As cryptocurrency prices plunge and some of the exchanges they trade on pause withdrawals, the federal Liberal government is eager to remind voters that Conservative Leader Pierre Poilievre once touted the asset class as a means of “exiting” from inflation.
Cryptocurrencies surged during the pandemic as investors pumped stimulus checks into the market. But the whole industry faces an uncertain future now that FTX, one of the biggest crypto exchanges, is bankrupt and its disgraced founder, Sam Bankman-Fried, faces a series of regulatory probes. .
Another exchange, BlockFi, is in disarray. The United States Securities and Exchange Commission (SEC) is also Reportedly Investigated Other Major Crypto PlayersBinance and Coinbase, following the FTX implosion.
The result has been massive price pressure on bitcoin and other cryptocurrencies like Ethereum.
Bitcoin price is a fraction of what it was when Poilievre announced in March his plan to make Canada the “blockchain capital of the world” – a reference to the system that records transactions in bitcoins and other cryptocurrencies.
Speaking at a shawarma store in London, Ontario. which accepts bitcoin as payment, Poilievre told voters earlier this year that “Canada needs less financial control for politicians and bankers and more financial freedom for the people.”
“Choice and competition can provide Canadians with better money and financial products. Not only that, but it can also allow Canadians to opt out of inflation with the option of opting into cryptocurrencies. It’s time for Canadians to take back control of their money. ,” he said.
During his run for the Conservative leadership, Poilievre’s campaign said he wanted to foster “a new bottom-up, decentralized economy” by creating a more permissive regulatory environment for crypto.
He said he would work with provinces and territories to eliminate a “cobweb of conflicting rules” that governs products like bitcoin and blockchain. Poilievre also said he wants crypto to be treated like gold and other commodities for tax purposes.
And the Conservative leader has put his money where he talks.
According a filing by the Federal Ethics CommissionerPoilievre had held an investment in bitcoin since May 4. He declared a stake in the exchange-traded fund (ETF) Purpose bitcoin, an investment that closely tracks the price of bitcoin.
Bitcoin is trading at around US$16,500, almost 75% below its value in November 2021.
This means that if you invested $10,000 in bitcoin this time last year, you would be left with only $2,500 of that initial investment – a staggering loss in value for any financial product.
If Poilievre still owns a share of the bitcoin ETF, his investment would be worth 60% less than what it traded for in May, when he first disclosed holding it.
Poilievre’s office did not respond to a request for comment on his current Bitcoin ownership.
As the crypto chaos continues, Finance Minister Chrystia Freeland called on Poilievre to “apologize” for boosting a product that cost some investors dearly.
Faced with Tory claims that the Liberals’ massive deficit budgets have fueled sky-high inflation, Freeland hit back by saying Poilievre can’t be trusted with the country’s money after he touted a product that plummeted.
“Let’s talk about some really terrible advice that was offered to Canadians in the spring by the Conservative leader. He urged Canadians to invest in crypto as a way to get out of inflation. Now bitcoin has crashed from 21% over the past week and more than 65% since the Conservative leader first gave this reckless advice to Canadians,” Freeland said during Question Period Monday.
“Conservatives should apologize today for this reckless policy and admit that investing in crypto would have bankrupted Canadians.”
WATCH: Conservatives should apologize for “reckless” crypto advice, says Freeland
Not everyone has been bankrupted by crypto. An investor who poured money into bitcoin at the start of the pandemic – and has held that position until now – would actually be sitting on a payout. Previous investors have fared even better.
And crypto could see a rebound – bitcoin went through a similar slump during the “great crypto crash” of 2018, only to rise in subsequent years.
Regardless, Poilievre has remained silent on the matter since prices began to crash. He no longer made appearances on crypto-themed podcasts.
In February, Poilievre was a guest on a show hosted by a bitcoin trader who likened central bank policies to slavery.
Poilievre told show host Robert Breedlove that he and his wife watch his YouTube channel “late into the night”.
“I find it extremely educational and my wife and I have been known to watch YouTube and your channel late at night after we put the kids to bed,” Poilievre said. “And I’ve always loved that and learned a lot about bitcoin and other monetary issues from listening to you.”
Mariam Humayun is an assistant professor of marketing at the University of Ottawa and an expert in bitcoin and cryptocurrency.
She said some “people in the bitcoin space are very, very skeptical” of politicians who “jump on the bandwagon.”
“They use a few buzzwords to sound innovative, but they don’t do their due diligence on what they’re actually supporting,” she said. “They are projecting their politics onto bitcoin when this technology is really an apolitical thing.”
Humayun said some types in the industry see politicians like Poilievre as “good weather friends” who are all about the product when prices are high but disappear when there’s a tough time.
“There are a lot of people who have been affected and they have unfortunately lost their life savings. Social media has supercharged some of these things. There will be a huge accountability for the ecosystem,” she told about FTX’s post-collapse crypto environment. .
“He is not naive”
JP Lewis is a professor of political science at the University of New Brunswick in Saint John and author of The Blueprint: Conservative Parties and Their Impact on Canadian Politics.
Lewis said Poilievre touted crypto in part to attract a certain segment of conservative membership and gain leadership.
“A lot of leadership candidates say things to please the base. He was addressing a very specific kind of conservative voter with this crypto talk. I would say, based on Poilievre’s style, it would be very surprising if he backed down. He’ll talk less about it,” Lewis said.
“He’s a political operator at heart. He knew full well what those YouTube talk shows would do for this brand. There were benefits and there were risks. He’s not naive.”
A number of right-wing and libertarian-minded investors have championed cryptocurrency – a loosely regulated financial instrument in the Western world – as a way to reduce government control over money, as the supply of tokens cryptocurrency is not defined by any authority like the Bank of Canada or the US Federal Reserve.
With its supply limited to just 21 million tokens, bitcoin boosters insist the cryptocurrency is an inflation hedge at a time when central banks are pursuing policies that dilute the value of money.
Some of these right-wing investors have embraced the label “cryptobro,” a sometimes derogatory term for people dogmatic about crypto and its potential to change the world of finance.
“The question is whether there will be political ramifications with a voter in the general election. Will the Liberals be able to stick Poilievre with bitcoin, with the convoywith the World Economic Forum theories, and will it resonate with moderate or non-partisan voters who decide elections?” Lewis said.
“It’s an old liberal playbook – scare tactics. We don’t know how effective it will be.”