Cryptocurrencies surged during the pandemic as investors pumped stimulus checks into the market. But the entire industry faces an uncertain future now that FTX, one of the largest crypto exchanges, is in bankruptcy and its disgraced founder, Sam Bankman-Fried, is facing a series of regulatory investigations. Another exchange, BlockFi, is in disarray. The US Securities and Exchange Commission (SEC) is also reportedly investigating other major crypto players, Binance and Coinbase, following the collapse of FTX. The result was massive price pressure on bitcoin and other cryptocurrencies such as ethereum. The price of bitcoin 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 of bitcoin and other cryptocurrencies. Speaking at a shawarma shop in London, Ont. 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 give Canadians better money and financial products. Not only that, but it can also allow Canadians to opt out of inflation by being able to participate in cryptocurrencies. It’s time for Canadians to take back control of their money,” he said. Pierre Poilievre pays for his order in bitcoin at Tahini’s Mediterranean restaurant in London, Ont. in March 2022. (Pierre Poilievre/Twitter) During his bid for the Conservative leadership, Poilievre’s campaign said he wanted to promote “a new, decentralized, bottom-up economy” by creating a more permissive regulatory environment for cryptocurrencies. He said he would work with the provinces and territories to iron out a “cobweb of conflicting rules” governing products like bitcoin and blockchain. Poilievre also said he wants cryptocurrencies to be treated like gold and other commodities for tax purposes. And the Conservative leader has put his money where his mouth is. According to the federal ethics commissioner’s filing, Poilievre had an investment in bitcoin since May 4. He declared an ownership stake in the Purpose bitcoin exchange-traded fund (ETF), an investment that closely tracks the price of bitcoin.
“Terrible advice”
Bitcoin is trading at around US$16,500 — nearly 75 percent lower than its November 2021 value. This means that if you invested $10,000 in bitcoin this time last year, you would have just $2,500 left from that initial investment – a staggering loss of value for any financial product. If Poilievre still owns a piece of the bitcoin ETF, his investment will be worth 60% less than it traded for in May when he first disclosed the holding. 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 is calling on Poilievre to “apologise” for boosting a product that cost some investors dearly. When confronted by Conservative claims that the Liberals’ huge deficit budgets have fueled high inflation, Freeland countered by arguing that Poilievre can’t be trusted with the country’s money since he’s promoting a product that has been weighed down. “Let’s talk about some really terrible advice offered to Canadians this spring by the Conservative leader. He urged Canadians to invest in crypto as a way to opt out of inflation. Now, bitcoin has crashed 21 percent in the past week and by more than 65 per cent since the Conservative leader first gave Canadians this reckless advice,” Freeland said in question period on Monday. “The 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, Freeland says
Conservatives should apologize for ‘reckless’ crypto advice: Freeland
Deputy Prime Minister Chrystia Freeland says cryptocurrency investment advice would have bankrupted Canadians Not everyone is bankrupted by crypto. An investor who dumped cash into bitcoin in the early days of the pandemic — and has held that position until now — would actually have made a profit. Earlier investors fared even better. And crypto could see a rebound — bitcoin went through a similar crisis during the “big crypto” of 2018, only to rise in the years to come. Regardless, Poilievre has been silent on the matter since prices began to fall. He has not made any other crypto-related podcast appearances. In February, Poilievre was a guest on a show hosted by a bitcoin trader who compared central bank policies to slavery. Poilievre told the show’s host, Robert Breedlove, that he and his wife watch his YouTube channel “late at night.” “I find it extremely informative 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 enjoyed and learned a lot about bitcoin and other monetary matters from listening to you.” An advertisement for bitcoin is displayed on a street in Hong Kong on February 17, 2022. (Kin Cheung/AP Photo) Mariam Humayun is an assistant professor of marketing at the University of Ottawa and an expert on bitcoin and cryptocurrencies. He said some “people in the bitcoin space are very, very skeptical” of politicians “jumping on the bandwagon.” “They’re using some buzzwords to sound innovative, but they’re not doing their due diligence on what they’re actually advocating,” he said. “They project their politics on bitcoin when this technology is really an apolitical thing.” Humayun said some industry types view politicians like Poilievre as “fair-weather cronies” who are all-in on the product when prices are high but disappear when there’s a rough update. “There are a lot of people who have been affected and lost their savings, unfortunately. Social media has overcharged some of these things. There will be a huge toll on the ecosystem,” he said of the crypto environment following the FTX collapse.
“He’s not naive”
JP Lewis is a professor of political science at the University of New Brunswick Saint John and author of Project: Conservative Parties and Their Impact on Canadian Politics. Lewis said Poilievre is touting crypto in part to appeal to a certain segment of the Conservative membership and win the leadership. “A lot of leadership candidates say things to appeal to the base. He was targeting a very specific type of Conservative voter with that encryption pitch. I would say, based on Poilievre’s style, it would be very strange for him to back down. He’s just going to talk about it less,” Lewis said. “He’s a political actor at his core. He knew full well what going on those YouTube talk shows would do for that brand. There were benefits and risks. He’s not naive.” Pierre Poilievre holds a leadership campaign in Toronto, Saturday, April 30, 2022. During this campaign, Poilievre presented bitcoin as a way for Canadians to “opt out” of inflation. (Chris Young/Canadian Press) Some right-leaning and liberal-minded investors have championed cryptocurrencies — a financial instrument that is loosely regulated in the Western world — as a way to reduce government control over money because the supply of token cryptocurrencies is not set by an authority like the Bank of Canada or the Federal Reserve Bank of the United States. With its supply limited to just 21 million tokens, bitcoin boosters insist the cryptocurrency is a hedge against inflation at a time when central banks are pursuing policies that reduce the cash’s value. Some of these right-wing investors have adopted the label “cryptobro,” a sometimes pejorative term for people who are dogmatic about crypto and its potential to change the world of finance. “The question is whether there will be any political impact with a voter in the general election. Will the Liberals be able to stick Poilievre with bitcoin, with the convoy, with the theories of the World Economic Forum and will it resonate with moderate or non-partisan voters who do elections decide?” said Louis. “This is an old liberal playbook – scare tactics. We don’t know how effective it will be.”
