, 2024
As cryptocurrency’s popularity rises, many financial companies have started to respond by offering consumers cryptocurrency trading platforms. One such company in Canada is Wealthsimple. Known primarily as a robo investment management firm, the company has recently introduced Wealthsimple Crypto for clients who want to buy and sell Bitcoin and Ethereum. If you’ve been bitten by the Bitcoin bug and are thinking of trading in digital currency, read on to see if Wealthsimple Crypto is right for you.
What is Wealthsimple Crypto?
When it was launched in the summer of 2020, Wealthsimple Crypto was the first crypto asset platform to be registered with Canadian securities regulators. Wealthsimple Crypto can be accessed through the Wealthsimple Trade app and it functions as an entirely self-directed platform where you can buy and sell Bitcoin and Ethereum – the world’s two largest cryptocurrencies – instantly and without commission fees. Wealthsimple Crypto aims to make buying and selling cryptocurrencies as easy and straightforward as possible so that even a newbie investor can give it a go.
What does Wealthsimple Crypto offer?
Wealthsimple offers an accessible way to buy and trade Bitcoin and Ethereum, 24/7. To keep things simple, you can’t buy any other kinds of digital currencies other than Bitcoin and Ethereum for now. Wealthsimple does plan to offer more cryptocurrencies in the future. You can get started with as little as $1 because there is no account minimum and no fees for making deposits or withdrawals.
While Wealthsimple Crypto does offer commission-free buying and selling, they do charge a 1.5-2% operations fee per transaction. The fee is applied as a spread when you buy or sell a currency.
Pros and cons of Wealthsimple Crypto
Pros
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No commission, no fee minimum balance, and no fees for transferring funds
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Convenient and high usability because you can access your account on a computer or mobile phone
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User-friendly website
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Easy to sign up
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You can transfer money from some other Wealthsimple accounts to your Wealthsimple Crypto account
Cons
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The spread (between 1.5%-2%), also known as the operating fees, could result in high fees if you buy and sell frequently
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Can only invest in two currencies
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No educational or investing resources on the app
How to apply
If you don’t already have an account, you’ll need to download the Wealthsimple Trade app (available for both Android and iOS). WS Crypto shares the WS Trade app platform.
If you already have a Wealthsimple Trade account, opening a Wealthsimple Crypto account is very easy. You’ll just need to open your WS Trade account and select the WS Crypto option.
You will then be asked questions about your investing experience, such as whether or not you’ve ever invested in cryptocurrencies, if you’ve ever sold stocks on your own, and how much money you feel comfortable risking.
Wealthsimple then explains a bit about how Wealthsimple Crypto works. You’ll then be asked to confirm you know about the risks of buying and selling cryptocurrency.
You will need to sign three more lengthy disclosure statements. Finally, you’ll need to add funds to your account.
Depending on how much you add and whether or not you already have a Wealthsimple account (because it’s very easy to transfer funds between most Wealthsimple accounts and Wealthsimple Crypto) that was already funded, money could take up to five days to arrive in your account. In my case, because I chose a small amount of money ($40) to transfer, the transfer of funds took only about 30 minutes. Once your funds arrive you are ready to buy and sell crypto!
How does buying crypto with Wealthsimple work?
Once you’ve applied, you can buy and sell Bitcoin and Ethereum within minutes after you’ve funded your account. The price of each digital asset is clearly marked, as is the amount you have in your Wealthsimple Crypto account. Let’s break it down step-by-step to see how it works.
After downloading the app, you can fund your account and select one of the cryptocurrencies.
To make a purchase, just tap on which currency you’re interested in buying to see an up-to-date price and then hit the ‘Buy’ button.
Input a dollar amount for how much you want to buy.
Confirm your purchase. Note that Wealthsimple Crypto does not allow you to download your digital asset into a private digital wallet. Rather, your digital currency is held by an outside crypto custodian (Gemini) on behalf of Wealthsimple.
Wealthsimple Crypto features
To be frank, Wealthsimple Crypto doesn’t have a lot of extra features. The two main selling points are that it’s low cost and accessible and it’s designed to be as bare-bones as possible with no bells and whistles. Having said that, it does pretty much have all you need if all you want to do is buy and sell Bitcoin and Ethereum, including:
- Website: An easy-to-navigate website with the current selling price of Bitcoin and Ethereum with a clear graphic that shows the ups and downs of the digital currency’s value.
