Wealthsimple Crypto Review: Should you use it?

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The Wealthsimple Crypto feature is available through the Wealthsimple Trade app and here is everything you need to know about Wealthsimple Crypto.

What is Wealthsimple Crypto?

Wealthsimple Crypto is a commission-free self-directed cryptocurrency trading platform offered by Wealthsimple. Users can buy, sell or hold cryptocurrencies through the platform. Like other Wealthsimple products, it features no account minimum balance, no fee on deposit or withdrawal, and commission-free trading.

The service is available through the Wealthsimple Trade app on iOS and Android devices. The access is provided to the user through a unique crypto account within the Wealthsimple trading app. A user can transfer Canadian dollars to the crypto account from their registered bank account and can use the fund to buy 20 different types of coins including Bitcoin, Ethereum 24/7. Crypto-assets purchased using Wealthsimple Crypto can only be held in a non-registered account.

These are the key features offered by Wealthsimple Crypto:

  • Simple signup process
  • No account minimum balance
  • No account opening/closing fee
  • $0 commission fees
  • 24/7 availability
  • No fees to deposit or withdraw via Bank Transfer (EFT)
  • Free e-statement and trade confirmation
  • No fee for Inactive Accounts

What assets are supported on Wealthsimple Crypto?

Currently, Wealthsimple Crypto supports 58 cryptocurrencies as listed below.

  • 0x (ZRX)
  • 1 inch (1INCH)
  • Aave (AAVE)
  • ApeCoin (APE)
  • Amp (AMP)
  • Ankr (ANKR)
  • Avalanche (AVAX)
  • Axie Infinity (AXS)
  • Balancer (BAL)
  • Bancor (BNT)
  • Band (BAND)
  • Basic Attention Token (BAT)
  • Bitcoin (BTC)
  • Bitcoin Cash (BCH)
  • Cardano (ADA)
  • Cartesi (CTSI)
  • Celo (CELO)
  • Chainlink (LINK)
  • Chiliz (CHZ)
  • Chromia (CHR)
  • Compound (COMP)
  • Cosmos (ATOM)
  • Curve (CRV)
  • Dai (DAI)
  • Decentraland (MANA)
  • Dogecoin (DOGE)
  • dYdX (DYDX)
  • Enjin (ENJ)
  • Ethereum (ETH)
  • Fantom (FTM)
  • Filecoin (FIL)
  • Gala (GALA)
  • The Graph (GRT)
  • Hedera (HBAR)
  • Kyber Network (KNC)
  • Litecoin (LTC)
  • Loopring (LRC)
  • Maker (MKR)
  • NEAR Protocol (NEAR)
  • Pax Gold (PAXG)
  • Polkadot (DOT)
  • Polygon (MATIC)
  • Quant (QNT)
  • Ren (REN)
  • Sandbox (SAND)
  • Shiba Inu (SHIB)
  • Skale (SKL)
  • Solana (SOL)
  • Stellar (XLM)
  • Storj (STORJ)
  • SushiSwap (SUSHI)
  • Synthetix (SNX)
  • Tezos (XTZ)
  • Uma (UMA)
  • Uniswap (UNI)
  • USD Coin (USDC)
  • Yearn Finance (YFI)

Wealthsimple has indicated to make more cryptocurrencies available in the future through the platform.

Where are the cash deposits held for Wealthsimple Crypto?

To buy or sell crypto assets using Wealthsimple Crypto, you need to open a separate account with ShareOwner. The process of opening the ShareOwner account is straight forward and the Wealthsimple Trade app will guide you through the step-by-step process during Crypto account registration. All the cash funds will be held under your ShareOwner account.

When you place a purchase order using Wealthsimple Crypto, Wealthsimple will request the cash from your ShareOwner account to fund your purchase. Similarly, after selling a crypto asset, the fund will be transferred to your ShareOwner account.

How does Wealthsimple make money from Wealthsimple Crypto?

Wealthsimple Crypto makes money from the price spread. When you submit a purchase or sell order, you will see two prices - the current price of the crypto-asset and a slightly higher transaction price. The difference between these two prices is known as the spread (typically between 1.5%-2%) and includes the cost to custodian Gemini Inc., the liquidity providers, and the operational overhead for Wealthsimple.

How to open a Wealthsimple Crypto account?

Wealthsimple Crypto is in its early stage and is being rolled out to Canadians. You can join Wealthsimple crypto by opening an account online. If you are an existing user of the Wealthsimple Trade app, most likely you have already got an invite from Wealthsimple to join crypto.

Follow the instructions on your email from Wealthsimple or simply log in to your Wealthsimple Trade account and you will be able to see an option for Crypto. Select the crypto option to initiate the registration process.

You need to sign your account agreements to fund and trade in your Crypto account. This includes agreements for the new ShareOwner account and WS Trade Crypto Account.

How to buy cryptocurrency using Wealthsimple Crypto?

After successful registration to the Wealthsimple Crypto account, you should be able to switch between your Trade and Crypto investment accounts. Selecting the Crypto account will bring the Crypto trading screen where you can see the current and historical price trends.

