Finance

Bitcoin tumbles from $40,000 high after Amazon denies crypto plans

Cryptocurrencies lost ground after spike in momentum as e-commerce giant Amazon denied speculation that it planned to develop its own token, causing a sea of red across the board.

“Notwithstanding our interest in the space, the speculation that has ensued around our specific plans for cryptocurrencies is not true,” said an Amazon spokesperson, following a report which also suggested the firm was planning to accept cryptocurrencies such as bitcoin as payment for products.

“We remain focused on exploring what this could look like for customers shopping on Amazon,” the firm added.

Bitcoin, which briefly rose above the $40,000 mark in its first major rally in weeks on 26 July, lost as much as 6% following the statement. The token landed at a fall of around 4%, taking its value to $37,060 as of 8:30am BST on 27 July.

Meanwhile ether has fallen 7% in the past 24 hours to $2,198, while cardano slipped 8.4%, dogecoin fell 10.6% and stellar fell 7.6%.

READ  Bitcoin bounces above $39,000 as Binance limits crypto leverage

Part of the speculation was fuelled by a job advertisement posted by Amazon earlier this month, in which the firm sought a specialist in digital currency and blockchain technology.

Bitcoin’s recent rise to $40,000 had been propelled by a rash of liquidations in crypto futures, in addition to the Amazon speculation and announcements from crypto exchanges FTX and Binance that they planned to limit customer leverage positions on crypto tokens.

Binance chief executive Changpeng Zhao said the firm’s decision to limit leverage had been taken “in the interest of consumer protection”, following scrutiny of its business and use of regulated products by several watchdogs around the world.

Separately, electric vehicle firm Tesla announced it had taken a bitcoin-related impairment of $23m in its second quarter, as a result of its holding the cryptocurrency on its corporate treasury. The business said the value of its holdings had reached $2.48bn in March, though the price of bitcoin has fallen more than 40% since that time.

“It’s hard to see a $23m write-down in the value of the group’s bitcoin hoard as anything other than an unnecessary own goal,” said Nicholas Hyett, equity analyst at Hargreaves Lansdown.

READ  Bitcoin holdings top $43bn across global investment funds

Though Tesla shares had risen following the publication of its results on 26 July, the subsequent bitcoin tumble knocked its gains in after-market trading.

“Although Amazon has scores of openings for blockchain specialists, it was the listing for a digital currency and blockchain product lead that has led to heightened speculation that crypto currency payments could be integrated on its platforms,” said Hargreaves’ Susannah Streeter.

“The sensitivity of crypto coins and tokens remains stark, and given the uncertain landscape ahead, with central banks looking to develop their own digital coins, investors should be wary of speculating with money they can’t afford to lose.”

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To contact the author of this story with feedback or news, email Emily Nicolle

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