Elon Musk has said that X (formerly Twitter) is rolling out a chat feature with “bitcoin style encryption.” The feature dubbed XChat would have features like encryption and vanishing messages to enhance safety, and would let users share files. Here’s everything we know about the feature that’s still in beta mode and why Musk’s description of the service has some users perplexed.

In a post on X, Musk said, “Through XChat You can do audio/video calls without a phone number across all platforms.” He added that “This is built on Rust with (Bitcoin style) encryption, whole new architecture.”

X Launches Chat Feature in Beta Mode

Meanwhile, many are perplexed by Musk describing the feature as “encrypted” like Bitcoin, as the cryptocurrency itself is not encrypted. Samson Mow, CEO of Bitcoin technology company Jan3, who is working on crypto adoption by nation states, is among those countering the Tesla CEO.

Mow shared an analysis of his post by Grok, which says, “Musk’s mention of “Bitcoin-style encryption” likely refers to the use of cryptographic principles like those in Bitcoin, but Mow’s response underscores the technical distinction, emphasizing the importance of precise terminology in tech discussions.”

Some others see the term more as a marketing ploy rather than the actual feature of XChat. According to security researcher Ian Miers, “Bitcoin primarily uses signatures, not encryption. It’s like saying, we decided to drive our rocket on water, as NASA uses Hydrogen and Oxygen.”

Musk Wants to Make X an “Everything App?

Musk has long talked about making X an “everything app” like WeChat that offers many different features, including digital banking and payments. The microblogging site has been in the news (mostly for the wrong reasons) ever since Musk bought it in 2022. Despite Musk’s aggressive cost cuts, which included firing nearly three-fourths of the company’s employees, X is reportedly still posting losses.

While we don’t have exact figures since X is a privately held company now, the company is estimated to have posted revenues of $2.5 billion last year. The number is half of what it was in 2021, which was its last full year as a publicly-traded company.

X’s valuation has plummeted since Musk acquired that company for $45 billion in 2022. Earlier this year, the company was valued at $33 billion net of debt when Musk merged it with his artificial intelligence (AI) startup xAI. After accounting for debt, X was valued at $44 billion, which is just about $1 billion lower than what Musk originally paid for the company.

That valuation was way higher than the $9.4 billion that Fidelity valued the company for in late 2022. However, the xAI and X merger was basically Musk merging two of his companies, so it’s likely that the valuation was not judged by an independent third party.

Musk tried several tactics to try to turn the app around, including a paid blue tick subscription to revive X’s fortunes, but these measures haven’t been very successful so far. The chat feature could be yet another step towards increasing X’s appeal, and it remains to be seen how successful that initiative becomes.

Musk’s Political Activities Took a Toll on His Companies

Musk’s political activities have undoubtedly taken a toll on Musk’s companies, especially Tesla, which is the only publicly traded company in his vast business empire. During the Q1 2025 earnings call in April, the billionaire acknowledged that there has been “blowback for the time that I’ve been spending in government.” The company’s sales fell YoY for the first time last year, and Q1 2025 was no different, with sales falling 13% to the lowest since 2022.

While it hasn’t released consolidated data after Q1, the company’s sales in Europe plunged in May, with Norway being the only shining star where sales rose over 200%. The company’s sales in the Chinese market have also fallen in the first eight weeks of Q2.

Even X suffered a massive outage late last month after a data center glitch.

Musk Steps Back from Politics

Meanwhile, Musk ended weeks of speculation and stepped down from the Department of Government Efficiency (DOGE) at the end of May when his 130-day tenure as a “special government employee” ended. While Trump has said that Musk is “not exactly leaving,” the relations between the two don’t seem as warm as they were a few weeks back.

Musk has of late been critical of the administration’s policies, saying he is “disappointed” with Trump’s tax bill, which he said “undermines” the cost cuts he delivered as DOGE head. Trump also canceled the nomination of Musk’s associate, Jared Isaacman, to lead NASA after a “thorough review” of the tech billionaire’s “prior associations.”

Musk has since blown up against Trump, making multiple extremely inflammatory statements against him and threatening to decommission SpaceX’s Dragon project.

It’s worth noting that Musk was a part of Trump’s advisory team in his first tenure but withdrew after the President pulled the US out of the Paris Climate Deal. This time around, Trump withdrew from the Agreement on the very first day of his presidency, but Musk stayed put in the team.

Many allege that Musk (and his companies) benefited greatly from the billionaire’s association with Trump, and as part of DOGE, he eliminated positions and funding at agencies that were investigating cases against his companies, such as the NLRB.

Trump’s Policies Benefited Tesla

Some of Trump’s actions were also seen as favorable to Tesla, and the President is in the process of fully eliminating the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP), which was auditing Tesla. Trump also eased US self-driving rules, which would benefit Tesla, which is set to launch its robotaxi service in Austin later this month. However, Trump has also pushed to eliminate EV subsidies that were benefitting Tesla substantially, which may have helped drive Musk’s crash out.

Whether or not Trump directly rewarded Musk directly for his support, Musk added billions of dollars to his net worth after Trump’s election as Tesla shares skyrocketed to record highs in December 2024. Musk donated over $270 million to Trump’s campaign, and at Tesla’s peak last year, his net worth had surged by a whopping $170 billion since the election, making it one of the best investments of all time. In his furious attacks on the President, he even claimed that Trump wouldn’t have won the election without his help.

Musk Is Now Spending More Time At His Companies

Musk is at least publicly saying that he is spending much more time at his companies than in the White House these days. The XChat feature is the first significant new initiative that we have seen from the social media company in a long time. Neuralink has also closed a $650 million funding round. As for Tesla, the company is now focusing on the robotaxi rollout, which Musk has confirmed is on track for a June launch. The company would compete with Alphabet-backed Waymo there, which is already offering its robotaxi service in partnership with Uber.

The robotaxi launch would be yet another test for Tesla’s autonomous driving capabilities, but take Musk’s claims with a grain of salt. He has promised countless delivery dates for fully autonomous driving, and so far, none have come to pass.