- Menu: There’s a menu on the app so you can easily move between your Wealthsimple Trade account and your Wealthsimple Crypto account.
- Funding: You can see your previous deposits, withdrawals, purchases, and selling activity.
- Support: The support via the app is minimal, with access to a Help Center where you can see a list of the most frequently asked questions. There is also a chat function for more direct help. You can access other support outside the app by calling Wealthsimple directly or by emailing them.
- Money Transfers: You can easily transfer money from outside bank accounts to your Wealthsimple Crypto account.
- Account Type: Your Crypto account can only be held in unregistered accounts (no TFSAs or RRSPs).
Usability and interface
Wealthsimple Crypto is incredibly easy to use. Though initially Wealthsimple Trade and Wealthsimple Crypto were only accessible via an app (available for both Android and iOS), you can now view all of your Wealthsimple accounts online via computer. The no-frills interface with bold graphics is simple and straightforward, allowing you to execute buys and trades easily and in seconds with just a couple of steps.
Costs and fees
While Wealthsimple Crypto is indeed commission-free, there is a fee for buying and trading a digital currency. While one could not go as far as to say this fee is hidden, Wealthsimple certainly does not make it obvious and you do have to do a bit of hunting to find information about it. Wealthsimple Crypto charges a 1.5-2% fee for every buy and sell transaction you make. The fee is charged by applying a spread on the bid and ask prices at which you buy and sell the digital currency. A spread is the difference between the buy (bid) and sell (offer) price of a currency.
For example, if I want to buy $40 worth of Bitcoin, my $40 will only buy $39.41 worth of Bitcoin. The spread (operational cost) here is $0.59.
Aside from this fee, there are no other costs. Wealthsimple Crypto does not charge any fees for account opening or closing, inactive accounts, fund transfers or electronic statements of trade confirmations.
Is Wealthsimple Crypto safe?
When it comes to investing or transferring money online or through apps, it’s natural to raise a skeptical eyebrow. You don’t need to worry about your money’s safety when it comes to Wealthsimple. While no one can guarantee the long or short term outcome of your investments in crypto due to it being a volatile market, Wealthsimple does keep the money you’ve invested safe.
All crypto coins are held by Gemini Custody, a U.S. regulated crypto custodian. Wealthsimple only accesses your cryptocurrency held at Gemini to settle sell transactions that you initiate. Gemini has $200M in cold storage insurance coverage.
It’s important to note that cryptocurrencies are not insured by the traditional institutions Canadian Investor Protection Fund or the Canada Deposit Insurance Corporation. You can only hold your investments in cryptocurrency within the app itself; you can’t actually transfer or move your crypto assets to a personal/private digital wallet.
How it compares
The options for Canadian investors who want to buy crypto keep growing. However, if you’re interested in investing in crypto but are turned off by the asset’s legendary volatility and don’t feel comfortable buying and trading on your own, you might want to consider buying an exchange-traded fund (ETF) that lets you invest in Bitcoin without having to buy and store the digital currency yourself. Purpose Investments’ Bitcoin ETF, BTCC, is the first Bitcoin ETF in the country and does all the buying and selling of the digital asset for you, so you can be a passive Bitcoin investor. You can purchase the ETF from an online brokerage platform like Questrade, which offers a host of other investment options at very affordable fees. There are also Ethereum ETFs recently approved in Canada that can be traded in the same way. Best of all, unlike by buying cryptocurrency directly, you could hold the ETF in a TSFA or RRSP account to offset taxes.
Who should apply for Wealthsimple Crypto?
There’s no doubt that investing in cryptocurrency can be an exciting ride. If you’re considering investing in digital currencies and you’re new or just starting out in crypto investments, then Wealthsimple Crypto is a good choice. It’s ideal for new investors since you won’t be overwhelmed by choice (since you only have to deal with two cryptocurrencies). It also offers a no-frills, easy-to-manage platform that won’t have you left feeling lost or confused. On the other hand, f you’re already quite comfortable or having a lot of experience investing in crypto, then you might find Wealthsimple Crypto a little too basic for you.
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