People interested in investing in digital currency may be attracted by the fact that, unlike traditional investments that are held by a bank or broker, cryptocurrencies can empower them to be custodians of their wealth.istock.com
More than a decade after bitcoin’s invention under the assumed pseudonym of Satoshi Nakamoto, cryptocurrencies continue to capture the interest – and dollars – of investors in Canada and around the world. Between 2018 and 2020, according to Statista, the number of cryptocurrency accounts increased by 37 per cent while the global user base of these digital assets grew by almost 190 per cent.
This was merely a precursor of what was yet to come. When COVID-19 struck last year, many Canadians worried about their financial futures turned to crypto.
“After the pandemic hit and the stock market had that big correction in March of 2020, there was a lot of money coming out of the traditional system, and people were coming to companies like us,” recalls Jordan Anderson, chief operating officer at Bitbuy Technologies, a Toronto-based digital platform for Canadians who want to buy, trade and invest in bitcoin and other cryptocurrencies.
“People were concerned about the monetary policies introduced by the Canadian government and were looking for a hedge against the future,” says Mr. Anderson. “Investing in cryptocurrencies was one of the responses to these concerns.”
Jordan Anderson“ Many people who invest in cryptocurrency look at it as their own insurance against the traditional financial system, and no one can control crypto except the people who buy and sell it because it’s connected to a global blockchain that has the consensus of everyone in the chain.
Chief Operating Officer at Bitbuy Technologies
But it isn’t just anxiety about the future that’s driving the growing interest in cryptocurrency. As consumers and investors read more about digital coin, they’re learning that, unlike traditional investments that are held by a bank or broker, cryptocurrencies empower people to be custodians of their wealth.
This also gives them the ability to trade and move their digital assets across platforms.
“It’s a whole new financial ecosystem,” says Mr. Anderson. “Clients can be their own bank and choose to hold bitcoin on a USB stick and store it in a safe at their house, so if there’s some sort of issue like a run on the bank, their bitcoin is safe.
“Many people who invest in cryptocurrency look at it as their own insurance against the traditional financial system, and no one can control crypto except the people who buy and sell it because it’s connected to a global blockchain that has the consensus of everyone in the chain.”
Today’s cryptocurrency investors are no longer typified by millennials with a little bit of play money. Mr. Anderson says Bitbuy customers range in age from early 20s to over 65 and vary in income levels.
“We get a lot of doctors, lawyers, dentists and more mature, affluent people investing in this asset, versus two years ago, when it was mostly younger folk,” he says. “So we have account directors who work directly with these customers, first of all to make sure they know what they’re doing and to understand their risk tolerance. We’ve gone from 15 staff members to 60 to support the influx of clients coming in.”
Recognizing cryptocurrency’s potential to be used for nefarious purposes – such as to launder money from criminal proceeds or to finance terrorist activities – Bitbuy also spends a lot of time on due diligence before accepting significant amounts of money, says Mr. Anderson.
This due diligence involves, among other things, determining the source and location of the funds, what percentage of a customer’s net worth the funds account for, and what types of coins a customer is looking to buy.
“If we see anything suspicious, we file with FINTRAC,” says Mr. Anderson, referring to the Financial Transactions and Reports Analysis Centre of Canada, a Canadian agency that helps identify and prevent money laundering and financing of terrorist activities.
While its due diligence is comprehensive, Bitbuy’s approach to cryptocurrency trading and investing is simple: create an account, add funds from your bank account via e-transfer or wire, and you’re ready to buy and sell. Mr. Anderson notes that Bitbuy offers access to only the top seven coins in the world, based on market capitalization.
“The industry has really grown up, and Canadians’ understanding of cryptocurrency has grown along with it,” says Mr. Anderson. “This is the future, and Bitbuy is part of building that future.”
Advertising feature produced by Randall Anthony Communications. The Globe’s editorial department was not involved.