Why did Binance invest $500M in Musk’s deal with Twitter?

Binance TRX

Binance invested $500 million in the Musk-Twitter deal, believing the businessman could turn the social media platform into a hub for “free speech.”

The world’s largest cryptocurrency exchange – Binance – was one of Elon Musk’s financial supporters in his multi-million dollar acquisition of Twitter, contributing $500 million.

Its CEO, Changpeng Zhao (CZ), believes that the social media platform will eliminate many problems, such as spam comments and fraudulent accounts, with Musk at the helm.

Twitter should benefit from the new regime

After lengthy discussions and drama between the two sides, the world’s richest man, Elon Musk, officially acquired Twitter last week for the original offer of $44 billion. Prominent companies in the cryptocurrency sector, such as Binance, Fidelity and Sequoia Capital, supported the deal by injecting hundreds of millions.

In a recent interview, CZ argued that Twitter will become a much better platform and give cryptocurrencies “a seat at the table when it comes to freedom of expression.” Being at the helm of such a company is not an easy task, but Elon Musk has shown that he can withstand pressure, the executive added.

According to the Chinese, Twitter has numerous problems, including bots that spam comments, scammer accounts and, in general, “it has not been managed well:”

“I think Twitter hasn’t been monetized well, it hasn’t grown well, there are a lot of tactical problems like bots that spam comments, there are scammer accounts there.”

Still, the platform has “huge value in and of itself,” and with Musk on top, “we’re very confident,” CZ concluded.

Musk’s plans for Twitter

The Tesla CEO fired some of Twitter’s top executives, including Parag Agrawal, Ned Segal and Vijaya Gadde, upon taking ownership. He also promised to solve the platform’s problems with fake accounts by urging users to pay for verification.

Not long ago, Musk signaled his intentions to turn Twitter into an “everything app,” where people can message each other, make peer-to-peer payments, shop online, and even hail a cab.

Considering its support for the first meme coin Dogecoin, some assume that the token will play a vital role in the future development of Twitter. After all, Musk’s most prominent companies – Tesla and Space X – accept DOGE as a means of payment.

The memecoin has been one of the best performers since the acquisition of Twitter. It was trading at about $0.07 (on the day of the trade), while it is currently hovering around $0.15, that is, an increase of a whopping 115%.