Bitcoin Falls From $40K After Fake Amazon Pump, Company Denies Rumors About Accepting BTC

Bitcoin Falls From $40K After Fake Amazon Pump, Company Denies Rumors About Accepting BTC

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Amazon admits that it is exploring cryptocurrencies and blockchain but denies a report from a London tabloid that it plans to accept bitcoin as payment this year or launch its own cryptocurrency by 2022.

An anonymous insider at Amazon said the e-commerce giant would start accepting bitcoin and other cryptocurrencies by the end of the year, City A.M. reported. Some cited this as a reason for bitcoin’s price rebound on Monday to more than $40,000 after plunging below $30,000 last week.

A growing number of companies have started accepting cryptocurrencies as payment, bringing an asset class into the mainstream that was shunned by major financial institutions a few years ago.

Tesla CEO Elon Musk said last week that the electric-car maker will probably resume accepting bitcoin as payment once it resolves the energy intensity of the mining process.

The report set the crypto community on fire and bitcoin climbed nearly 11 percent on Monday to $40,539.39 on what some are calling a fake Amazon pump, only to plunge back down to a 24-hour low of $36,419.39 after Amazon denied the rumors.

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Others attributed the bitcoin price increase to a short squeeze driven by people who had bet that bitcoin would go lower and then had to quickly sell to cover their positions. 

Prices have been rallying since Wednesday, July 21 with Sunday showing the largest daily gain in six weeks. Heading into the weekend, some analysts said they expected a short squeeze to push bitcoin above the 50-day moving average around $34,000 given oversold conditions on the charts, Coindesk reported.

“A short squeeze setup,” bitcoin analyst Willy Woo tweeted Friday @woonomic. On Sunday, Woo confirmed it: “And folks, we have our squeeze.”

The City A.M. report spread across social and new media but Amazon has since denied the rumors in an email statement sent to Coindesk.

“Notwithstanding our interest in the space, the speculation that has ensued around our specific plans for cryptocurrencies is not true. We remain focused on exploring what this could look like for customers shopping on Amazon,” an Amazon spokesperson said.

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Bloomberg credited speculation over a crypto-related Amazon recruitment ad as one reason for the surge in the bitcoin price. Amazon advertised a job opening on July 22 seeking an executive to develop the “digital currency and blockchain strategy.” The product lead will “own the vision and strategy for Amazon’s Digital Currency and Blockchain strategy and product roadmap.” Analysts discussed whether the move means Amazon will start accepting bitcoin as payment.

While Amazon has denied the reports from the City A.M. insider, the company’s new job listing shows that it has some interest in cryptocurrency or blockchain, The Street reported. 

Bitcoin’s price gains began to dissipate after Bloomberg published Amazon’s denial, Coindesk reported. Bitcoin was trading at $38,456.53 as of this writing.

The Amazon spokesperson’s comment suggests that the company “is testing the waters, even if the reports of the company diving in were overstated,” Coindesk reported.

City A.M.’s source said that Amazon has been working on a full-on plan to accept crypto as payment since 2019 and that it would be an integral part of the company going forward.

“This isn’t just going through the motions to set up cryptocurrency payment solutions at some point in the future – this is a full-on, well-discussed, integral part of the future mechanism of how Amazon will work,” the source said. “…and the directive is coming from the very top… Jeff Bezos himself.” 

The plan involves more than bitcoin, the source said. “Ethereum, Cardano and Bitcoin Cash will be next in line before they bring about eight of the most popular cryptocurrencies online. It won’t take long because the plans are already there … This entire project is pretty much ready to roll.” After all the big cryptos are integrated, Amazon plans to develop its own native token, the source said.

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