Forget Dogecoin, this crypto could be the even bigger winner from Elon Musk's Twitter takeover

Behind the scenes, this crypto may be ready to play a more important role in the future of Twitter than Dogecoin.

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Key points

  • Dogecoin has surged more than 100% over the past week following the completion of Elon Musk's takeover of Twitter 
  • Behind the scenes, BNB, Binance's native token, may have more long-term upside and a more direct involvement in the future of Twitter

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

In perhaps one of the least surprising rallies of all time, Dogecoin (CRYPTO: DOGE) surged more than 100% during the past week based on news that Tesla (NASDAQ: TSLA) chief executive officer Elon Musk, an outspoken Dogecoin proponent, finally completed his takeover of Twitter on Friday, taking the social media platform private after a drawn-out legal process.

Dogecoin has been rallying as its enthusiasts surmise that Musk could make the original meme coin an integral part of the platform, such as enabling its use for payments. This could very well happen, but there's a much larger cryptocurrency that could play a more central role in Twitter's future. Here's why BNB (CRYPTO: BNB), which is up about 20% over the past week, could be the real long-term winner here. 

What is BNB? 

Created with Highcharts 11.4.3Dogecoin PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

BNB, which until recently was known as Binance Coin, is the native token of Binance, the world's largest crypto exchange by volume. BNB is the fourth-largest cryptocurrency by market cap, with a valuation of $52 billion. 

Created with Highcharts 11.4.3BNB PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

CZ and Elon 

While Elon Musk's affinity for Dogecoin is well known, it is mostly surface-level, while his ties to Binance and its influential CEO Changpeng Zhao, known simply as "CZ" in crypto circles, runs deeper and may end up ultimately being much more meaningful.

CZ confirms that Binance has invested $500 million in Musk's $44 billion takeover of Twitter, joining a host of other top tech funds and investors.

This makes Binance the fourth-largest investor in the venture, meaning that the exchange has a significant stake in the platform's success and that it should have plenty of influence on Twitter's future endeavors, especially when it comes to incorporating cryptocurrency.

If Dogecoin becomes a means of payment on Twitter, it seems likely that BNB would play some role here as well.

Furthermore, Binance will seek to help Twitter with a number of measures. CZ says that Binance has a team of engineers dedicated to helping Twitter fight bots and that it will work to help Twitter enter the world of web3. 

A spokesperson for the exchange told Decrypt that "Binance is creating an internal team to focus on ways that blockchain and crypto could be helpful to Twitter and actively brainstorming plans and strategies that could help Elon Musk realize his vision".

Burn BNB, burn

As the native token of Binance Exchange, Binance Coin harbors more appeal than Dogecoin beyond their mutual links to Twitter's new ownership.

For example, while Dogecoin is inflationary and has a near-infinite supply, BNB is deflationary because Binance Exchange uses proceeds from the exchange to "burn" or retire a portion of BNB every quarter. Binance has previously committed to using 20% of exchange revenue to burn BNB. You can think of burning as similar to a publicly traded company buying back some of its shares outstanding. Buying back these tokens and taking them off of the market theoretically has the benefit of making the remaining tokens more valuable.

Recently, Binance completed its 21st quarterly burn, torching $547 million worth of BNB. Binance has said that it will continue to engage in these quarterly burns until 50% of BNB is removed from the circulating supply. 

Is BNB or Dogecoin the better buy?

While Dogecoin could very well play a role in the future of Twitter, it looks like BNB is likely to be the better longer-term bet based on its deflationary nature and its central role in the world's largest crypto exchange, which gives it some tangible value and upside as Binance continues to grow. Its deepening ties to Elon Musk and Twitter could also be an interesting catalyst.

Ultimately, BNB and Dogecoin are speculative investments that are best suited for risk-tolerant investors. However, BNB looks like the better long-term investment thanks to its central role in the Binance ecosystem, Binance's Twitter stake, and BNB's superior tokenomics compared to Dogecoin.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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