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The Bitcoin price neared $40,000 over the weekend on rumors that Amazon.com Inc. (NASDAQ: AMZN) might start accepting crypto by the end of 2022. An anonymous tip told London newspaper City A.M. that Amazon might even develop its own coin.
For people following cryptocurrencies, this news might send mixed signals. On one hand, you're glad Bitcoin might see more adoption. On the other, Amazon producing its own coin represents the antithesis of Bitcoin.
You see, back in the 1800s, logging and mining companies would sometimes issue "scrips" as payment instead of legal tender. These were credits that could only be redeemed at company stores. It helped the companies ensure their low-wage workers wouldn't stray far for other work.
Now, if Amazon makes its own cryptocurrency, in addition to its control of online retail, it would add another layer to the perception of Amazon as a monopoly. This contradicts the broad vision of cryptocurrency as a decentralizing force providing freedom of choice for its holders.
Still, however, an "AmazonCoin" is nowhere to be seen thus far - let alone willingly adopted. And there's no way Amazon will build one better than Bitcoin.
Alongside efficiency and utility, adoption continues to be a major driver of the Bitcoin price and other cryptos. And rumors of Amazon adoption were not the only thing driving the price of Bitcoin this weekend.
Something else happened over the last week that will sustain Bitcoin over the long term. This more concrete move instills confidence that Bitcoin can continue to grow regardless of what Amazon does...
A Bigger Bitcoin Price Catalyst
Everyone knows Bitcoin had a rough year, climbing to all-time highs above $63,000 then crashing back under $30,000 in less than six months.
Cryptocurrency is volatile. Long-term Bitcoin holders know this. Today, we're seeing more recent Bitcoin adopters shuffle in and out of their positions depending on what Elon Musk tweeted that day.
Meanwhile, "Hodlers" (those long on Bitcoin) pay attention to long-term Bitcoin signals. And we got one last week. It also happens to involve Twitter Inc. (NYSE: TWTR), though it's not a mere "tweet."
TODAY'S BEST CRYPTO BUYS
Three tiny digital coins are gearing up for a rally. One trading for around $12 could deliver a 638% profit by the end of 2021.
TODAY'S BEST CRYPTO BUYS
Three tiny digital coins are gearing up for a rally. One trading for around $12 could deliver a 638% profit by the end of 2021.
Twitter founder Jack Dorsey has long been an outspoken fan of Bitcoin and decentralization. He's a vocal advocate on the social media site. But he also walks the walk.
Dorsey also founded a payment platform called CashApp that started accepting Bitcoin back in 2018. CashApp is the subsidiary of a financial services company called Square Inc. (NYSE: SQ), also founded by Dorsey. CashApp continues to be popular with users. It made $4.04 billion revenue in Q1 2021. Square said $3.51 billion came from Bitcoin services.
If you've shopped anywhere that takes cards, there's a good chance you've swiped your card through a Square machine. The goal of Square was to make magnetic stripe card reading easier with smaller, cheaper, and ergonomic readers.
You can hook a lightweight Square device to most phones and tablets. Compare that to a traditional credit card processing - a clunky, heavier piece of hardware that does not integrate with cloud systems so easily.
A Square reader fits inside your pocket. You can start accepting card payments for a lemonade stand on the spot.
Now, think about what you get when you combine a point-of-sale payment system connecting to tablets and smartphone that also takes Bitcoin.
That's just one possibility for what Dorsey just announced. Square offers much broader financial services including loans and online payroll. With that in mind, here's where Square might be headed with its latest idea...
Square's New Bitcoin Platform
Dorsey recently shared that he would create an entire new Square subsidiary alongside Cash App and Tidal. This one, called "TBD," will be entirely Bitcoin- and decentralization-focused.
It's not clear yet what this platform will do. But Dorsey said the platform will make it "easy to create non-custodial, permission-less, and decentralized financial services."
Square already runs a platform called Square Crypto, through which developers can build open-source Bitcoin projects. A key difference between Square Crypto and TBD, says Dorsey, will be that Square will "own" more of TBD and control its direction. Right now, Square only funds Square Crypto with no direct input.
Square enlisted Mike Brock to lead strategic development of the TBD project. Brock was previously at Red Hat, another successful open-source technology maker, which is a good omen for future open-source projects at Square.
So far it seems that Square is passionate about decentralization and the potential of Bitcoin to play a central role in that movement. This is different from what investors hear when Amazon says it has a new cryptocurrency on the way. And as we hear more about this project, we could see the Bitcoin price soar.
Square has invested $170 million in Bitcoin in 2021. It announced in early July that it was working on a hardware wallet.
The bottom line is that more Bitcoin products is good news for the Bitcoin price. In addition, continued interest in Bitcoin from one of the most noteworthy entrepreneurs of the 21st century will continue to drive the Bitcoin price to new highs over the next few months.
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About the Author
Mike Stenger, Associate Editor for Money Morning at Money Map Press, graduated from the Perdue School of Business at Salisbury University. He has combined his degree in Economics with an interest in emerging technologies by finding where tech and finance overlap. Today, he studies the cybersecurity sector, AI, streaming, and the Cloud.