To buy a crypto asset, you can select the desired asset from the list of available cryptocurrencies. This will bring up the current price and historical price details (up to the last 5 years) of the selected crypto-asset. You can select the buy option to start purchasing crypto-asset. Enter the Canadian dollar amount that you wish to invest and select continue to submit the purchase request. You can also check the buy/sell price in this window to find out the spread.

Once the purchase order is fulfilled, you will be able to track the crypto-asset in the main dashboard.

What are the fees associated with Wealthsimple Crypto?

Wealthsimple Crypto is a free-to-use app and does not charge any fee for the account. However, Wealthsimple charges a small trading fee by applying a spread on the bid and ask prices. These trading spreads are displayed in the Trade app while placing a buy or sell order and are typically between 1.5%-2%. Wealthsimple does not charge any fee for account opening, closing, or inactivity and account deposits and withdrawals.

Who is Wealthsimple?

Founded in September 2014 by Michael Katchen, Wealthsimple is a Toronto-based online investment management service provider primarily focused on Canadian millennials. Wealthsimple strive to offer a smart, simple, commission-free, and easy-to-use platform to help Canadians invest. They offer a range of financial tools like a high-interest cash account, robo-advisor, self-directed investment portfolio, etc.

Is Wealthsimple Crypto safe?

Wealthsimple has farmed out custodial duties to U.S based Gemini Inc. to keep your crypto-assets safe. Gemini custodial service is heavily regulated by the New York State Department of Financial Services. They have a great track record and maintain a $200 million commercial criminal insurance policy to protect against the theft of Cryptocurrency. However, their policy does not protect your account in the event of any loss due to unauthorized access. So, take extra measures like enabling two-factor authentication on your account.

Wealthsimple Crypto is made available to Canadians by WDA, coordinated through the Canadian Securities Administrators' Regulatory Sandbox under time-limited registration and regulatory approach. Wealthsimple Digital Assets Inc. is registered as a restricted dealer in Canada (except in Québec). It is essential to note that, crypto-assets purchased and held in a Wealthsimple Crypto account are not protected by the Canadian Deposit Insurance Corporate (CDIC) or Canadian Investor Protection Fund (CIPF).

Is Wealthsimple Crypto right for you?

Wealthsimple Crypto offers a great commission-free trading platform for cryptocurrencies. However, that does not mean you should jump on to crypto trading. Wealthsimple Crypto is a self-directed platform, which means that you will be in charge of all trading decisions and no one will be available to provide investment/trading advice.

You should also understand that cryptocurrency trading is extremely risky and you should trade with the money that you are prepared to lose. The crypto-asset market is extremely volatile and most of the time it might not be right for you. You might be better off with traditional investment options like stocks, ETFs, bonds, etc. which have relatively lesser risk (not always) than crypto-trading. You should consider your current financial situation, financial goals, knowledge, and experience in the crypto industry before deciding to start crypto trading. Here you can read more about Wealthsimple Crypto - Product Risk Disclosure.

That being said, if you have some experience in cryptocurrency trading and you fully understand and acknowledge the risks associated with it, Wealthsimple Crypto is a great option. It has made the process of crypto-asset trading very simple for Canadians. The traditional methods of cryptocurrency trading involve a high minimum balance requirement (typically between $2000 to $5000), a high transaction fee (typically 6-8% at Bitcoin ATMs), or a high initial investment. All these barriers are addressed by Wealthsimple Crypto where you can start investing commission-free with no minimum transaction limit. But, keep an eye on the price spread since you will lose 1.5%-2% the moment you press the buy button.

Final Thoughts

Wealthsimple has always delivered great services to Canadians by lowering the barrier to entry and providing easy-to-use financial tools (like Wealthsimple Trade, Robo-advisor, or Cash) to get started with investing. The new entry also lives up to the expectation in terms of ease of use and a $0 fee structure.

Though Wealthsmple Crypto has a lot to offer as a financial tool, it is not for everyone due to the volatile nature of digital currencies. Trading in cryptocurrency is a hazardous type of investment, and one should know what they are doing before jumping into it. But, if you believe that cryptocurrency will continue to grow in demand and play a major role in the future, you can take the risk based on your financial stability. But make sure to secure your EMERGENCY FUND and pay all your debts before putting any money in crypto-trading.

Frequently Asked Questions

Can I move my existing coins to or from a Wealthsimple Crypto account?

No. Users can buy, sell or hold coins within the app. All the deposits and withdrawals can be made in Canadian dollars only.

Do I need to be an expert to use Wealthsimple Crypto?

Technically no. Buying and selling crypto-assets using Wealthsimple Crypto is very simple. Since there are no minimums, you can get started with crypto-trading for as little as $1. However, do understand that cryptocurrency trading is very risky and you should only trade with the money that you are prepared to lose.

Can I open a registered account with Wealthsimple Crypto?

No, cryptocurrencies purchased using Wealthsimple Crypto can only be held in a non-registered account. Thus, any capital gain earned from crypto-trading will be subject to taxation.