Bitcoin collapse fears as Jeff Bezos and Amazon 'secretly creating rival cryptocurrency'

Last weekend, Bitcoin's value slumped by as much as 15 percent amid a number of concerns surrounding regulation, and power outages which limited mining. Bitcoin fell 10.1 percent to $54,000 (£39,000) as of 7.30am in New York on Sunday, after declining as much as 15.1 percent to $51,000.51 (£37,000) in the Asian market at the same time. This came after the cryptocurrency had reached a new all-time high value just last week – $62,000 (£45,100) last Tuesday. While Bitcoin values are well-known for being volatile, its year-on-year value has continued to increase, making it a huge phenomenon.

However, Amazon CEO Jeff Bezos could be launching a plan with the potential to disrupt Bitcoin's progress.

It was reported in February that Amazon is working on a new virtual currency that users could spend on its platforms.

This is according to job adverts that the company has put out for its 'Digital and Emerging Payments (DEP)' division.

The adverts indicated that the company is in the process of developing a system which lets customers “convert their cash into digital currency”.

The post said: “We are building a tech team to build innovative payment products for customers in emerging markets.”

It indicates that the virtual money could be used for shopping as well as services like Prime Video.

The adverts were later removed, as reported by Tech Radar at the time, who also said the project will launch in Mexico first.

Secrecy has surrounded the reported plans as Amazon has not made a public comment on the proposed digital currency system.

It would not be Amazon’s only digital coin project as the tech giant has already started working on Amazon Coins – designed to offer users discounts on purchases on Kindles and Fire tablets. It is not clear if the two projects are linked.

Mr Bezos is planning to step down as Amazon CEO in June.

Billionaire entrepreneur Elon Musk had sparked a Bitcoin frenzy in February after his company Tesla bought $1.5billion's (£1.1billion) worth of the cryptocurrency.

READ MORE: London told to slash red tape and embrace Bitcoin as City moves on

In a stock market filing, Tesla said it had "updated its investment policy" and was therefore looking to invest in "reserve assets" such as digital currencies, gold bullion or gold exchange-traded funds.

The move was a big driver behind the cryptocurrency's surge in recent months.

Tesla added following its announcement: “Moreover, we expect to begin accepting Bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt.”

Giles Coghlan, chief currency analyst at HYCM, told earlier this year that Bitcoin is a huge risk and should be approached with caution.

He said: "When you see an asset and think, 'Wow this can only go one way' – that is a recipe for either making a fortune of losing a fortune.

"What I'd say is yes, you can invest in cryptocurrencies. I would advise all clients against using heavy leverage and manage their risks.

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"Know exactly how much of your capital is at stake at any one time and have a clear exit plan.

"In my line of work you see people do disastrous things if you don't understand how leverage works, which is the use of borrowed money to take on greater risk."

Britain’s Financial Conduct Authority (FCA) warned investors of the risks that come with Bitcoin following the recent slump.

They said: “If consumers invest, they should be prepared to lose all their money.

"Some investments advertising high returns from crypto assets may not be subject to regulation beyond anti-money laundering.

“Significant price volatility, combined with the difficulties valuing [Bitcoin] reliably, place consumers at a high risk of losses.” does not give financial advice. The journalists who worked on this article do not own Bitcoin.

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