Beginning this month, folks will start using the new Wealthsimple Crypto platform to buy and sell cryptocurrency. It’s pretty exciting if you happen to be into crypto, Wealthsimple, or were thinking about getting familiar with either of those things. But you probably have a few questions before you sign up. So we spoke with Danish Ajmeri, the product manager for Wealthsimple Crypto, about how it all works.
And even what crypto is in the first place.
So just to start out really straightforward: I can buy and sell cryptocurrency with Wealthsimple?
Yes, very soon you’ll be able to buy and sell Bitcoin and Ethereum — the two largest cryptocurrencies — with Wealthsimple Crypto.
How do I do it? With the Wealthsimple Trade App?
Yes! And no! You have to open a new, dedicated Wealthsimple Crypto account. But your crypto account lives inside the Wealthsimple Trade app, so you only need to download one app to buy and sell stocks, ETFs and crypto.
If you buy and sell both stocks and crypto, you can just toggle back and forth between your Wealthsimple Crypto account where you can buy Bitcoin and Ethereum, and your Wealthsimple Trade account where you hold stocks and ETFs.
Can anyone use Wealthsimple Crypto?
Not yet. First you have to sign up for a spot on the waitlist. Then we’ll begin letting people in from the waitlist in the next few weeks.
Why are we doing it that way? We’re just launching and we want to ramp up slowly at first, to make sure everything works the way we want it to.
Can I move up the waitlist?
Yep. You can move up the waitlist by referring people who also sign up for the waitlist. The more people you refer, the more you move up.
So when I’m using Wealthsimple Crypto, what commission do you charge?
I feel like you already knew the answer to this. The commission is zero. And we don’t charge any of the fees that other exchanges typically charge — like deposit and withdrawal fees.
So how do you make money?
When you buy or sell you’ll see a price spread: the current price of the crypto you’re buying and a slightly higher total transaction price. The difference between those two prices (the spread) includes the cost to our custodian, the liquidity providers, and Wealthsimple’s fee.
It’s simple because it’s all-in-one pricing — there are no extra fees, like a commission, on top of that. And we never charge fees for deposits or withdrawals.
Great. I’m ready to go. But wait, one thing I forgot: what’s crypto? And does it matter if I don’t completely understand it?
Well you don’t have to know how Bitcoin mining works or the mechanics of blockchain technology, which is the concept that underpins crypto. But we think it’s important to know what you’re investing in. That’s our advice across the board, whether you’re talking stocks or real estate. Otherwise you’re just throwing darts at a board blindfolded. The short answer to your question is that cryptocurrency is a digital asset that operates outside of any government. There are lots of crypto currencies — the most popular of them are, as we mentioned, Bitcoin and Ethereum.
Like other assets or currencies, crypto gets its value from how much people think it’s worth (and what its purchasing power is) on the open market. It’s kind of like a stock that way — how much it’s worth depends on what people are willing to pay for it.
So you must obviously think it’s a good thing to invest in, otherwise you wouldn’t have made Wealthsimple Crypto so people can buy and sell it.
Our advice hasn’t changed: the smartest way to grow your money long term is with a diversified, low-cost portfolio that tracks the market. (If that sounds good, we suggest you check out Wealthsimple Invest.) But a smart, holistic financial plan can also leave room to take a risk on things you believe in. We made a simple, efficient and safe way to buy and sell cryptocurrency because it’s something our clients are interested in.
There are lots of reasons people buy crypto. Because it’s a cool bit of technology and they believe in it, which is a good reason. Because there’s a lot of hype around it, which is a less good reason. There are people who see Bitcoin as a valuable hedge against other currencies like the U.S. dollar. Unlike other currencies it’s unattached to any government and its monetary policies, so can be seen as a safe harbour if central banks make mistakes that hurt their currencies — like keeping interest rates too high or too low or printing too much money. We don’t have an opinion one way or another about that. We just give you a no-commission way to buy it once you decide you want to.
I hear a lot about people stealing crypto currency or losing it. How do I know my crypto won’t just disappear from my computer one day
Our custodian for your cryptocurrency is Gemini Custody — one of the most trusted names in crypto, with the highest U.S. government security rating — who will keep your investment safe. It’s also insured — because Gemini also has $200M in cold storage insurance — until you want to sell it.
It works a lot like buying a stock. When you buy a share of Amazon through a brokerage or trading platform, they don’t send you a stock certificate. They hold it until you want to sell it. We do the same thing with crypto. Gemini, our custody partner, keeps your crypto until you want to sell it.
So once I buy crypto on the app, can I then use it to purchase a pizza or, say, an exotic pet on the dark web? (Please note: buying exotic pets is awful and that’s a joke.)
No, you can’t use the cryptocurrency you buy on Wealthsimple Crypto like money. It’s strictly an investment. You buy it, we hold it for you, and when you’re ready to sell it, we sell it for you.
How do I know the price I’m getting is good?
We work with a market maker that works across multiple exchanges to get you a low price. The difference between crypto and stocks is that stocks are usually listed on only one exchange. If you want Amazon stock, you have to buy it on the NASDAQ.
With crypto there are multiple exchanges, so it’s important to shop across them for the best price.
OK that all sounds great. But you guys are software people. What’s cool about this software?
First, it’s designed to be simple. You don’t need to be an expert in cryptocurrency or blockchain to use this platform. It’s geared toward anyone who’s interested in learning more or dipping their toes into crypto trading. And doing it in a secure way. It’s all incredibly clear, simple, and yes, no commission. If you wanted something complicated with cool special effects, you’d watch an Avengers movie.
Wealthsimple uses technology and smart, friendly humans to help you grow and manage your money. Invest, save, trade, and even do your taxes in a better, simpler way.