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Prices for Bitcoin, Ethereum, Dogecoin and other cryptocurrencies surged on Monday amid speculation that e-retail giant Amazon will soon start accepting cryptos as a form of payment.
While Bitcoin prices saw a rise of 13% to 20% or more in recent trading, Dogecoin, another popular cryptocurrency that has soared in value in 2021 (even though it started out as a joke), was also up nearly 14% early on Monday. Other virtual currencies, such as Cardano, Ethereum and XRP, were up 10% or more as well.
The widespread leap in crypto prices is apparently stemming from the recent appearance of a new job listing at Amazon for a digital currency and blockchain product lead — and more specifically, speculation about what this new position could mean for cryptocurrency usage at the world's largest e-retail site, and for acceptance of cryptos in general.
Amazon has not officially announced intentions to start accepting Bitcoin or other cryptocurrencies as forms of payment on its site. (In fact, after the initial reports, Amazon released a statement denying that it is looking to accept cryptos by the end of the year.) But the digital currency position it is hiring for falls under the Amazon Payment Acceptance & Experience Team according to the ad. The online rumor mill is anticipating that Amazon will begin accepting cryptocurrencies as payment by the end of 2021, and that perhaps the company will try to launch its own cryptocurrency in 2022.
For the time being, the practical uses for Bitcoin and other digital currencies remain limited. Bitcoin is accepted by select retailers and can be used to purchase certain gift cards and debit cards, but it's generally difficult to pay for everyday goods and services with any digital currency.
One reason it's complicated for retailers like Amazon to accept Bitcoin as payment is that its value is highly volatile. It's essentially a speculative investment whose price can and often does fluctuate more quickly and to greater extremes than the U.S. dollar and other mainstream physical currencies. For the same reasons it's difficult if not impossible to figure out the best time to buy Bitcoin, it's hard for a company to accept it as payment when it's unclear how much the virtual currency will be worth at any given time.
To demonstrate how volatile cryptocurrencies can be, one unit of Bitcoin was worth roughly $10,000 at this time last year. It tripled in value by the end of 2020, and then leaped to over $60,000 in April 2021, before retreating below $30,000 again earlier this month.
Bitcoin and other cryptocurrencies would become instantly much more practical if Amazon begins accepting them as forms of payment. And the ramifications would not be limited just to Amazon and things you can buy on its site.
Amazon has always been a trendsetter pushing the envelope in retail. The company's longstanding practice of undercutting other retailers on prices has raised the bar in the fierceness of online shopping competition, and the growth of Amazon Prime and its free shipping perks has forced other retailers to make free shipping easily available to online shoppers.
If Amazon starts accepting cryptocurrencies as payment, retail competitors like Walmart, Target, Best Buy and others will be under immense pressure to do the same. And as Bitcoin and other cryptos become more accepted and mainstream, they could very well become a lot more valuable than they are now.