Could Elon Musk’s Twitter Purchase Help These Cryptocurrencies Surge?

You’ve probably heard already, but Elon Musk bought Twitter. Even before the purchase was official there was speculation about what kind of changes he would bring. Three Fool.com contributors think one change could be cryptocurrency integration. If Musk does bring along more cryptocurrency functionality it’s possible that Dogecoin (CRYPTO: DOGE), Bitcoin (CRYPTO: BTC), and BNB (CRYPTO: BNB) could benefit most from Twitter’s new ownership.

The underdog

RJ Fulton (Dogecoin): What would be the most Elon Musk thing that he could do now that he owns Twitter?

If you started thinking about some sort of Dogecoin integration that brings the original meme coin to the masses then you might be on the right track. The possibility of Dogecoin becoming a means of payment on Twitter can’t be ruled out as long as Musk is at the helm. Remember, this is the same guy who directed his SpaceX engineers to design rockets that are more pointy because it “looks cooler.”

Since his purchase of Twitter, Dogecoin’s price has doubled in just over a week amid some hopeful speculation, but it’s still down more than 75% from its all-time high. But unlike Dogecoin’s most recent historical run in 2021, this time could be a little different.

When Dogecoin hit its all-time high of just under $0.75 there truly was no utility behind it. Before Musk made it possible to purchase Tesla apparel with Dogecoin, there weren’t many use cases for the meme coin. But if he creates some sort of integration with Dogecoin that would allow Twitter users to pay each other or even the rumored monthly fee he has been advocating for with the cryptocurrency, then the narrative that Dogecoin can’t be used for anything will quickly fade.

Before Musk’s purchase of Twitter, the chances of Dogecoin surviving were likely slim — especially because it’s not uncommon for cryptocurrencies to lose all of their value. But now the Dogefather (as Musk is sometimes called) is running one of the most popular social media platforms, that means Dogecoin could be around for good — even if there are more innovative blockchains out there.

This isn’t to say Dogecoin will become the next Bitcoin, but its revival could warrant a small position in your portfolio just in case Musk does what he can to make Dogecoin the future “currency of Earth” as he once proposed.

The veteran

Neil Patel (Bitcoin): Musk has long been a supporter of Bitcoin, the world’s most valuable cryptocurrency. And the company he heads, Tesla, currently owns a sizable amount of the top digital asset.

Since the announcement that Musk had completed the takeover of Twitter on Oct. 27, Bitcoin’s price has dropped just over 1% (as of this writing). This reaction isn’t like what happened with meme token Dogecoin, demonstrating that investors might not see much upside for Bitcoin with the deal. However, I think more than anything, this deal has shined a bright light on cryptocurrencies, positivity the industry desperately needs right now. That’s because the entire market for digital assets has been in a crypto winter in 2022, losing more than $1 trillion in value this year.

It seems like Musk is always in the headlines, even more so lately with the Twitter transaction. Besides bringing more attention to crypto, I believe there is a chance, no matter how small, that Bitcoin’s utility could receive a spark. There’s chatter that Twitter might incorporate micropayments into the platform, meaning that followers could support their favorite accounts by tipping them in crypto. If it’s Bitcoin, this has the potential to be a bullish outcome.

Using Bitcoin for micropayments could spur the further development of the Lightning Network, a Layer 2 scaling solution that is meant to speed up transactions to instant settlement, with virtually no fees. This looks like a no-brainer when it comes to tipping on Twitter.

Also, as he did with Tesla, Elon Musk could choose to add some Bitcoin to Twitter’s balance sheet. And after doing so, I’m sure he would tweet about this, which could cause Bitcoin’s price to pop. This would be welcomed by investors, as Bitcoin has tumbled 55% in 2022.

Ultimately, time will tell whether Musk’s takeover of Twitter will be a catalyst for the world’s top cryptocurrency. For now, investors will have to sit back and practice patience.

The newcomer

Michael Byrne (BNB): Dogecoin and Bitcoin immediately stand out as beneficiaries of Musk’s acquisition of Twitter. While BNB may initially seem out of place next to these two cryptos with well-documented ties to Musk, it could end up being the biggest winner of all.

BNB, previously known as Binance Coin, is the native token of Binance, the world’s largest cryptocurrency exchange. Binance invested $500 million in Musk’s acquisition of Twitter, making it the fourth-largest investor in the takeover. While Twitter’s future plans for cryptocurrency are undefined, it seems likely that Binance will have a say given its large stake in the company. Binance already said that it will help Twitter use blockchain technology to fight bots, and Chief Executive Officer Changpeng Zhao (better known simply as “CZ”) has offered up Binance Pay as a solution for integrating crypto payments into Twitter. In terms of helping Twitter wade further into cryptocurrency, CZ said, “We have the technologies, we have the know-how, we have the products, so we’re ready to help.”

If Binance becomes more deeply engaged with Twitter, it would give the crypto exchange even more visibility and could lead to significant user growth. Any rise in popularity for Binance would be good for BNB and its holders, as Binance allocates 20% of its profits toward burning, or eliminating, BNB tokens, which reduces supply and theoretically increases the value of the remaining tokens. More users should lead to more fees and more burning. Therefore, given Binance’s large investment in Twitter and the potential for deeper involvement with the platform, BNB looks like one of the key winners to come out of Twitter’s acquisition.

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Michael Byrne has positions in Bitcoin. Neil Patel has positions in Bitcoin. RJ Fulton has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin and Tesla. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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