TikTok’s U.S. Pivot Boosts Bitcoin and Stock Markets
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TikTok, the popular social media app with over two billion downloads, has secured its future in the U.S. after avoiding a ban that was once a real possibility due to national security concerns. On Friday, CNBC reported that TikTok will continue its operations in the U.S. through a new joint venture with Oracle and interested investors. This deal comes after TikTok, owned by the Chinese company ByteDance, faced bans in countries like Canada and the U.S. as a result of fears of its relationship to the Chinese government and its compliance with China’s 2017 National Intelligence Law, a regulation that enhances intelligence gathering.
However, despite these issues, U.S. President Donald Trump has managed to delay the ban and negotiate a solution that involved creating a joint venture.
As it stands, the new partnership will include Oracle, Silver Lake, and other investors, who will hold 50% of TikTok’s U.S. operations, now called TikTok USDS Joint Venture LLC.
To this end, this announcement caused Oracle’s stock to surge, which helped drive a rally in both stocks and Bitcoin. The price of Bitcoin rose alongside the stock market, though the connection between the two is likely indirect.
TikTok’s New U.S. Venture and Data Control Concerns
TikTok’s new U.S. joint venture aims to address concerns over its Chinese ownership by creating a new algorithm focused on U.S. data. Rush Doshi, an expert from Georgetown University, pointed out that while the new system would be trained on U.S. content, questions remain about the control and ownership of the algorithm.
He raised concerns about whether the algorithm was still under the control of Beijing or if Oracle’s role was only to supervise the operation. Despite these questions, the deal has reassured many in the U.S. about the future of the platform.
The Ripple Effect and Bitcoin’s Performance
At the time of the announcement of the TikTok deal, the crypto market recorded a positive effect, and this includes Bitcoin, which rose to $88,007.63 (2.82%). However, it had dropped 2.41% over the week as trading volume also saw a slight decrease.
Meanwhile, the total market capitalization of Bitcoin rose to $1.75 trillion despite a fall in dominance to 59.55%.
Conclusively, Bitcoin futures open interest rose by 3.73% to $59.13 billion, as the liquidation rate decreased, amounting to $99.27 million.
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