Crypto

Opinion: What the Crypto Crash Says About the Pierre Poilievre Trial

Conservative MP Pierre Poilievre is raised during question period in the House of Commons on Parliament Hill in Ottawa on June 15.Justin Tang/The Canadian Press

From the moment he entered the race to become the next leader of the Conservative Party of Canada, Pierre Poilievre has been outspoken about the job he really wants.

“I am Pierre Poilievre and I am running to be prime minister,” he says in campaign videos. Becoming the new leader of the CCP would be a mere stop along the way.

Yes, prime minister is the position he wants, with all the seriousness and responsibility that the position demands. But since the start of his campaign, Mr. Poilievre has mostly invited questions about his judgment and fitness for office with a series of bizarre political pronouncements. Somehow, he hasn’t really had to answer for many of his more outlandish positions, like his promise to fire the governor of the Bank of Canada.

However, he can and should be questioned today about his enthusiasm, if not outright promotion, of cryptocurrency.

Earlier this spring, Mr. Poilievre made headlines when he praised the controversial digital money system. It was the answer for Canadians who wanted to “opt out of inflation,” he said. After all, he was a bitcoin investor himself.

The presumed favorite to win the CPC lead has been much quieter about crypto these days. I wonder why?

Perhaps it is because the world of cryptocurrencies is imploding, just as Warren Buffett and his partner, Charlie Munger, suggested it might. Two of the largest and most profitable investors in history have bet on bitcoin and the cryptocurrency industry almost since its inception. Mr. Buffett said that he would not pay $25 for all the bitcoin in the world. Mr. Munger was even more damning, saying that in his life he tried to avoid doing anything that was mean, stupid and made him look bad compared to others: “Bitcoin does all three,” he said.

The paranoid style in conservative politics has deep roots

The good fortune of Pierre Poilievre: his followers do not see his hypocrisy

This week, Microsoft co-founder Bill Gates said that cryptocurrency was based on the “big fool theory.” This is the notion that investors can make money on something relatively worthless, as long as there are people willing to bid more for it.

Recent crypto losses have been estimated to total US$1.5 trillion. The value of Bitcoin continued to fall this week, down as much as 8 percent to around $20,000. In November, it was trading at nearly $65,000. The total value of the cryptocurrency market has shrunk by 65 percent since last fall, and many analysts believe the floor beneath it is still collapsing.

One concern amid all of this is the possibility that many Canadians bought what Poilievre was selling earlier this spring. And why would that be an exaggeration? The man, after all, is “running to be prime minister.” Surely, he wouldn’t recklessly promote something that was inherently risky.

I understand the appeal of Mr. Poilievre to many disenfranchised people, with his spectacular promises to get rid of the so-called “gatekeepers” who supposedly ruin the lives of so many. Guardians like the Bank of Canada, which Mr. Poilievre trashes regularly. But it turns out that the same guardian issued warnings about this very situation.

Who looks stupid now, Mr. Poilievre?

Some people suggest that the cryptocurrency crash is no different from the general stock market crash. That may be the case, but if Mr. Poilievre had been selling shares whose value had disintegrated, we would expect him to be held accountable. We anticipated that he would express how he felt about the possibility of Canadians being seduced by his warm embrace of a particular product, spending money to purchase it, and now facing excruciating financial losses as a result.

The reality is that much of the crypto industry appeared almost overnight, built on a foundation of dreams and wishes and fairy tale dust. Hollywood actors like Matt Damon urged people to participate with catchy slogans like “fortune favors the brave.” Of course, Hollywood celebrities don’t mind that the entire business model closely resembles a Ponzi scheme.

Cryptocurrency promoters boasted that they had never been ruled by watchdogs. Sounds wonderful, until you realize that this makes the industry riddled with fraud, scams, and abuse in general.

Mr. Poilievre has said that as prime minister he would normalize cryptocurrencies to “decentralize” the economy and reduce the influence of gatekeepers such as the central bank. He has not said what he would do if the industry collapsed in the meantime.

The man who aspires to be prime minister must answer some tough questions about his fascination with cryptocurrencies, and what it says about the kind of judgment it takes to do the toughest job in Canada.

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