“Great news,” Alberta’s employment minister tweeted on Dec. 9, as bitcoin’s price barely topped US$47,000, down from the previous month’s high of $68,789, but still strong. .
A company from the “disruptive crypto world” was moving to Calgary, wrote Doug Schweitzer, and would create 100 jobs.
On February 3, when one bitcoin was worth US$37,154, he presented what he called a big opportunity to the BNN Bloomberg trading network.
“There’s a big battle going on in the United States – you’ve got New York, Miami, you’ve got Wyoming, Arizona,” he said. “It doesn’t appear that any jurisdiction in Canada really wants to take this opportunity.”
The opportunity? That Alberta could claim its position as the leader of Canadian Cryptoland, to carve out a slice of a flashy new industry and all the jobs and dollars that come with it.
The government would turn this bullish sentiment into action. During the spring, when the bitcoin price was relatively stable, it passed a bill which temporarily allows cryptocurrency and other fintech companies to be exempt from certain financial laws when testing products in Alberta.
Months later, bitcoin’s price was barely above US$20,000. If you had bought $5,000 in digital currency the day Schweitzer appeared on BNN, you would have $2,691.28 left on Monday.
When we talk about the amount of money wiped out by the industry, it’s a statistic that jumps out at you: the global crypto industry fell from $3 trillion in November 2021 to less than US$1 trillion this week.
The Alberta government has always touted crypto businesses as part of its diversification strategy as a way to protect the province from the boom and bust of the oil and gas industry. And if you think an industry that recently saw two-thirds of its paper value wiped out in just over two fiscal quarters seems like a strange hedge against volatility, you’re not alone.
Not everything has been downhill, at least locally. On Friday, the Bahamian-based cryptocurrency exchange giant known as FTX Exchange announced that it will launch its first Canadian site in Alberta after acquiring Calgary-based Bitvo Inc.
And Alberta Premier Jason Kenney remains optimistic, at least for now, tweeting on Sunday that news from FTX meant Alberta “is open for business.”
But it’s not just investors who lose in the middle of the selloff. Newly created jobs are now lost. All aboard a brand new roller coaster ride?
It’s the decentralized economy, silly
The Kenny Government argued thatThe day-to-day volatility of individual cryptocurrencies like bitcoin and ethereum is irrelevant when it comes to the broader decentralized finance space — those technologies that allow users to lend, borrow, and trade without go through a bank.
Schweitzer directly promotes companies and technologies that support cryptocurrencies, not cryptocurrencies themselves, unlike Conservative leadership candidate Pierre Poilievre. full bitcoin support. To be clear, Alberta public pension manager AIMCo claims that it has no direct exposure or investment in cryptocurrency (unlike its counterpart in Quebec).
“This field is not going away. We know it will be here for the long term. Blockchain technologies in addition have long-term applications,” Schweitzer told BNN in February. His office declined to comment for this story.
Industry believers buy that argument. And they would caution against reading too much of the recent fall. This has happened many times before in the lifetime of crypto – bitcoin lost almost half of its value in mid-2021, only to rebound to new highs.
Alberta is also attractive to so-called cryptocurrency miners, computers with powerful processors who earn bitcoin by solving complex mathematical problems. This energy-intensive process can access this province’s natural gas supply and relatively affordable electricity grid, although it is criticized for its environmental impact.
The measures taken by the government have been successful in attracting investment in the sector so far. Julian Kymochko, CEO of Accelerate, a Calgary-based firm that caters to crypto and alternative investors, said Alberta was “the perfect place.”
“I would say regulators are quite innovator-friendly,” he said.
Others are more skeptical about strategy and technology.
Paris Marx, host of Technology won’t save us podcast, finds it disturbing to hear governments talk about cryptocurrency in pink without taking a critical look at it.
“This may include environmental impacts, which could include questions as to whether cryptocurrencies and the various projects surrounding them are pyramid schemes or Ponzi schemes, or related in the sense that they actually produce nothing value,” said the Newfoundlander. Marx.
As for the government’s claims that they are promoting the underlying technology, and not the cryptocurrencies themselves? Marx sees this as an “escape”.
“Naturally, people who listen to the government would be more likely to look into cryptocurrencies or consider putting money into them.”
Crypto-mania seemed to hit its peak about six to eight months ago, around the time Matt Damon urged the audacity to buy crypto in a Super Bowl commercial and when LeBron James hit the pitch at the Los Angeles Lakers’ new Crypto.com Arena. .
There’s a distinctly different vibe now. Last month, one of the ten largest cryptocurrencies in the world, Luna, was almost completely wiped out in a week, to the tune of nearly $45 billion.
This month big crypto exchange Celsius halted withdrawals. Crash in crypto prices also led to layoffs among blockchain tech firms – crypto exchange Coinbase and BlockFi laid off 18 percent and 20 percent of their workforce, respectively.
Even the Canadian company Wealthsimple, which in a recent ad campaign for its crypto exchange platform compared crypto-skeptics cavemen who doubted the invention of the wheel, fired 13 percent of its staff, citing “market volatility”.
And to be clear, Alberta’s venture into fintech and Bill 13 isn’t just about blockchain.
Ryan Clements, a Canadian fintech specialist who teaches at the University of Calgary, said the work being done could generate economic prosperity beyond blockchain.
He sees the government’s recent moves as a broader “ecosystem game” in fintech.
“I see crypto and the blockchain community as (only) a factor in that,” he said.
It’s also a chance, according to Clements, for the market to understand what the real use of blockchain might be, outside of the purpose of speculative trading.
This could involve use cases in insurance, real estate, or supply chain, among other possibilities.
And while the province claims to be focused on all manner of fintech, cryptocurrency will likely continue to garner almost all of the public and business attention.
Critics will stick to the implications for both the environment and people, as layoffs continue to be likely across the sector and as ordinary people risk seeing their investments disappear.
For now, wild swings are an integral part of the cryptocurrency space. At least in this way, bitcoin seems to be an integral part of Alberta’s economy.