In 2006, the social media platform Twitter was created by Jack Dorsey, Biz Stone, Evan Williams and Noah Grass. Sixteen years later, the CEO of Tesla, Elon Musk has agreed to purchase the platform for $54.20 a share ($44billion in total) as the world’s richest man went from disclosing his initial stake in the company to the platform’s complete buyout within the space of a month.
But why is this relevant to the world of fintech? Musk has never been shy from stepping into the world of financial technology, from expressing support for cryptocurrencies like Dogecoin; to stating that Tesla would be accepting Bitcoin as a form of payment, before revoking this a few months later. Be it positively or negatively, Musk has never shied away from dabbling in fintech, and there is no reason to believe this would be any different now, especially as Musk has made his intentions clear of adding new features to Twitter.
While many of these changes involve editing tweets and censorship, discussion surrounding Twitter’s premium monthly subscription service, Twitter Blue, has been brought into question too. Originally stating that: “Price should probably be ~$2/month, but paid 12 months up front & account doesn’t get checkmark for 60 days (watch for CC chargebacks) & suspended with no refund if used for scam/spam” in a tweet, Musk also responded to another user saying an option to pay for the service in Dogecoin was a possibility to ensure affordability across the globe.
Maybe even an option to pay in Doge?
— Elon Musk (@elonmusk) April 10, 2022
With Musk’s opinion on cryptocurrency taking a heavy toll on the already volatile market, an outright change in payment acceptance on such a global platform like Twitter, could send it into overdrive. When Musk announced Tesla would no longer be accepting Bitcoin in May 2021, the digital asset’s value fell by over 10 per cent, after making it jump an initial 17 per cent to $44,220, a then-record high, when Bitcoin was announced to be accepted by the automotive company. Many have also argued Musk’s tweets about cryptocurrencies like Dogecoin have massively impacted their value, as the digital asset’s price spiked 12,650 per cent in Q1 of 2021.
With so many of the fintech community being regular Twitter users, we reached out to them to find out what they believed was in store for the industry once the acquisition was finally completed.
Chris Kline, co-founder and COO of Bitcoin IRA said: “Elon Musk has been an advocate for the crypto community for many years. I think we’ll see him make crypto more accessible across Twitter, which will also help with the widespread adoption of crypto. This will usher in a new era of commerce and trailblaze a path for altcoins to expand their use case. Coming off the heels of Fidelity’s announcement that they will offer 401(k) investors access to Bitcoin and crypto advocate Elon Musk buying Twitter, trillions of dollars could flow into crypto markets as a result, which could open up another frontier for the future of digital assets. This is a huge badge of approval for the crypto space moving forward. This is not occurring in a vacuum and is happening alongside other announcements like El Salvador, Terra, and MicroStrategy. I believe Elon Musk will only further that momentum with Twitter, so we shouldn’t be shocked to see other tech giants and leaders add similar products as crypto adoption continues.”
A similar point of view was provided by David Khalif, head of operations at Viridi Funds. “The impact of Elon Musk’s acquisition on Twitter will be instrumental towards speeding up the adoption curve of cryptocurrency. Musk tends to favour Dogecoin over other currencies, however, it is unlikely that Dogecoin will be the only currency integrated with the platform over time. As adoption of cryptocurrency grows and the number of users that interact with it increases, it is likely that the market for cryptocurrency will grow as well.”
Nick Saponaro, CEO of decentralised payments ecosystem, Divi Labs commented on Musk’s Intentions for Twitter and the impact on the crypto-sphere saying, “I’ve heard everything from ‘he wants to shut down political opposition by curtailing their reach or banning them altogether’ to ‘he wants to leverage the dataset to create a super AI’ and everything in between. It’s entertaining at the very least. My feeling is he wants to eliminate the blood-sucking Wall Street shareholders from a global platform that should be free and open and not bogged down by political special interests. My hope is that he sticks to his guns and makes Twitter a truly open platform that enables free speech. There are extremists on either side, they are a minority but they should have a voice no matter how inane or insane. Better they are out in the open and not underground, where they can infect unseen.
“Selfishly, I would love to see him reform the advertising policies to allow more self-custodial wallets and services to advertise. It would be even better if the entirety of the algorithm was open-sourced and Twitter was made decentralised. Crypto users have been banned en masse by Twitter, YouTube, etc. on occasion. The hope is a more open version of Twitter gives crypto folks a safer place to engage in discourse. If his intentions are pure, this will be a net positive for the crypto space. If they’re not, then everyone is f*****.”
Ian Epstein, president of Enigma Securities and global head of digital assets at Makor Group provided an alternative point of view on the impact of the acquisition. “Elon Musk’s Twitter acquisition won’t directly impact crypto or fintech markets. Other catalysts, mainly inflation anxiety and generationally-high geopolitical risks, outweigh any effects from Musk’s takeover. That said, Musk’s interest in and enthusiasm is consistent with the general zeitgeist and there will continue to be increasing interest on Twitter for the way in which digital assets impact the broader economy.”
He did continue to analyse the impact it would have on the crypto Twitter community and what integrating crypto payments would involve: “Crypto Twitter, like most of the digital community, is a large component of decentralisation and free speech. If Musk’s acquisition of Twitter results in less censorship and more decentralisation, then we’d anticipate more support from the digital assets community and crypto Twitter.
“Twitter currently integrates user tipping with digital asset payment providers and Ethereum wallets and NFT profile pictures. Musk is likely to preserve these features as long as its business case remains strong. Blockchain tech would enable users to have greater ownership over their Twitter presence with a decentralidation of the Twitter platform. Whether Musk chooses to decentralise Twitter remains to be seen.”
Analysing the impact this could have on the metaverse, Hans Hansen, CEO of Brand3D said: “It appears that the ‘trillion-dollar opportunity’ of the metaverse predicted by Grayscale and others is largely pinned on real estate like trading in the metaverse. Even in the real world real-estate market we have seen massive market booms that were not driven by people needing a place to live, but rather by excessive ‘buy-to-rent’ investment schemes in large cities all over the world. In cities like London house prices grew with double and triple digit percentages year-on-year in the early 2000s and eventually this market crashed at an almost similar pace years later.
“Now, consider real-estate speculation in a metaverse where prices of ‘real-estate’ are touted by celebrities and massive user communities on Twitter, maybe even driven by the new owner himself. It would not be hard to imagine an even faster pace in pricing – possibly followed by a giant crash in values once the news value wears off, or even more dramatically, if something would happen to Twitter or Mr Musk.
“Although the market drivers are much stronger, one would only have to look back on the previous metaverse market boom when large brands from all over the world purchased real estate in Second Life. These investments are now worth pennies on the dollar and few people even remember Second Life today.”
Tammy Da Costa, analyst at DailyFX concluded: “Although Bitcoin remains in the lead as the largest cryptocurrency (in terms of market cap), the scarcity and limited amount of coins could support its perceived intrinsic value, for now, the environmental implications could limit Bitcoin’s gains.
“Meanwhile, with Musk successfully acquiring Twitter, Dogecoin surged over 20 per cent, once again illustrating the entrepreneur’s ability to move markets through social media. With a current Twitter following of 87.8 million, Dogecoin could continue to rise if the decision to implement the coin as a payment method increases institutional interest. With thousands of cryptos now available to trade, the blockchain is where the ‘value’ lies. For Bitcoin, the mining process continues to require more energy as the blocks get closer to their final stage (meaning that 21 million BTC coins have been created), however, if Dogecoin is able to complete transactions faster and in a more environmentally friendly manner then the coin may receive more institutional interest in the future.”