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Yes. Normally muffins are made with a melted fat because there is no need to aerate it (as there is for cupcakes which have a light, airy crumb structure). Coconut Oil will work perfectly in muffins!
I haven't tried this yet with muffins, but I have it with one of my fav cookie recipes for comparisons sake. Overall: there was an ever-so-slight coconut flavor in the final product (more like a scent than flavor -- it was delightful, actually). But, I definitely noticed that the results were dryer & crumblier, and that this got more noticeable on day 2+.
Doesn't it matter that the fat content is different between butter and oil? Butter is usually around 80% fat while coconut oil is 100%.
Maybe it would make more sense to use 80% coconut oil, 20% liquid like milk or water to balance it out and keep the muffins from being too oily.