Elon Musk, who is the CEO of the famous automotive company Tesla, is quite popular on Twitter for sharing his views on politics, crypto, and business. Some of these views can often be controversial, too. Recently, he shared a musing about buying the microblogging site Twitter. Although this buyout offer was initially refused by Twitter, a deal was reportedly finalized between Twitter and Elon Musk for $44 billion or $54.2 per share. When the news of this buyout broke out, its effects were felt in the crypto trading world as well.
In this article, we will explore how this buyout could affect Bitcoin and other cryptocurrencies, given the influence Elon Musk wields on the world of cryptocurrency.
Elon Musk’s Twitter Buyout and its Effect on Crypto Trading
On April 25, 2022, the crypto world was abuzz with the news that Twitter had reportedly accepted Elon Musk’s buyout offer. It was stated in the press release that the final valuation of the company was $44 billion in cash. The finalization of the deal would mean that Twitter would become a privately held company. Soon after, the Tesla CEO released a statement saying he believed in the importance of free speech and how it is the bedrock of a democracy. He also went on to say that he aims to add new features to Twitter, intended to markedly improve its user experience. The independent board chair of Twitter, Bret Taylor, said that the offer was accepted after a comprehensive and thoughtful process of assessing Musk’s proposal.
Early last month, Elon Musk had revealed that he had bought a 9.2 per cent stake in Twitter, which cost him a total of $2.89 billion. He had also criticized Twitter in a series of tweets, pointing out its failure to adhere to principles of free speech. Eventually, on April 13, it was reported in a regulatory filing that Elon Musk invested in Twitter to make the microblogging company private. After the news of the buyout broke out, Twitter trading was halted for a while. The effects were also seen in crypto trading.
Elon Musk has been a vocal supporter of crypto for a while now. In early 2021, he had announced that he held several cryptocurrencies like Dogecoin, Ethereum, and Bitcoin, the total valuation of which stood at $2 billion. The Tesla CEO had also accepted payments in the form of Bitcoin (BTC), which were later stopped because of environmental concerns. The most famous instance of Musk’s influence in the crypto world was observed when his tweet supporting Dogecoin led to a 20–30 per cent surge in the prices of Dogecoin. So how could the Twitter acquisition affect various cryptocurrencies, including Bitcoin? Let’s take a look.
Effect of the Twitter Acquisition on the Crypto Exchanges
Often referred to as the king of cryptocurrencies, Bitcoin is one of the most valuable digital currencies in the world today. It was also supported by Musk at a time when he accepted it as a payment method for Tesla. However, Musk had later halted the move because of the environmental concerns over the bitcoin mining process. With the news of Musk’s Twitter acquisition, it is expected that the prices of Bitcoin would soar again.
Ethereum is popular for its blockchain, which is often used for creating decentralized applications (DApps). Developers that want to access this network need to buy Ethereum native token ether (ETH). It is expected that the prices of ETH can also soar as it is one of the cryptos held by the Tesla CEO himself.
This cryptocurrency was launched in 2013, making it one of the older cryptocurrencies. The currency was made popular in the crypto exchanges when Elon Musk tweeted about it in 2019. Several news platforms have reported that the prices of Dogecoin could soar because of the acquisition of Twitter by Elon Musk.
4. Shiba Inu
This is another cryptocurrency that has remained popular in the crypto trading world this year. It is also one of the fastest-growing cryptos, as its valuation increased by 50,000,000 per cent last year alone. This cryptocurrency has also been tweeted about by Elon Musk in the past, which is why it is believed that its prices can soar markedly.
BabyDoge is another meme coin that emerged out of the Dogecoin craze. Launched in mid-2021, the coin has been performing well in the market and was also featured in an Elon Musk tweet. Many believe that the Twitter acquisition could translate into the BabyDoge prices going up too.
Other cryptocurrencies that are expected to perform well as a result of Musk’s Twitter acquisition are –
- Binance Coin
Effect of the Acquisition on the Twitter Cryptoverse
Even though the regulatory approval of the Twitter buyout is still pending, discussions are taking in the crypto space about the changes that will be expected in the Twitter crypto verse. Many experts believe that this acquisition could translate into increased adoption of crypto and blockchain initiatives. Here are some of the things we can expect to see on Twitter with Elon Musk at its helm –
- Adoption of Web3: Elon Musk has always been a vocal supporter of decentralization and Web3 tech. Many experts are of the opinion that Musk could use Twitter to make the concept of decentralized mainstream. Some also believe that he has plans to make the algorithm code of Twitter open-source, which would help in increasing trust in the crypto space.
- Lesser crypto spambots: A problem that has plagued the crypto space on Twitter for quite a while is that of crypto spambots. Ever since Musk revealed his love for crypto assets, many fraudsters have emerged on Twitter who use Elon Musk’s name to steal millions of dollars from investors.
- Countering hate speech using crypto: The biggest challenge faced by any social media network is content moderation. Musk believes that making the Twitter algorithm open-source would certainly help in increasing the trust in the platform. He also plans to introduce some crypto-like concepts for tackling hate speech on the platform.
With the acquisition of Twitter by Elon Musk, many experts believe that the narrative of crypto space on Twitter can undergo a big change. Although the prices of Bitcoin and certain other currencies are expected to soar, only time will tell how the situation pans out for the crypto world.