3 Ways You Can Buy Cryptocurrencies in Your TFSA

With cryptocurrencies offering so much long-term growth potential, finding top crypto stocks to buy in your TFSA could save you tonnes in taxes.

| More on:
crypto, chart, stocks

Image source: Getty Images

After two years of the cryptocurrency industry becoming more popular, and even now, while it’s in the midst of a major sell-off, it’s clear that this new asset class is here to stay. So naturally, investors will be wondering whether they should bother to buy cryptocurrencies and use a TFSA to do so.

Blockchain technology continues to be developed and the solutions and innovations created have tonnes of real-world potential over the long run. So naturally, taking advantage of the major sell-off in these cryptocurrencies and crypto stocks is one of the best ways to invest in 2022.

Because cryptocurrencies have so much growth potential, though, gaining exposure in your TFSA makes a lot of sense. With all the opportunity to grow your capital significantly, investing in your TFSA could end up saving you money in taxes.

It’s crucial to ensure that you’re buying high-quality investments and doing it for the long run, though. TFSA contribution room is valuable, so you don’t want to lose money and therefore contribution room on poor or speculative investments.

In addition, investing for the long run helps to mitigate risk, especially in the highly volatile cryptocurrency industry. So if you’re looking to gain exposure to cryptocurrencies and buy crypto stocks in your TFSA, here are three of the best ways to do so.

A top ETF to buy for Bitcoin exposure

There’s no question that Bitcoin (CRYPTO:BTC) is an excellent long-term investment. There are several catalysts that could cause Bitcoin’s price to continue to grow over the long haul. And because it’s the most popular cryptocurrency with a market cap of more than US$835 billion, there are many ways for investors to gain exposure.

One of the most common and straightforward is to buy a fund like the CI Galaxy Bitcoin ETF (TSX:BTCX.B), which offers investors exposure directly to the price of Bitcoin.

So if Bitcoin’s price doubles over the next year, you can expect the ETF to double over the next year. However, it’s much easier to buy, will likely cost you less in transaction fees than buying the actual Bitcoin, and you never have to worry about losing it.

In addition, over the long run, your returns will likely be higher because any of the gains you make holding the ETF aren’t taxable if you buy the cryptocurrency in your TFSA.

This Ethereum ETF is one of the best cryptocurrencies to buy in your TFSA

Another excellent investment if you’re bullish on cryptocurrencies and blockchain technology is a fund that offers exposure to Ethereum (CRYPTO:ETH), the second-most valuable cryptocurrency. Ethereum offers a lot of potential itself, and for many different reasons than Bitcoin.

Its technology has allowed the creation of several new and innovative products, including several metaverses, play-to-earn video games, NFTs, and much more.

So buying an ETF that offers all the same advantages as the Bitcoin ETF is another excellent way to utilize your TFSA and gain exposure to the high-potential cryptocurrency industry.

A top crypto stock to buy for exposure to the entire industry

Lastly, if you’re bullish on cryptocurrencies but don’t want to buy an investment that only offers exposure to a single coin, Galaxy Digital (TSX:GLXY) is the perfect stock for your TFSA.

Galaxy Digital is a multi-segmented financial services company that’s growing rapidly as the interest in cryptocurrencies grows. Its segments serve retail investors, institutional investors, high-net-worth individuals, and even blockchain and cryptocurrency companies themselves.

In addition, it also has its own cryptocurrency mining segment and offers exposure to several high-potential projects in the space.

So if you’re bullish on cryptocurrencies but want to utilize the power of your TFSA, Galaxy Digital is one of the best crypto stocks to buy now.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Daniel Da Costa owns Bitcoin, Ethereum, and Galaxy Digital Holdings Ltd. The Motley Fool owns and recommends Bitcoin and Ethereum.

More on Investing

question marks written reminders tickets
Tech Stocks

Nvidia’s Historic Stock Split: Will Investors See Bigger Gains?

Nvidia's (NASDAQ:NVDA) record 10:1 stock split entices many investors in several important ways. But some myths aren't technically correct.

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog

Retirees: 2 TSX Dividend Stocks That Have Raised Payouts Annually for Decades

These stocks offer high yields and should continue to raise their payouts.

Read more »

TFSA and coins

5 Canadian Stocks With a Real Chance of Tripling Your TFSA’s Value

TFSA balances can triple in value with five Canadian stocks that have delivered outsized gains in recent years.

Read more »

A worker drinks out of a mug in an office.
Tech Stocks

Want $1 Million in Retirement? 3 Stocks to Buy Now and Hold for Decades

Growth stocks such as Docebo and Celsius Holdings should help you generate outsized gains in the upcoming decade.

Read more »

Hour glass and calendar concept for time slipping away for important appointment date, schedule and deadline
Dividend Stocks

This 8% Dividend Stock Pays Cash Every Month

Earn monthly cash of $154 with this 8% dividend stock.

Read more »

A miner down a mine shaft
Metals and Mining Stocks

Should Investors Buy the Correction in Lundin Mining Stock?

Lundin (TSX:LUN) stock has fallen by 10% in the last few weeks, but so has the price of copper. Coincidence?…

Read more »

Metals and Mining Stocks

Best Stocks to Buy in May 2024: TSX Materials Sector

A TSX materials sector ETF could help investors gain cheap diversified exposure to the hot sector's stocks – so will…

Read more »

man is enthralled with a movie in a theater

Should You Buy Cineplex While it’s Below $9?

With analysts expecting a significant recovery in the second half of 2024, is this the last chance to buy Cineplex…

Read more »