What Does Twitter's New CEO Elon Musk Mean for Crypto?

What Does Twitter's New CEO Elon Musk Mean for Crypto?

Created 1yr ago, last updated 1yr ago

It really happened. Elon Musk bought Twitter.

What Does Twitter's New CEO Elon Musk Mean for Crypto?

Table of Contents

It really happened. Elon Musk bought Twitter.

After months of back and forth and back and forth, Elon is about to become the official CEO, pardon, Chief Twit of Twitter. Let that sink in:

There's plenty of ground to cover, so let's look at:

  • The play-by-play of how Musk bought Twitter
  • Who is financing the deal
  • The best reactions
  • Elon's vision for Twitter
  • If DJT is allowed back

And most importantly:

What does all of that mean for crypto?

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How Elon Musk Bought Twitter — The Play-by-Play

On October 28, Elon Musk put an end to the Twitter acquisition saga that had been going on for months:

A full recap of this lengthy tale definitely fits no character limit. But safe to say that there was no love lost between Musk and the former Twitter executives, several of whom were, according to Reuters, escorted out of the building after having been fired with Musk's first “executive order.” This included CEO Parag Agrawal, CFO Ned Segal and legal affairs and policy chief Vijaya Gadde, who was reportedly behind the infamous Trump ban in 2021.

After letting his takeover "sink in," Musk met a lot of "cool people," according to his own account. How many of them will be working at Twitter a few months from now remains to be seen.

Reuters cites an internal company poll among 266 employees (out of a total of 7,500), finding that fewer than 10% expect to be working at Twitter three months from now.

European Commissioner Thierry Breton already warned Musk that the EU has its finger on the regulation button, if need be:

Regardless, starting Monday, Twitter will not be traded anymore on the NYSE.

Who's Backing the Twitter Deal?

One thing that hasn't changed in this deal is the price tag: $44 billion.

Now, who has that much money for an app that's free on the App store?

Elon Musk, reportedly worth more than $200 billion, does. But even the richest of the rich prefer to get liquidity injections that will bring the price down. One of those came from Binance's Changpeng Zhao:

More backers come from the financial sector, with several banks chipping in $13 billion in debt financing, according to Bloomberg:
Whether Binance is also financing a loan or signed up for an equity deal (even though Musk is taking Twitter private) is unknown. According to Forbes, there may be foreign investors on board as well, such as Saudi Prince Alwaleed bin Talal and Qatar’s Sovereign Wealth Fund. That reportedly may trigger a national security review, something that Musk may look forward to, given his recent verbal sparring with foreign leaders on Twitter.

Reactions to Musk Buying Twitter

Unsurprisingly, the reactions in the conservative and crypto corners of Twitter ranged from positive to over moon. Here's a selection:
While left-wing and liberal commentators were, shall we say, bearish on Musk's takeover:

Elon Musk's Vision for Twitter: A Western WeChat?

There's been much talk about why exactly Musk wanted to buy Twitter in the first place.

  • Ask conservatives, and they'll say he's genuinely had enough of Twitter's content policies supposedly favoring liberal-leaning accounts.
  • Ask liberals, and they'll say that he's an egomaniac that wants to score cheap political points and is buying Twitter mostly because he likes the attention.
  • Ask crypto bros, and they'll tell you that Elon was pro-crypto all along and will overhaul the app into a decentralized social media platform.

Which one is it?

Probably a mixture of all of them.

While we don't know what Musk has exactly in store for Twitter, we do know what he has said about it. For example, one of his most recent tweets addresses his motivation for buying it:
Let's recap that:
  • Twitter should be a digital town square;
  • It should not be a place for radicals from either side;
  • Musk didn't buy it for the money;
  • But it also can't be a free-for-all;
  • Ads should be relevant to the user.
So, there will be some form of advertising and monetization on Twitter, something that has been mostly lacking from the platform so far.

Musk also agreed that creators need to be rewarded:

Then there's the issue of supposed "shadowbans," which many users, particularly conservative ones, have been complaining about:
All of that sounds great. But it's a long laundry list of issues, and the question is: how do you want to pull this off?
Rumor has it that Musk wants to build an "everything app" not too dissimilar from the Chinese WeChat app. This application combines messaging, ride-hailing, financial, and many other features all in one, which makes it very convenient but also very centralized.
This "everything app" idea, which may be called X, isn't new at all. In fact, Musk seems to have had this idea for a long time:

Twitter may just be a part of his greater vision:

Now, the question is: can Twitter become this X application? How do you combine the numerous moving parts to effectively create something completely new?
Take YouTube for example. You can use it for entertainment or education or something in between, but it isn’t really controversial. And even though its reach is bigger than Twitter’s, no one will, say, start (or document) a revolution on there.
But Twitter has a strong cultural and even political influence. Donald Trump was banned not despite his reach but because of it. Only because so many people were presumably spurred on by his tweets did he get banned. Only because foreign leaders of less-than-democratic states like Russia and Iran are still alive and tweeting is his ban so controversial. The real-world influence of Twitter's heavy users and their tweets is disproportional compared to other social media platforms.
That said, the app relies heavily on that small core of hardcore users. Advertising is practically irrelevant on Twitter. Creators can monetize only indirectly. And yes, different factions can clash on the app and things can get ugly.

Throw all of that in with a bunch of new features to increase Twitter's usability?

Elon Musk sure isn't aiming low. But then again, he never was the type to do that.

What Does Musk Owning Twitter Mean for Crypto?

Obviously, many a crypto influencer and the entire community have been longing for this moment. And there are good reasons that this may be bullish for crypto. Twitter has already been slowly rolling out new NFT-related features:

The big one is where crypto integrates with Musk's bigger vision for the app. He has already vowed to battle crypto scams and bots on Twitter. The latter seems to be improving as we speak:

Beyond that, not much is really known about where crypto and blockchain fit in. Binance reportedly has formed a team to brainstorm ideas on how blockchain can be of use to Twitter. Vitalik Buterin has called for Twitter's headquarters to be moved to famously neutral Switzerland. And, of course, DOGE is up more than 25% in the last few days on rampant speculation that it may be used for creator monetization.
Again, telling the signal apart from the noise is tricky. Crypto will play a bigger role in Twitter's future, not least because of Binance's involvement. A more prominent monetization feature will almost certainly come. But which coin(s) it will use, whether the entire platform will move to blockchain rails, and other questions can only be speculated about.

And What About Trump?

Last but not least, the big orange elephant in the room is Donald Trump's account, which has been in Twitter jail ever since his ban. Will Musk make good on his plan to reverse lifetime suspensions of users?

Liberal users would surely be left in shock and disbelief. But all is not as easy as it seems. Companies seem to have arranged themselves with the status quo and don't want anything to change:

Prediction markets have been oscillating wildly when it comes to the chances of the former President coming back to Twitter. His chances surged after Musk bought Twitter, then dumped on the news that companies may pull out if Trump is allowed back. After Musk’s last tweet promising a “content moderation council,” Polymarket traders favor Trump’s chances to stay banned:
Practically speaking, amnesty for one should mean amnesty for all. How exactly that is supposed to work in practice isn't really clear. Musk himself said that a “content moderation council” would be appointed before any accounts are reinstated.

Well, that's the whole appeal of Elon Musk.

You never really know what he's going to do nex

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