Bitcoin (BTC / USD) was trading around 15% higher on Monday amid media speculation that e-commerce giant Amazon.com, Inc. (NASDAQ: AMZN) is months away from accepting digital currencies on its platform. In an interview with Invezz.com after the report, Lucas Outumuro, Head of Research at IntoTheBlock, said this may be a bit of an exaggeration.
Bitcoin Price Gains Amid Small Contraction
The price of Bitcoin rose “significantly” over the weekend and this can be attributed to sell-offs stemming from a small contraction, Outumuro told Invezz. He explained:
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The market had been positioned excessively lower, as shown by negative funding rates on perpetual swaps. The short contraction resulted in $ 900 million in short sell-offs and exacerbated the upward movement in prices.
Meanwhile, Amazon’s job posting for a digital currency and blockchain product leader has led many to conclude that Amazon’s ambitions in the cryptocurrency universe are genuine. However, Amazon has been hiring blockchain experts since at least 2018, so any interest in the space is not new, Outumuro said.
Amazon may not even hold onto Bitcoin
If the reports that Amazon accepts Bitcoin are accurate, there is no guarantee that the e-commerce company will want to keep Bitcoin on its balance sheet, Outumuro said. Many crypto payment platforms like BitPay can transfer incoming cryptocurrencies to fiat currency so that the recipient, in this case Amazon, eliminates the possibility of unwanted volatility. It is also ‘unlikely’ that Amazon will make use of machine learning algorithms, such as IntoTheBlock’s Predictions, to model the price of Bitcoin in the short term to guard against volatility.
Finally, Bitcoin’s role as a medium of exchange is “still unclear” given that the number of transactions has not increased during periods of low volatility, he said. Bitcoin’s falling inflation and upside potential as a store of value would restrict the number of people who would choose to spend the digital currency on their Amazon purchases.
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