The Crypto Outlook for Canada in 2024

he new year of 2024, the story that undeniably dominated crypto circles has been the approval of the Bitcoin spot ETF by the SEC in the United States. It was the culmination of over a decade of effort and has put the industry’s eyes on the United States yet again.

But what about its neighbours to the North? While the United States is the epicentre of crypto activity in North America, Canada could be gearing up for an interesting year when it comes to crypto. From new regulations to possible competition, this is what Canada’s crypto year could look like.

Adoption 

2024 could be a significant year for crypto adoption within Canada. The country has previously seen a healthy ranking when it comes to crypto use but several factors could further increase this. First, there is the aforementioned ETF and the ways that it is predicted to raise the value of many tokens. If cryptos are more valuable then more people are bound to use them, even in Canada.

Then there is the issue of crypto ATMs. According to a recent report from Coin ATM Radar, while the number of crypto ATMs in the world has shrunk overall, Canada has seen an increase in them. Between December 1, 2023, and January 16, 2024, the number of crypto ATMs in Canada has gone from 801 to 820. This growth of crypto ATMs would imply that the demand for crypto is at a healthy rate in Canada. And for Canadians who don’t yet use cryptocurrency, this means that there are more options to do so than before. 

Canada also has an abundance of crypto use cases that citizens can opt for. Take gambling, which has very complicated regulations in Canada. In some provinces, gambling is fully legal and there are establishments licensed by the government. In others, there are no such freedoms. In response to this, many Canadians opt to visit online gambling sites based outside of their province and country. In the last few years, many of these sites have begun accepting cryptocurrency for placing bets (source: https://cryptonews.com/news/best-bitcoin-casinos.htm). In 2024, we could see more Canadians use crypto for this purpose, especially as it becomes more available and profitable. 

The Effects of the ETF 

The crypto outlook for any country in 2024 cannot be talked about without mentioning the Bitcoin spot ETF that was recently approved in the United States. While Canada is not directly affected, it will still feel the impact. First, the ETF is predicted to cause a chain reaction that will lead to Bitcoin and other cryptos having their values increase. This means that Canadian crypto users could possibly make a profit on the cryptos they own.

People all over the world will likely invest more in cryptocurrency thanks to the effects of the ETF and Canada will be no different. We also need to consider how America’s ETF will affect Canada’s. You see, Canada has had spot Bitcoin ETFs available for consumers since 2021 and as of this article, about 20 are in the market. While the US has only just broken this barrier, Canada already had this option for investors. 

But now, there is speculation that the spot Bitcoin ETFs launched in the US could compete with those in Canada. The biggest issue appears to be the price; spot Bitcoin ETFs in the US have a price advantage over many other Bitcoin investment vehicles and many investors might opt for it over those of say, Canada. This then puts pressure on Canadian firms that offer spot Bitcoin ETFs to lower their prices to remain competitive. At least one crypto investment fund in the US had announced a price cut in the week following the spot ETF approval and only time will tell if Canadians will follow suit.

Thus far, the ETF seems to be having a double effect on Canada which is that while it has made crypto more profitable for everyone (Canadians included), it has also made the crypto investment market more competitive. For now, only time will tell what the long-term effects will be.

Regulatory Developments

Besides the ripple effects of the spot Bitcoin ETF, 2024 is also shaping up to be a big year in terms of crypto regulations in Canada. The progress of crypto as a whole means that more countries are putting effort into developing proper laws for the industry and Canada is no different. Take the country’s primary banking regulator, the Office of the Superintendent of Financial Institutions (OSFI). In late 2023, the OSFI began consultations with banks regarding cryptocurrency exposure. These consultations not only sought to get a better insight into the risk associated with cryptocurrency but also on how better reporting and disclosure could benefit consumers. Comments are due by January 31, 2024. 

On top of this, the OSFI has been seeking consultations from international banks. All these are leading up to the publication of draft guidelines by the office sometime in the fall of 2024 and more concrete rules by next year. This could be a major step in better regulation of crypto use in Canada for the benefit of citizens.

Another notable development we could be seeing in 2024 is with regard to the Canadian Central Bank Digital Currency, the Digital Canadian Dollar. Late last year, the Central Bank of Canada published a report on its feedback from stakeholders regarding the Digital Canadian Dollar. It found that Canadians wanted a digital dollar that doesn’t add to financial instability and is easily accessible. In 2024, the Bank intends to engage with more stakeholders on privacy, accessibility, financial stability, and others. From all indications, the Central Bank of Canada is listening to consumers’ needs and wants to meet them. 

As Senior Deputy Governor Carolyn Rogers has said, “The way people pay for things and use money is changing. If Canadians decide a digital dollar is necessary, our obligation is to be ready.”

Conclusion 

From all indications, 2024 is shaping up to be an exciting year for the crypto sector. We are hot off the heels of the ETF approval, several exciting projects should be off the ground soon, and regulatory progress is being made all over the world. Canada is not being left out of these developments and from its own regulations to crypto adoption, 2024 will be a big year for the Canadian crypto sector. 

Some of these are an after-effect of general industry changes and some are due to the domestic efforts in Canada but all make for an exciting year to come.