The bursting of the ad-funded bubble of social media is creating huge ripples in the market. Meta Platforms Inc. is less valuable than Home Depot Inc., Snap Inc. is worth less than Deutsche Bank AG (which wrote its IPO), and Twitter is now privately owned by Elon Musk, for nearly a decade. Post-cumulative stock-market underperformance.
However, the disappointing sight of Dogecoin jumping 100% in hopes of a more cryptocurrency-oriented direction for Twitter, suggests that we are a long way from a new model that can help humanity or is it really “ The “decentralized” ambition that Musk has expressed for his newly acquired platform token received another boost on Tuesday when Musk tweeted a photo of a Shiba Inu wearing a Twitter T-shirt.
While Dogecoin’s current price is a tad lower than last year’s all-time high, when extreme pandemic irrationality swayed the crypto-desperate from backing Musk’s token, its theoretical market capitalization of $15 billion suggests that the speculative habits of billionaires. Hardly die in the midst of – Worshiping devotees.
The narrative described in crypto circles is that Musk’s previous vocal support for Dogecoin will lead to the integration of the token into Twitter as a payment method. According to a statement, the additional impetus comes from the fact that crypto exchange Binance – which helped fund Musk’s acquisition – is forming a team to look at “how blockchain and crypto could be helpful to Twitter”.
It doesn’t matter whether this is all theoretical at present, or Dogecoin has glaring flaws that will only come to light when it gains traction. The rule of the follow-the-herd “mimic” investing is to dance until the music stops, which is only a matter of time before Dogecoin jumps and slips past. One doesn’t need to be a rocket scientist for this to work. Rather than needing to build up a collection of tokens to spend in the future, the scramble to buy now is expected to get in and out at the right time. Other memecoins have rallied in sympathy.
A common case is that injecting a payment model into social media can be a good thing for beaten tech stocks as advertisers hold back and inflation bites. If part of the problem with today’s ad-funded tech empires is that users and their data are products, then some form of model for payment may provide an alternative. If rewarding users, sending payments to friends or paying for verifications — as one report suggests — supports more content moderation, more data privacy, and a healthier user experience on Twitter, it might be worth a try. Capable.
But Dogecoins are not dollars. They require artificial speculative stimulation to gain value. And, rightfully so, Twitter was a very useful place to spread the word. A crypto-famous “Dogecoin Millionaire” – who is no longer a millionaire, given his entry point when he began building his stash of tokens – is one of the great wealth predictors driven by Musk’s overhaul.
For all of Musk’s promises to improve humanity, he has yet to say how he can clear the network’s swamp of crypto marketing, propaganda and scams – which, along with NSFW content, has been a huge source of activity. is, according to Reuters. And despite the gospel of decentralization, there would be nothing disruptive about sticking a digital crypto wallet on top of Twitter.
Like Meta’s increasingly painful attempts to jam the crypto-fueled Web3 model into an old social-media jar, it suggests that even billionaires find it difficult to abandon established business models. Twitter co-founder Jack Dorsey’s decentralized project BlueSky has been in development for years; Social media rival Mastodon is more established but has yet to outdo the incumbent, although its backers include Dogecoin co-creator Jackson Palmer.
What is happening with Dogecoin is a depressing sign of things to come, given the pitfalls of cryptocurrency pumps, as Musk’s online personality cult becomes a supernova. Helping humanity goes a long way, without predetermining what happens next with Twitter.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Lionel Laurent is a Bloomberg Opinion columnist covering digital currencies, the European Union and France. Prior to this, he was a reporter for Reuters and Forbes.
This story has been published without modification in text from a wire agency feed.
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