Alberta embraced the cryptocurrency sector. Months later, crypto crashed


“Good news,” the Alberta employment minister tweeted on Dec. 9, when the price of bitcoin was just over $ 47,000, above the previous month’s record of $ 68,789, but still.

Doug Schweitzer wrote that a company in the “disruptive cryptographic world” was moving to Calgary and creating 100 jobs.

On February 3, when a bitcoin was worth US $ 37,154, he launched what he called a great opportunity for the BNN Bloomberg trading network.

“There’s a big battle in the United States: you have New York, Miami, you have Wyoming, Arizona,” he said. “It doesn’t look like any jurisdiction in Canada really wants to take this opportunity.”

The opportunity? That Alberta could claim its claim as the leader of Canadian Cryptoland, to create a piece of a striking new industry and all the jobs and dollars it entails.

The government would turn that bullish sentiment into action. During the spring, although the price of bitcoin was relatively stable, that passed a bill which temporarily allows cryptocurrencies and other financial technology companies to be exempt from some financial laws while testing products in Alberta.

Months later, the price of bitcoin was just over $ 20,000. If you bought $ 5,000 in digital currency the day Schweitzer appeared on BNN, you would have $ 2,691.28 left on Monday.

When it comes to the amount of money removed from the industry, it’s an astonishing statistic: the global cryptographic industry it went from $ 3 trillion in November 2021 to less than $ 1 trillion as of this week.

The Alberta government has consistently promoted cryptocurrency companies as part of its diversification strategy as a way to protect the province from the boom and fall of the oil and gas industry. And if you think that an industry that recently removed two-thirds of its value from paper in just over two fiscal quarters seems like a strange hedge against volatility, you’re not alone.

Not everything went downhill, at least locally. On Friday, the Bahamas giant cryptocurrency exchange known as the FTX Exchange announced that it would launch its first Canadian location in Alberta after acquiring Calgary-based Bitvo Inc.

And Alberta Prime Minister Jason Kenney remains optimistic, at least for now, tweeting Sunday that FTX news indicated that Alberta “is open to business.”

But not only investors are losing in the middle of the sale. They are now losing newly created jobs. All aboard a new roller coaster?

It’s the decentralized, stupid economy

The Kenney government argued thatThe day-to-day volatility of individual cryptocurrencies such as bitcoin and ethereum is irrelevant when it comes to the broader decentralized financial space: those technologies that allow users to borrow, borrow, and trade without going through a bank.

Schweitzer directly promotes companies and technologies that support cryptocurrencies, not cryptocurrencies themselves, in contrast to Conservative leadership candidate Pierre Poilievre. full bitcoin support. To be clear, Alberta’s public pension manager, AIMCo, says it has no exposure or direct investment in cryptocurrency (unlike its counterpart in Quebec).

“This area is not going to go away. We know it will be here in the long run. In addition, blockchain technologies have long-term applications,” Schweitzer told BNN in February. His office declined to comment on this story.

As Alberta’s Minister of Employment, Economy and Innovation, Doug Schweitzer has been the government’s main proponent of the blockchain and cryptocurrency sectors. (Todd Korol / The Canadian Press)

Industry believers buy that argument. And they would warn you not to read too much in the recent dive. It happened on several occasions before the useful life of cryptography: bitcoin lost almost half of its value in mid-2021, only to regain new highs.

Alberta is also attractive to so-called cryptocurrency miners, computers with powerful processors who earn bitcoins by solving complex math problems. This highly energetic process can access the natural gas supply of this province and the relatively affordable electricity system, although it is criticized for its environmental impact.

Government moves have successfully attracted investments to the sector so far. Julian Kymochko, CEO of Accelerate, a Calgary-based company that caters to cryptocurrency and alternative investments, said Alberta was “the perfect place” to be.

“I would say regulators are quite friendly with innovators,” he said.

Others are more skeptical about strategy and technology.

Paris Marx, presenter of the Technology will not save us podcast, finds it worrying to hear governments talk about cryptocurrency happily without taking a critical look at it.

“This may include environmental impacts, which could include questions about whether the cryptocurrencies and the various projects around them are pyramid schemes or Ponzi schemes, or related in the sense that they are not actually producing anything of value,” the company said. based in Newfoundland. Marx.

As for the government’s claims that they are promoting the underlying technology, not the cryptocurrencies themselves? Marx sees this as a “cop-out.”

“Naturally, people who listen to the government would be more likely to look for cryptocurrencies or consider putting money into them.”

Governments need to take a critical look at cryptocurrency, says Paris Marx, a Newfoundland-based podcaster. (Submitted by Paris Marx)

Cryptomania seemed to peak between six and eight months ago, at a time when Matt Damon was daring to buy cryptocurrencies at a Super Bowl commercial and when LeBron James hit the court at the Los Angeles Lakers’ newly renowned Crypto.com Arena. .

Now there is a markedly different mood. Last month, one of the ten largest cryptocurrencies in the world, Luna, was almost completely wiped out in a week, for about $ 45 billion.

This month, great cryptographic exchange Celsius stopped the retreats. The collapse of cryptocurrency prices has also led to layoffs among blockchain technology companies: cryptocurrency exchange Coinbase and BlockFi fired 18 percent e 20 percent of their workers, respectively.

Even Canada-based Wealthsimple, which in a recent ad campaign for its cryptocurrency exchange platform compared cryptocurrencies to the cavemen who doubted the invention of the wheel, fired 13 percent of its staff, citing “market volatility”.

Beyond the blockchain

And to be clear, Alberta’s commitment to financial technology, and Bill 13, is not just about blockchain.

Ryan Clements, a Canadian financial technology scholar who teaches at the University of Calgary, said the work being done could bring economic prosperity beyond the blockchain.

He sees recent government moves as a broader “ecosystem game” in financial technology.

“I see crypto and the blockchain community as (just) a factor in that,” he said.

It is also an opportunity, according to Clements, for the market to discover what the true utility of the blockchain might be, in addition to the purpose of speculative trading only.

This could involve use in insurance, real estate or the supply chain, among other possibilities.

And while the province will claim that its focus is on all kinds of financial technologies, cryptocurrency will likely continue to draw almost all the attention of the public and businesses.

Critics will stand firm on the implications for both the environment and people, as layoffs continue to be likely in the sector and the average person is at risk of seeing their investments disappear.

At the moment, wild swings are an integral part of the cryptocurrency space. At least that way, bitcoin feels like a natural part of Alberta’s economy.





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