Elon Musk could have bought 1 million bitcoins and created a new social network instead of buying Twitter

This week, Elon Musk, the richest man in the world, spent $44 billion buying Twitter. However, this is a risky move, especially since the purchase was not made for a profit. So maybe it would have been better if Musk had used that amount to buy Bitcoin.

Before accepting the offer, Musk had already explained his real reasons for taking advantage of this acquisition. For the CEO of the giants Tesla and SpaceX, Twitter is a “sort of public square”, reflecting his concern for free speech.

“What I’m saying is this is no way to make money. My strong intuitive sense is that having a public platform that is both extremely credible and broadly inclusive is extremely important for the future of civilization. I don’t care about the economy at all.”

Despite having a fortune of $243 billion in assets, Elon Musk had to borrow from banks to make the purchase. In a video published Tuesday (26), journalist Fernando Ulrich highlights the details of this transaction and points out the risks.

“12.5 billion margin loans, backed by Tesla stock, and it’s no small feat that he’ll have to pay to guarantee this loan, it’s about 1/3 of his Tesla position,” said Fernando Ulrich. “So even for the riskiest man in the world, he’s risking significant equity to fund this transaction.”

Finally, Ulrich explains that Twitter’s revenue is terrible compared to other social networks, such as Facebook. Going further, it also points out that Musk could take a “margin call” if Tesla shares fall about 43%.

It would have been better to have bought Bitcoin

While Elon Musk’s latest tweets set likes records, with two reaching over 3 million, this acquisition doesn’t seem economically sensible, as noted above.

With this 44 billion, Elon Musk could have bought 1 million bitcoins at the current price (excluding market liquidity). To be precise, it would be 1,095,032 bitcoins. So there would be 95,032 BTC (R$18.8 billion) left, which would be enough to build a social network from scratch.

As an example of this, the billionaire himself pointed out on Wednesday (27) that Truth Social, a platform created by Donald Trump, is better than Twitter in the Apple Store.

“Truth Social is currently outpacing Twitter and TikTok in the Apple Store.

Truth Social (terrible name) exists because Twitter has censored free speech.

Truth Social (terrible name) exists because Twitter has censored free speech

— Elon Musk (@elonmusk) April 27, 2022

So not only did Musk pay $44 billion to buy a social network that hasn’t worked for 10 years, he also had to take unnecessary financial risks. Perhaps it would have been better to have invested in Bitcoin, if only the 21 billion he took out of his own pocket, enough to amass more than 500,000 bitcoins.