How will the departure of Elon Musk from the post of CEO of Twitter affect the crypto market?

Elon Musk will leave the post of CEO of Twitter (the social network is blocked in Russia). He announced this on his social media account. He has served as CEO of Twitter since acquiring the social network for $44 billion in 2022. RBC Crypto.

Musk uses Twitter’s polling interface to get followers’ opinions on various social media policies. At the end of last year, he launched a poll about whether he should leave his post as head of the service. By a relatively small margin, the majority of the votes were positive. Musk joked that he would leave when he “finds some kind of madman” to replace him, and then he himself will move to the development team.

This “madman” eventually became Linda Yakkarino (Linda Yaccarino), head of the advertising department of NBCUniversal, which owns a network of television channels and several film studios. Musk said that it will start working “in about half a month.” He himself will move to the post of chairman of the board of directors and technical director of Twitter.

“New Stuff”

“Now you can take a break and focus on new things,” wrote the main developer of the cryptocurrency Floki Inu (FLOKI) under the pseudonym B Da Viking in a comment on Musk’s tweet. FLOKI is a popular memcoin named after the dog Mask, who included in the top 100 largest crypto assets with a capitalization of more than $300 million.

The “new things” probably mean integration into the interface of the social network of payments, including in cryptocurrencies, which Musk himself spoke about more than once. In late January, sources told the Financial Times that Twitter was already developing an embedded payment system and had started applying for the necessary licenses in the US. The payment system of the social network will be fiat, but built in such a way as to later integrate cryptocurrencies into it.

Judging by the history of Musk’s statements, he really does not leave hope for the integration of cryptocurrencies into the interface of the social network. If we take into account its previous global goals to develop a “super app” X (similar to the Chinese WeChat), we can allow the creation of some kind of ecosystem with internal support for cryptocurrencies, of which Twitter would be a part, says Nikita Zuborev, senior analyst at the aggregator.

“But if we consider Twitter separately, at the initial stage, Musk could introduce the function of sending money through direct messages, paying for subscriptions to paid content or Twitter Blue status for cryptocurrency. Any coins could be suitable for these purposes, so both bitcoin and the same Dogecoin (DOGE) could potentially benefit from such integration, ”the analyst argues.

Implementing a payment function on Twitter is one of Musk’s key goals, says Roman Nekrasov, co-founder of the ENCRY Foundation. In his opinion, it will turn the social network into a “more predictable and stable source of income”, and also add functionality that is not available in other social networks, which will attract new users and make the social network a more profitable asset in Musk’s portfolio.

Technically, the integration of crypto payments on Twitter can be implemented in partnership with a third-party crypto company, Nekrasov believes, for example, Coinbase, which already has a developed infrastructure – wallets, an exchange, business solutions and payment gateways.

“Another option is that Musk will acquire a payment gateway operator,” the expert suggests. “In any case, the main task is not just to introduce cryptocurrencies, but to allow those who do not have them to conveniently buy cryptocurrencies and also conveniently spend them within the social network.”

Despite Musk’s plans, the likelihood of introducing cryptocurrencies is still in question due to the “witch hunt” by US regulators, which has already provoked the departure of many large crypto companies to other jurisdictions, adds Zuborev. Perhaps one of the tasks of the new CEO will be to find a way to find legal loopholes for the safe introduction of cryptocurrencies into the social network, “but this is just our guess.”

Impact on prices

As the head of Twitter, Musk organically joined the cryptocurrency community, which settled on the platform at the stage of the birth of the crypto business. Musk participates in Twitter Spaces broadcasts with crypto influencers and comments on high-profile news in his personal account.

It is not uncommon for Musk’s tweets to cause significant jumps in the price of crypto assets that he mentioned directly or indirectly. The most popular of them is Dogecoin (DOGE). In a May 2021 tweet, Musk stated that he was working with the developers of Dogecoin to improve the efficiency of the system, which immediately led to a 22% increase in the Dogecoin price.

In December of that year, DOGE jumped 33% when Musk announced that the electric car maker Tesla would begin accepting the coin as payment for goods in an online store. Typically, these price spikes are short-lived as traders and automated bots start buying up the tokens Musk mentioned within seconds of his Twitter comments, in order to quickly sell them for a profit afterwards.

On Thursday, May 10, Musk tweeted a meme depicting an NFT from the Milady collection. The collection includes 10,000 images and was created in 2021 by the digital artist collective Remilia. Shortly after Musk’s tweet, she hit the top of the OpenSea trading platform – the price of one NFT at the peak reached $13.7 thousand in ETH cryptocurrency. The daily trading volume of Milady’s images on OpenSea exceeded $22 million. This is a tenfold increase compared to last week.

Musk gained a reputation as an influencer in the crypto community long before buying Twitter, explains Nekrasov. The change of position, in his opinion, will not have a negative impact on this reputation. Rather, a positive impact can be expected, as the position of CTO “is more in line with Musk’s role as an eccentric innovator.”

The head of Tesla influenced cryptocurrency rates through Twitter, while still not connected with the social network, so a purely technical change in position will not affect the weight of his statements, Zuborev agrees. If a sensible and efficient manager is at the head of the social network, he will be able to normalize the work of all services and take it away from associations with Musk’s manipulation of cryptocurrency prices, the analyst believes. Twitter will only benefit from this, and its importance, with the right combination of circumstances, can only increase.

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