Paige Aarhus

Bitcoin’s whiplash volatility is still a problem

Crypto markets were in a tizzy over the past week following rumours – later quashed – that Amazon was planning to accept bitcoin for payments.

Last Thursday, Amazon posted a job opening for a digital currency and blockchain lead, prompting a media frenzy that culminated with a report that the company would accept bitcoin payments by the end of the year.

Bitcoin prices had been declining since April, but they surged by almost 15 per cent to hit £29,000, before moderating to around £27,000 yesterday after Amazon denied the report, saying the speculation around specific plans for cryptocurrencies was not true.

Another roller coaster ride was to come, after Bloomberg reported yesterday that Mastercard is seeking to make it easier for consumers to buy, spend and hold cryptocurrencies. Start-ups that focus on crypto and digital assets are now eligible to join the company’s ‘Start Path’ programme, a type of incubator that gives young companies access to Microsoft executives and technology. Seven such companies have joined the programme so far, with Mastercard stating that part of the company’s role is to ‘forge the future of cryptocurrency’.

Regardless of the recent rumours, Amazon’s job posting indicates it is on a similar path, and both stories can be seen as evidence that major multinationals have accepted that cryptocurrencies will be a mainstream form of payment at some point in the future.

Nonetheless, bitcoin prices have been as low as £20,000 and as high as £45,000, just since January. The EU is chugging along with plans to make bitcoin transfers more traceable which possibly demonstrates a fundamental lack of understanding about how it works. But the whiplash volatility that has come to define the crypto space remains a key regulatory hurdle, and a major challenge to widespread adoption.

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