Jack Dorsey on Bitcoin and Twitter's Future

Twitter's Future Plans Include Bitcoin Integration

Jack Dorsey, the CEO of Twitter, has communicated to investors that bitcoin will represent a significant component of the company’s future direction. He foresees opportunities to incorporate the cryptocurrency into current Twitter offerings and services, encompassing areas like commerce, subscription models, and newer features such as the Twitter Tip Jar and Super Follows.

Dorsey's Long-Standing Support for Bitcoin

For several years, Dorsey has been a dedicated proponent of bitcoin. However, the specific implementation of this support within Twitter’s platform had previously lacked detailed explanation. He has consistently expressed his enthusiasm for the cryptocurrency publicly, describing it as reminiscent of the “early internet era” and asserting its paramount importance in his professional life.

Recently, Dorsey collaborated with Jay Z to establish a $23.6 million bitcoin fund. Furthermore, he announced intentions to guide his other company, Square, into the decentralized finance sector utilizing bitcoin. Square also completed the acquisition of a majority stake in Jay-Z’s TIDAL music streaming service this year, with a focus on the potential of blockchain technologies and cryptocurrencies to revolutionize the music industry.

Key Trends Shaping Twitter's Trajectory

Dorsey identified bitcoin as one of three crucial trends for Twitter’s future, alongside Artificial Intelligence (AI) and decentralization. Twitter is actively pursuing decentralization through its “Bluesky” project.

During Twitter’s second quarter earnings call, Dorsey highlighted the potential of bitcoin to accelerate the company’s product development and expansion. He stated that it is the most viable candidate to serve as the “native currency” of the internet. (Notably, Square’s initial $50 million bitcoin investment in 2020 had increased to $253 million by February 2021, prompting a further $170 million purchase earlier this year.)

Benefits of a Native Internet Currency

“Should the internet possess a native currency, a globally accessible one, we would be empowered to expedite the development of products like Super Follows, Commerce, Subscriptions, and Tip Jar,” Dorsey explained. “This would allow us to connect with every individual worldwide, rather than adopting a fragmented, market-by-market strategy.”

He continued, “I believe this is a substantial aspect of our future. Beyond currency itself, there is considerable potential for innovation, particularly as we strive to decentralize social media and provide enhanced economic incentives. Therefore, continued exploration and aggressive investment in this space are critically important for Twitter and its shareholders.”

First Public Discussion of Product Integration

A Twitter representative confirmed that this marks the first instance of Dorsey publicly discussing the integration of bitcoin into Twitter’s product roadmap.

Dorsey also acknowledged that Twitter would not be alone in exploring cryptocurrency strategies, referencing Facebook’s support for the Diem digital currency.

“The necessity for this is evident, and its value is recognized. I believe an open standard, native to the internet, is the optimal approach, which is why our focus will ultimately be on bitcoin,” he stated.

Strong Earnings and Future Outlook

Twitter reported robust earnings during a period of pandemic recovery, achieving its fastest revenue growth since 2014, as reported by CNBC. This performance resulted in a 9% increase in Twitter shares during extended trading. The company’s Q2 revenue reached $1.19 billion, exceeding Wall Street’s expectation of $1.07 billion, with $1.05 billion originating from its advertising business.

User Growth and Challenges

Earnings per share were 20 cents, surpassing the anticipated 7 cents. However, monetizable daily active users (mDAUs) – a metric created by Twitter – only reached 206 million, representing an 11% year-over-year increase, slightly below the analysts’ projection of 206.2 million.

The company attributed this shortfall to a slower news cycle and the easing of stay-at-home orders in many U.S. communities, potentially impacting Twitter usage during the quarter.