This week's Amazon cryptocurrency news would have some investors believe the retail giant is ready to accept crypto payments soon...
Amazon.com Inc. (Nasdaq: AMZN) registered three cryptocurrency domain names on Oct. 31, 2017: AmazonEthereum.com, AmazonCryptocurrency.com, and AmazonCryptocurrencies.com, according to CoinDesk.
Now, Amazon won't start accepting Bitcoin tomorrow.
But the online retail giant has developed its own virtual currency, and the registration of the domain names suggests that it's more than wishful thinking that Amazon could accept crypto payments in the future.
Amazon accepting Bitcoin and Ethereum would help increase the widespread adoption of cryptocurrencies. With more of the public feeling comfortable using cryptocurrencies for payments after the world's biggest online retailer begins accepting them, the demand for Bitcoin and Ethereum will increase.
The increased demand would send Bitcoin and Ethereum prices higher.
But the excitement is premature. Here's what Amazon's new websites really mean for cryptocurrencies...
What the Latest Amazon Cryptocurrency News Means for Investors
The purchase of the three cryptocurrency websites for Amazon could have been a defensive move.
"I caution that Amazon is overzealous when it comes to defensive domain name registrations. I believe that some of the registrations are done at arms-length by a brand protection agency," Andrew Allemann, of DomainNameWire.com, said on Nov. 1.
In 2013, Amazon bought "AmazonBitcoin.com," according to CoinDesk. Currently, that domain redirects itself to Amazon's website.
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There are challenges for such a huge publicly traded company to accept virtual currency payments.
Bitcoin prices can climb or fall double digits in days. On Sept. 13, the price of Bitcoin opened at $4,131.98. But by Sept. 15, Bitcoin prices opened at $3,166.30.
That's a 23% drop in two days.
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Bitcoin prices closed at $6,767.31 on Nov. 1, a 113% climb in a little over two months.
Those price swings mean customers might be unwilling to use Bitcoin to pay. If the price could surge another 100% in two months, then customers will hang onto their coins to profit instead.
However, Amazon is still making strides toward accepting cryptocurrency payments.
In 2013, the online retailer created its own virtual payment called "Amazon Coin."
The coin allows Android devices and Kindle tablets to purchase games on Amazon's app store. The coins operate like gift cards right now, and they can't be redeemed for cash.
And by registering these domain names, Amazon could be preparing to expand which currencies it accepts in the future.
While it could be years before Amazon accepts Bitcoin or Ethereum, cryptocurrency investors should take comfort in the fact that such a huge company is taking crypto payments seriously.
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