Crypto is property, not currency
For tax purposes the CRA treats cryptocurrency as a commodity, not as money. That single fact drives everything: disposing of crypto is like disposing of any capital property, so it can create a capital gain or loss measured against your adjusted cost base.
For most individual investors, crypto gains are capital gains — only the taxable portion is included in income. But frequent, business-like trading can be taxed as business income, which is fully taxable. How your activity is characterized depends on your facts; this is a question for you and your accountant.
Every trade, swap, and spend is a disposition
A taxable disposition is not just cashing out to dollars. Each of these realizes a gain or loss:
- Selling crypto for fiat (e.g. Bitcoin → CAD) — the obvious one.
- Trading one crypto for another (e.g. BTC → ETH) — a disposition of the coin you gave up, at its fair market value in Canadian dollars at the time.
- Spending crypto on goods or services — a disposition at the value of what you bought.
- Converting to a stablecoin — still a crypto-to-crypto disposition.
Pooled cost base, just like stocks
The CRA requires the same pooled average-cost method for crypto as for shares. Identical coins are pooled and the cost averaged; each disposition uses that pooled ACB per unit. If you buy Bitcoin across several exchanges and wallets, it is one pool, not many.
The superficial loss rule also applies: sell a coin at a loss and rebuy the identical coin within 30 days and the loss is denied and added to the rebuy’s cost base.
What records you need
Because value is measured in Canadian dollars at the time of each transaction, you need the date, type, quantity, and CAD value of every buy, sell, swap, and spend — across every wallet and exchange. With hundreds of transactions this is where manual tracking breaks down, and where pooling errors and missed swaps creep in.