Since Elon Musk founded his first renowned startup X (later became known as PayPal) in 1999, he floated the idea of fintech digital transformation for a while now. Last year X (formerly known as Twitter) made a sensation when it announced plans to launch a peer-to-peer payment service to “revolutionize 2024.”
As of now, X Payments is registered in at least 32 states, and Musk is not willing to curb his ambitions: “When I say payments, I actually mean someone’s entire financial life,” he reportedly said in a leaked audio from a corporate meeting.
In Musk’s vision, X users will be able to send money to others on the platform and extract those funds to authenticated bank accounts. The company claims it will launch peer-to-peer payments this year, to unlock “more user utility and new opportunities for commerce,” suggesting a tie-in with other X products, like creator revenue sharing and online shopping. The X Platform also promised continued investment in creators, content partnerships, original content and full-funnel.
In 1999, Musk co-founded X.com, an online financial and email payment company, merging with Confinity to create PayPal in 2001. EBay acquired PayPal for $1.5 billion a year later, making Musk the largest shareholder at 11.7%.
As Musk took over as PayPal’s CEO in 2000, aiming to expand its services, a power struggle with co-founder Peter Thiel led to Musk’s removal during his vacation. Thiel became CEO, and the company was officially renamed PayPal in 2001, with Musk retaining the original “X concept” in his thoughts.
The story of Musk’s involvement with PayPal may offer insights into what we can anticipate from his latest financial venture, and the connection goes beyond just a shared name. In his 2023 announcement, Musk stated, “Twitter was acquired by X Corp to ensure the freedom of speech and as an accelerant for X, the everything app. This is not simply a company renaming itself but doing the same thing.”
Evidently, Musk aims for us to perceive the transformation of the X platform as more of a merger than a rebranding, with the ultimate objective of constructing a financial ecosystem within a super app, leveraging the existing Twitter user base. This ambitious plan aligns with Musk’s current stance on crypto, but the reality may present challenges.
Brief history of Musk’s crypto impact
In 2019, the CEO of Tesla, Elon Musk, commended Bitcoin’s structure as “quite brilliant.” Later, adding #Bitcoin to his Twitter bio resulted in a 20% surge in its value. The momentum continued when Tesla announced a $1.5 billion Bitcoin purchase and plans to accept BTC as payment.
However, concerns over Bitcoin’s energy consumption prompted Musk to suspend BTC payments for Tesla products, leading to a 40% price drop. Musk views DOGE as “the people’s coin,” influenced by conversations with Tesla and SpaceX workers. Despite DOGE doubling in value during the crypto winter, Musk’s impact waned.
In February 2021, Musk’s expressed concern about DOGE’s concentration triggered a 20% drop. A notable event unfolded on April 1, 2021, as Musk tweeted about SpaceX putting a Dogecoin on the moon, propelling DOGE from $0.06 to an all-time high of $0.73 in a month. He later expressed his preference to the dog meme coin, as opposed to Bitcoin, on numerous occasions. Currently, DOGE is accepted as payment for official Tesla merchandise.
How likely is X to go full crypto?
In a leaked call, Musk suggested the development of a financial ecosystem within X’s platform, potentially triggering a significant surge in crypto adoption, reminiscent of the impact PayPal had in late 2020. Musk stressed a holistic strategy, asserting, “If it involves money, it’ll be on our platform. Money or securities or whatever.”
During a recent Xr Space event, Elon Musk discussed various aspects of the future world with Cathie Wood, CEO of Ark Invest, including financial markets, AI and cryptocurrency. Musk also drew parallels between the monetary system and an information system, acknowledging its challenges and emphasizing the need to address issues, aligning with cryptocurrency principles.
Although Musk is leaning toward focusing on fiat money, he still considers the potential addition of cryptocurrencies later, according to Financial Times sources close to the company. The exact details are currently undisclosed, including specifics about functionality and the official launch date. However, signs suggest that cryptocurrencies will play a role, given X’s recent development of a tool in partnership with eToro, enabling users to access cryptocurrencies, stocks and various financial assets.
Big Tech companies often find regulatory requirements burdensome, causing them to abandon initiatives due to the long-term investment, risk and the need for a robust compliance infrastructure with constant licensing requirements. If we consider the company’s hint about launching the payment system in mid-2024, it is improbable that crypto integration will occur before late 2024.
DOGE army on brink of price war
In past interviews, Musk favored Dogecoin over Bitcoin for payments, even expressing interest in implementing DOGE as a payment method on Twitter before acquiring the company. The possibility of cryptocurrency integration into the X platform gained attention on April 4, 2023, when the iconic blue bird logo was briefly replaced with DOGE. This move caused a 10% surge in the DOGE price, leading to discussions about potential market manipulation.
Historically, DOGE experienced surges based on Musk’s comments. For instance, in April, Musk teased DOGE payments on Twitter, proposing it as an option for Twitter Blue, the site’s subscription service.
The year-long DOGE price history reveals significant spikes, triggered by hints and rumors about Dogecoin’s potential inclusion in the X payment system. These hints primarily came from Musk’s cryptic tweets and his account location set to “DOGE.”
The incorporation of Dogecoin into X’s payments system holds significant promise for the meme-inspired cryptocurrency. The anticipated collaboration with X Payments could offer new opportunities not only for Dogecoin, but for the crypto community in general.
While awaiting official confirmations and dealing with uncertainties, the mere prospect of Dogecoin being part of X has ignited enthusiasm and discussions in the crypto community in general. As for the DOGE army, it seems their speculation pumping activity is doing well without the technical integration into the platform.