What is Bitcoin?
Bitcoin is the origin of blockchain technology and the first cryptocurrency, introduced to the world in 2009 by an anonymous founder, Satoshi Nakamoto. Bitcoin’s White Paper, “Bitcoin: A Peer-to-Peer Electronic Cash System” still serves as inspiration for the crypto community. Fast forward to 2021 and Bitcoin still maintains its #1 crypto market ranking.
Bitcoin isn’t minted by a central bank; instead, its supply is dictated by “miners,” other computers in the network that create bitcoin by getting their computer to solve hard math puzzles. If you’ve got a powerful enough computer, you can “mine” for bitcoin.
Bitcoin is governed by a self-regulated community of developers. After Nakamoto put forward the idea for Bitcoin, a team of (non-anonymous) developers continued work on it and further its development. In 2011, the Bitcoin Foundation was started, headed by Gavin Andresen, Jon Matonis, Patrick Murck, Charlie Schrem, and Peter Vessenes. Many still work on it today and as an open source project, anyone can jump in to work on the Bitcoin protocol.
Bitcoin used be worth almost nothing, but the last few years have seen high spikes and significant price volatility. At the end of June 2021, Bitcoin’s price was hovering around $40,000.
Before trading any crypto assets it is important to understand the risks. This overview is a starting point for you to perform your own research prior to investing in a crypto asset.
No securities regulatory authority or regulator in Canada has evaluated or endorsed the Crypto Contracts or any of the crypto assets made available through the platform.
Wealthsimple has performed an assessment of whether BTC can be supported by Wealthsimple’s platform, including whether BTC is a security and/or a derivative and is being offered in compliance with securities and derivatives laws.
We evaluated Bitcoin based on publicly available information, including (but not limited to):
- The creation, governance, usage and design of Bitcoin, including the source code, security and roadmap for growth in the developer community and, if applicable, the background of the developer(s) that first created Bitcoin;
- The supply, demand, maturity, utility and liquidity of Bitcoin;
- Material technical risks associated with Bitcoin, including any code defects, security breaches and other threats concerning the Bitcoin blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them;
- Legal and regulatory risks associated with Bitcoin, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of BTC; and
- Statements made by regulators or securities regulatory authorities in Canada and other jurisdictions regarding whether BTC, or generally about whether the type of crypto asset, is a security and/or a derivative.
Wealthsimple monitors ongoing developments related to crypto assets available on its platform for significant changes that may affect Wealthsimple’s original assessment of those assets, including Wealthsimple’s assessment of the application of securities and derivatives laws. Any significant changes relating to BTC may result in changes to this Crypto Asset Statement and/or Wealthsimple’s ability to support BTC.
Like all other crypto assets, there are some general risks to investing in BTC. These include short history risk, volatility risk, liquidity risk, demand risk, forking risk, cryptography risk, regulatory risk, concentration risk, electronic trading risk and cyber security risk. Please review the Wealthsimple Crypto Product Risk Disclosure for additional discussion of general risks associated with the crypto assets made available through the platform.
We emphasize that this Crypto Asset Statement is not exhaustive of all risks associated with trading BTC. Investors should perform their own assessment to determine the appropriate level of risk for their personal circumstances.
Wealthsimple is offering Crypto Contracts in reliance on a prospectus exemption contained in the exemptive relief decision Re Wealthsimple Investments Inc. dated December 18, 2023 (the Decision).
The statutory rights of action for damages and rescission in section 130.1 of the Securities Act (Ontario), and, if applicable, similar statutory rights under securities legislation of other jurisdictions of Canada, do not apply in respect of this Crypto Asset Statement to the extent a Crypto Contract is distributed under the prospectus relief in the Decision.
Last updated: January 1, 2024