Twitter’s future looks fuzzy under Elon Musk. But could things be coming into focus for crypto Twitter?
Musk now owns a social network used by a large and dynamic online community of crypto supporters, in which he himself has been one of the loudest and quirkiest voices. The ongoing health of Twitter and its direction under Musk could have a significant impact on a service where crypto promoters tout tokens, developers coordinate software updates, and investors seek information.
The self-appointed “chief twit,” who has more than 112 million followers on Twitter, is known for triggering wild movements in the price of dogecoin by endorsing — or even just mentioning — the token. He triggered a sell-off by jokingly dismissing it as “a hustle” on “Saturday Night Live.”
At his direction, Tesla purchased $1.5 billion worth of bitcoin and announced that it would take the crypto token as payment before selling a huge chunk of that investment and saying bitcoin payments had been halted due to environmental worries.
Despite Musk’s idiosyncratic posturing, crypto fans on Twitter seem excited by the notion of someone they view as one of their own running the place. Dogecoin, for example, has been rallying again, its price boosted not by any tweets by Musk but simply by the idea that one of its leading cheerleaders is in charge.
There could be more concrete changes to Twitter’s business from the crypto world, though. The deal itself was made possible in part by backing from a crypto powerhouse, Binance, giving the world’s biggest crypto marketplace a say in reshaping a major social network.
CEO Changpeng Zhao said in a statement that Binance’s hope is to “play a role in bringing social media and Web3 together in order to broaden the use and adoption of crypto and blockchain technology.”
Patrick Hillmann, the company’s chief strategy officer, called the investment “a great R&D opportunity.”
“We see this as a once-in-a-lifetime opportunity to use what is one of the most prestigious platforms from the Web 2.0 era as a laboratory or a sandbox to be able to test out whether Web3 solutions might be able to solve some of the problems that are plaguing Web 2.0 platforms today,” he told Protocol.
He said Binance hopes to play a role in solving problems plaguing crypto Twitter, led by the proliferation of AI-driven bots that have “completely debased the entire conversation,” he said. Musk himself has said spam bots — many of them pushing crypto scams — were a motivation to take over Twitter, and at one point vowed to “defeat the spam bots or die trying!”
Some ideas are already being considered, such as using a microtransaction system that “would result in unimaginable costs for these bot farms,” Hillmann said. Another proposal is to attach an NFT to an account or a cluster of accounts to “ensure there was an actual user behind that account,” he said.
These potential fixes will take time, though Musk has shown he wants to move quickly on the product front, rapidly launching plans to charge verified users and explore a relaunch of Twitter’s defunct short-video service, Vine.
Musk is currently focused on reorganizing Twitter, “doing all that work right now that you would expect any new executive who's just taken over a prestigious company that's been in existence for over a decade,” Hillmann said. “Once that starts to come around, then we'll start to talk about, OK, how do we begin to launch some of these projects?” he said.
Rob Siegel, a management lecturer at the Stanford Graduate School of Business, said Twitter under Musk could mean that “Web3 technology finally gets a commercially interesting application at scale that is more than financial speculation.”
“I think that is the most interesting thing that I see right now” in the potential impact of a Musk-led Twitter on crypto, he told Protocol.
Then there are the downbeat scenarios, he said.
One is the “potential risk for more volatility [and] meme exploitation. Depending on what happens with Twitter, it could devolve into more chaos, which would encourage bad actors,” he said.
Another risk factor is Musk himself.
Marc Fagel, a former SEC regional director for San Francisco, said “Musk’s promises of a barely moderated free-for-all” could easily attract “racist and anti-Semitic” tweets as well as “unfounded crypto evangelism and pitches for NFT and crypto scams, particularly given Musk’s own predilection for doge-touting and the like.”
Melody Brue of Moor Insights & Strategy agreed. Twitter “will have to figure out how to balance Musk's ‘free speech absolutist’ stance and human responsibility around hate and misinformation, or it will lose users and more advertisers,” she told Protocol.
Musk tried to reassure advertisers that the service would not become a “hellscape.” But he did not help his case when he shared a baseless conspiracy theory about the attack on Paul Pelosi, the husband of Speaker of the House Nancy Pelosi.
Musk later deleted the tweet, which “probably means he thought it was a mistake,” said Binance’s Hillmann.
“Everybody says stupid things on social media, things they regret, things they delete,” he added. “People should be allowed to do that. And it's not going to go into the calculus of our business and what our objective is right now.”
And that objective is turning around Twitter’s stagnant product development, slow-growing user base, and weak financials. Though the members of crypto Twitter obviously want to know how the Musk regime will benefit them, their needs are likely on the back burner as Twitter reels from the turmoil caused by the takeover.
Siegel said Musk “has bigger problems,” including building “the right internal and online culture,” as well as “navigating political minefields and also paying back his financial supporters.
“Dealing with crypto Twitter might be a low priority,” he said.Indeed, Musk has barely tweeted about crypto since he started accumulating his stake in Twitter. In a message to advertisers after completing the Twitter deal, Musk appeared to acknowledge, in his own peculiar way, the gargantuan task ahead. “I didn’t do it because it would be easy. I did it to try to help humanity whom I love. And I do so with humility, recognizing that failure in pursuing this goal despite our best efforts is a very real possibility. “ Crypto Twitter might love him. But Musk has a lot of people to love,
Correction: A previous version of this article misspelled the name of Binance's Chief Strategy Officer. It is Patrick Hillmann, not Hillman.