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If you are a young, Canadian investor looking to invest in crypto, it’s likely that the Wealthsimple Crypto product is on your short list of crypto exchanges to get started with.
As the company readily advertises that it does not charge commissions or fees for deposits or withdrawals, it sometimes gets reported that Wealthsimple Crypto is free.
But is that true, is Wealthsimple Crypto really free?
Wealthsimple Crypto is not free. The platform charges a 1.5% – 2% operational fee for each transaction. This is assessed as a spread on the bid and ask price on which buy and sell orders are executed.
So while these operational fees aren’t much, they’re definitely something to be aware of.
Read on to find out about Wealthsimple’s crypto fees as well as a breakdown on how Wealthsimple Crypto makes money.
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Is Wealthsimple Crypto Really Free?
Wealthsimple Crypto is not free, but they don’t claim to be either.
Wealthsimple is very upfront and honest about how they charge a 1.5% – 2% operational fee when a client purchases or sells crypto on their platform.
When researching Wealthsimple Crypto fees, I went straight to the source and asked Wealthsimple themselves. I spoke with a Wealthsimple Customer support employee named Issac.
Me – Yes, I was wondering if Wealthsimple Crypto was free? And if not, what are the fees?
Issac (Wealthsimple) – Great question, happy to help! There is a 1.5-2% operational fee that is charged on each buy, and each sell order. Outside of that, there are no fees associated with trading and holding Crypto with Wealthsimple.
Me – So it just takes a 1.5% – 2% fee on my purchase? For example, if I but $1000 worth of bitcoin, the fee will be $15-$20?
Issac (Wealthsimple) –Yes thats correct. The same math applies to the sell orders as well. During the order placing workflow, there is a order summary which displays the fees. This is displayed prior to placing an order!
So now you should know that Wealthsimple Crypto is not free. While it costs no money to do most things on the platform (which will talk about in the next section), we now know, thanks to Issac, that Wealthsimple charges a 1.5% – 2% fee to the buyer and seller when they make a transaction.
In the next section, I’ll give a detailed (with screenshots) look at how these fees are calculated on the Wealthsimple Crypto platform.
I should also mention, if you did want to create a Wealthsimple Crypto account, by getting started here – you’ll get $25 for signing up. Pretty sweet hey!
How To Calculate Wealthsimple Crypto Fees?
The only fee that Wealthsimple Crypto charges its clients is an operational fee. Depending on the type of coin you are buying or selling, Wealthsimple will charge a 1.5% – 2% fee on your purchase.
As you can see from my screenshot above, while I’m buying $10 worth of bitcoin, I’m only actually receiving $9.85.
And on the contrary, when I’m looking to sell $10 worth of bitcoin, Wealthsimple will look to sell $10.15 worth of my bitcoin and then charge me $0.15 for the transaction. So at the end of the day, I will still be getting $10 back in bitcoin, but I’ll have sold off $10.15 worth of it.
So long story long, when selling your crypto, you’ll sell slightly more then the amount you requested to sell in order to account for the operational fee. And when purchasing crypto, you’ll receive slightly less crypto than your purchase amount.
It’s also important to note that these operational fees are the only fees assessed on Wealthsimple Crypto and Wealthsimple states that this fee is used to cover their expenses for using their third-party custodian company – Gemini, as well as their cost of doing business.
So while Wealthsimple Crypto does have this operational cost to buying crypto on their platform, the platform is free from common fees such as:
- Account opening/closing fees
- Deposits/Withdrawals via bank ETF transfer
- Electronic statements and trade confirmations
- Inactivity fees
How Does Wealthsimple Crypto Make Money?
With extremely low fees, you may be wondering how Wealthsimple Crypto makes money. Which is a very valid question.
And quite frankly, this was a question I was wondering too – so I asked Wealthsimple. One of the main things I was wondering was if Wealthsimple made money off our cash by investing it like banks do.
Me – Does Wealthsimple Crypto make money any other way? Like does it use our cash to invest low yield investments?
Issac (Wealthsimple) –Revenue for Wealthsimple Trade and Crypto is primarily generated from the 1.5% currency conversion (Stocks and ETFs) and 1.5-2% operational fee on Crypto. Other than that, there are subscription fees associated with our subscription offerings, and some cost associated with executing voluntary election (stocks specific). We do not derive a revenue from the cash sitting in your account.
So here’s the thing.
If you have a Wealthsimple Crypto account, you already know that it is integrated with Wealthsimple Trade. In other words, you use the same platform when investing in stocks as you do with crypto, and that application is called Wealthsimple Trade.
And Wealthsimple Trade makes money from their Wealthsimple Plus subscription service and their currency conversion fees.
But that’s not all. As of this writing, Wealthsimple has 5 products. And as I talk about in my article, 4 Ways Wealthsimple Makes Money (From Each Product), 4 out of the 5 of their products generate revenue for Wealthsimple.
It’s important to realize that Wealthsimple as a company is trying to provide the best possible suite of investment products to Canadian investors at a low price.
And while I have no idea what the percentages of revenue are and what products and profitable are which aren’t, but the point is, Wealthsimple has multiple streams of income to support their business and don’t rely on just one product.
Is Trading Crypto on Wealthsimple Safe?
Fun fact, Gemini is a company that was founded by the Winklevoss brothers. These were the twins who went to Harvard and apparently had their idea of Facebook stolen from them by Mark Zuckerberg.
Gemini has $200 million in cold storage protection for the crypto assets it manages. Therefore, unless you hold a crypto position approaching nine figures, your investment should be safe even if Gemini’s digital assets are breached.
As a final note, it is important to remember that trading crypto is not necessarily a “safe” practice in terms of guaranteed returns. It is a highly volatile sector with huge risk/reward potential and it’s not given any type of bank-level deposit guarantees.
However, in terms of Wealthsimple’s data protection and crypto indexing structure, it is a perfectly safe way of getting in on the crypto action.
Is Wealthsimple Crypto Free: Everything You Need to Know
Wealthsimple Crypto is not free, as the platform charges a 1.5% – 2% operations fee that is calculated when you buy and sell crypto on the platform. But with that said, the company does not charge any commission or minimum activity fees for its crypto account holders, which makes it an overall affordable way to trade crypto in Canada.
I should also mentioned that I am not speaking blindly here, as I stated earlier in the article, I’ve been using Wealthsimple Crypto since 2021 and I really enjoy it. As a big time beginner in crypto, (and I still kind of am) all I knew was that I wanted to get my feet wet – the Wealthsimple Crypto product provided me with the perfect solution to do so.
The sign up process is quick and easy, they have low fees, and the modern user interface provides just an overall great experience, which is why I’m still using it.
And will leave it there, as always, I really hope you found this article helpful. Come back for more whenever you’d like. Will be here.