BTC and Twitter: what to expect from their cooperation?

    10 Aug 2021

    Twitter CEO Jack Dorsey has announced plans to integrate Bitcoin into Twitter’s existing products and services. In terms of mass societal acceptance, this could become a decisive breakthrough for the first cryptocurrency.

    Twitter CEO Jack Dorsey says his company plans to implement BTC support in several of its products and services, including subscriptions and e-commerce. He believes that the use of Bitcoin will become a “large and significant part” of Twitter’s business model and one of three key growth areas for the company. The other two are developing artificial intelligence (AI) and decentralization.

    As TechCrunch points out, BTC can be used for internal trading within a social network, paying for subscriptions or specific service features, such as Twitter Tip Jar or Super Follows. In any case, the decision would grant all 1.3 billion registered and 192 million daily (active) Twitter users the ability to use Bitcoin. We are seeing a colossal market being created before our eyes, which opens up additional opportunities for the mass adoption of cryptocurrency.

    Jack Dorsey himself has repeatedly stated that Bitcoin is the best possible global currency for the worldwide network. Here is one of his recent remarks on the topic: “There’s an obvious need for this, and appreciation for it. And I think that an open standard that’s native to the internet is the right way to go, which is why my focus and our focus eventually will be on Bitcoin. “

    Cryptocurrencies, though, are hardly a novel discovery for Jack Dorsey. The IT businessman has an “alter-ego” as the CEO of Square, a payment systems developer. In early May, Square published a financial report for the first quarter of 2021, according to which it gained $ 3.5 billion from BTC investments.

    Square last invested in Bitcoin in February 2021, when the company bought cryptocoins to the tune of $ 170 million at a median price of $ 51,000. Before that, it had purchased bitcoins in October 2020.

    Cryptocurrency accounts for about 5% of Square’s total reserves and is becoming an increasingly important business for the company. For example, Square recently reported a three-fold increase in the revenue of its BTC selling service. Square currently owns 8,027 BTC worth about $ 320 million in total.

    The company’s financial papers were released on August 1, and they show that in the second quarter of this year, $ 2.72 billion worth of bitcoins were sold through the Square Cash App. For comparison: in 2020, the second quarter brought the company only $ 875 million. The net gain from trading BTC went up from $ 17 million to $ 55 million.

    However, it’s not all smooth sailing. Compared to the first quarter of 2021, revenue in the second was not as impressive. A period from January to April of this year saw the sale of $ 3.51 billion BTC with a net profit of $ 75 million. The company ties a slight decrease in volumes with the overall cooling of the cryptocurrency market. Keep in mind that Bitcoin price corrected in May and is currently below its all-time highs.

    Now Square has also posted a $ 45 million impairment loss on its high-price Bitcoin investment. However, this does not prevent them from making big plans, including those related to cryptocurrencies and their integration into fiat payments. Recently it became known that Square is buying the Australian payment firm Afterpay for $ 29 million. The deal will be closed in the first quarter of 2022. Following the completion of the merger, Jack Dorsey’s company expects to increase its profit and user base.

    For Square, the most significant is the possibility of introducing the BNPL (buy now, pay later) principle of paying for goods in installments. This, by the way, is one of the most profitable areas for the development of fintech startups.

    Afterpay allows users to pay for goods in four interest-free payments, and the goods can be picked up immediately after checkout. Customers only pay commission if they miss an automatic payment. The profit is derived from sellers who pay commissions for the chance to provide this service.

    Afterpay boasts 16 million buyers and about 100,000 sellers worldwide. Dorsey believes the new acquisition will allow his company to make the financial system more advanced, fair, and inclusive by providing attractive services to consumers and sellers.

    But I would venture to guess that Jack Dorsey’s real idea is to find the best form of integrating Twitter, Square, Afterpay, and Bitcoin capabilities (and customer bases). If such a model is created and proven viable, it will be a real breakthrough in e-commerce. And at the same time – a powerful “positive charge” for the BTC price.

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