As the crypto chaos continues, Liberals remind voters of Poilievre’s praise for bitcoin
With cryptocurrency prices plunging 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 referred to the asset class as a way to “opt out” of inflation.
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 probes.
Another exchange, BlockFi, is in disarray. The US Securities and Exchange Commission (SEC) is also investigating other major crypto players, Binance and Coinbase, following the FTX implosion.
The result has been massive price pressure on bitcoin and other cryptocurrencies such as ethereum.
The price of bitcoin is a fraction of what it was when Poilievre in March announced his plan to make Canada the “blockchain capital of the world” — a reference to the system that records bitcoin and other cryptocurrency transactions.
Talking in 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 with the option to choose 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 wants to promote “a new, decentralized, bottom-up economy” by creating a more permissive regulatory environment for crypto.
He said he would work with the provinces and territories to eliminate a “cobweb of conflicting rules” governing 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 his mouth is.
According to a federal ethics commissioner’s filing, Poilievre held an investment in bitcoin as of May 4. He declared a stake in the Purpose bitcoin exchange-traded fund (ETF), an investment that closely follows the price of bitcoin.
“Terrible Advice”
Bitcoin is trading at roughly $16,500 – nearly 75 percent lower than its November 2021 value.
That means if you invested $10,000 in bitcoin at this time last year, you would only have $2,500 left on your initial investment – an eye-popping loss of value for any financial product.
If Poilievre still owns part of the bitcoin ETF, his investment would be worth 60 percent less than what it was trading for in May, when he first disclosed his holdings.
Poilievre’s office did not respond to a request for comment about his current bitcoin ownership.
As the crypto chaos continues, Finance Minister Chrystia Freeland has called on Poilievre to “apologize” for boosting a product that has cost some investors dearly.
When faced with conservative claims that massive Liberal deficit budgets have fueled skyrocketing inflation, Freeland has hit back by arguing that Poilievre cannot be trusted with the country’s money after claiming a product that has declined.
“Let’s talk about some truly 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 counting than 65 per cent since the Conservative leader first gave Canadians the reckless advice, Freeland said during question period on Monday.
“The Conservatives should apologize today for this reckless policy and admit that investing in crypto would have bankrupted Canadians.”
SEE: The Conservatives should apologize for “reckless” crypto advice, says Freeland
Deputy Prime Minister Chrystia Freeland says advice to invest in cryptocurrency would have bankrupted Canadians
Not everyone has been bankrupted by crypto. An investor who poured money into bitcoin in the early days of the pandemic — and held that position until now — would actually have a gain. Previous investors have fared even better.
And crypto could see a rebound — bitcoin went through a similar crisis during the “great crypto crash” of 2018, only to rally in subsequent years.
In any case, Poilievre has been silent on the matter since prices began to crater. He has not made any further appearances on crypto-themed podcasts.
In February, Poilievre was a guest on a show hosted by a bitcoin trader who has compared central bank policy to slavery.
Poilievre told the 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 into the night once we get the kids to bed,” Poilievre said. “And I’ve always enjoyed it, and I’ve learned a lot about bitcoin and other money matters from listening to you.”
Mariam Humayun is an assistant professor of marketing at the University of Ottawa and an expert on bitcoin and cryptocurrency.
She said some “people in the bitcoin space are very, very skeptical” of politicians “jumping on the bandwagon.”
“They use a few buzzwords to sound innovative, but they don’t do due diligence on what they actually support,” she said. “They are projecting their politics onto bitcoin when this technology is really an apolitical thing.”
Humayun said some industry types view politicians like Poilievre as “fair-weather friends” who are all-in on the product when prices are high but disappear when the going gets tough.
“There are a lot of people who have been affected and they have lost their savings, unfortunately. Social media has put a strain on some of these things. It will be a big reckoning for the ecosystem,” she said of the crypto community following the FTX collapse.
“He’s not naive”
JP Lewis is Professor of Political Science at the University of New Brunswick Saint John and author of The Blueprint: Conservative Parties and Their Impact on Canadian Politics.
Lewis said Poilievre singled out 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 appealed to a very specific type of conservative voters with this crypto pitch. I would say, based on Poilievre’s style, it would be very surprising for him to back down. He just wants to talk less about it,” Lewis said.
“He’s a political actor at heart. He was well aware of what these YouTube talk shows would do for this brand. There were benefits and there were risks. He’s not naive.”
A number of right-leaning and libertarian-minded investors have advocated cryptocurrency – a financial instrument that is loosely regulated in the Western world – as a way to reduce government control over money because the supply of cryptocurrency tokens is not set by an 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 a hedge against inflation at a time when central banks are pursuing policies that dilute the value of cash.
Some of these right-wing investors have adopted the “cryptobro” label, a sometimes derogatory term for people who are dogmatic about crypto and its potential to change the world of finance.
“The question is whether there will be political consequences with a voter in the general election. Will the Liberals be able to keep Poilievre with bitcoin, with the convoy, with the World Economic Forum’s theories, and will it resonate with the moderate or partisan voters who decide the election ?” Lewis said.
“This is an old liberal playbook – scare tactics. We don’t know how effective it will be.”
