Although Bitcoin stands as the most renowned digital currency worldwide, Amazon does not yet permit its use for transactions, unlike platforms like PayPal, Overstock, and Etsy.

Many ponder the reasons behind Amazon’s hesitance to embrace cryptocurrency and explore alternatives for utilizing Bitcoin on their shopping platform.

Specific reasons for Amazon’s refusal to integrate Bitcoin have not been disclosed; however, speculation abounds regarding potential causes.

Current Agreements

Amazon possibly benefits from advantageous contracts with leading credit card companies like Visa and other payment processors, offering conditions typically unavailable to smaller retailers and hence giving Amazon a competitive edge.

Volatility and Regulation

Pricing challenges may arise from Bitcoin’s high volatility compared to many government-backed currencies Amazon accepts. Additionally, the lack of clarity in future cryptocurrency regulations could deter Amazon, coupled with the complexity of managing returns amid Bitcoin’s price swings.

Digital Currency Rival

Concepts that Amazon envisages creating its proprietary digital currency exist. If true, endorsing Bitcoin might undermine Amazon’s prospective currency and open its vast consumer base to rivals. Nonetheless, Amazon has developed the Amazon Managed Blockchain (AMB) for Web3 applications and development, indicating interest in digital currency technology.

Jeff Bezos

A school of thought suggests Jeff Bezos may have been skeptical about Bitcoin, possibly due to its unregulated and anonymous attributes. This narrative gained momentum when The Washington Post, a paper Bezos owns, published a critical January 2016 column titled “R.I.P., Bitcoin. It’s time to move on.” However, this theory remains conjectural. With Andy Jassy at Amazon’s helm since July 2021, Bezos’ viewpoint might wield less influence over Amazon’s future cryptocurrency policies.

Practical Use of Bitcoin on Amazon

While Amazon doesn’t directly take Bitcoin, it does accept gift cards, which function like traditional currency for all purchases. Sites like Gyft and BitPay allow Bitcoin payments for these digital cards. Though this process introduces extra layers and costs, it provides a feasible solution in place of direct Amazon interaction.

Understanding the tax repercussions of using Bitcoin for shopping is crucial, as it can impact total spending. The IRS classifies cryptocurrency as property, meaning transactions involving it result in taxable events.

Using Bitcoin to acquire goods triggers a taxable event, affecting your cryptocurrency’s value. If Bitcoin held for over a year is used to buy a gift card, a capital gains tax event occurs, necessitating reporting and potential IRS payment if gains are realized. Conversely, a loss would need to be recorded. Should the Bitcoin be owned for less than a year, short-term capital gains or losses must be reported as income adjustment.

Knowledge of your initial purchase cost, including fees (adjusted basis), is essential for tax calculations. Tax rate variation depends on income levels in both scenarios.

Purchasing the gift card requires payment of network transaction fees that vary based on network demand and current rates. Furthermore, sales tax applies when the card is used on Amazon.

Therefore, when buying an Amazon gift card with Bitcoin, and subsequently using it, expect to incur these additional costs alongside the item’s price:

• Capital gains tax
• Network transaction fees
• Sales tax

Amazon, without explanation, currently sidesteps direct cryptocurrency payments.

As of November 9, 2024, Amazon remains closed to Bitcoin acceptance.

Numerous merchants, establishments, and enterprises welcome Bitcoin payments. Check the accepted payments page to determine if your favored venues are among them.

Up until now, Amazon has refrained from adopting Bitcoin and other cryptocurrencies for transaction purposes. To utilize cryptocurrency for Amazon purchases, one must initially buy a gift card, then use it at checkout. It’s vital to factor in the additional taxes and fees when securing a gift card with cryptocurrency.