Crypto researcher: Bitcoin surge shouldn’t be traced to Amazon report
- Bitcoin price gained around 15% amid an unforimed media report involving Amazon.
- An Amazon insider reportedly said the company will accept Bitcoin and other digital currencies soon.
- IntoTheBlock Senior Analyst Lucas Outumuro told Invezz Bitcoin gains are due to a short squeeze.
Bitcoin (BTC/USD) was trading around 15% higher Monday amid media speculation that e-commerce behemoth Amazon.com, Inc. (NASDAQ: AMZN) is months away from accepting digital currencies on its platform. In an interview with Invezz.com following the report, Lucas Outumuro, Head of Research at IntoTheBlock, said this may be a bit of a stretch.
Bitcoin price gaining amid short squeeze
Bitcoin’s price increased “significantly” throughout the weekend and this can be attributed to liquidations coming from a short squeeze, Outumuro told Invezz. He explained:
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The market had been overly-positioned to the downside as shown by the negative funding rates in perpetual swaps. The short squeeze resulted in $900 million in short liquidations and exacerbated the price move upwards.
Meanwhile, Amazon’s job posting for a Digital Currency & Blockchain Product Lead has led many to conclude 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 on to Bitcoin
If reports of Amazon accepting Bitcoin are accurate, there is no guarantee the e-commerce company would even want to keep Bitcoin on its balance sheet, Outumuro said. Many crypto payment platforms like BitPay can transfer incoming cryptocurrencies to fiat so the recipient, in this case Amazon, eliminates the possibility of unwanted volatility. It is also “unlikely” that Amazon would make use of any machine-learning algorithms, like IntoTheBlock’s Predictions, to model Bitcoin’s price over the short term to hedge against volatility.
Finally, Bitcoin’s role as a medium of exchange is “still unclear” given the number of transactions hasn’t increased during periods of low volatility, he said. Bitcoin’s decreasing inflation and potential upside as a store of value would restrict the number of people who would opt to spend the digital currency on their Amazon purchases.