Despite Bitcoin's status as the world's most famous digital currency, Amazon has yet to accept it as a payment method, even though companies such as PayPal, Overstock, and Etsy do.

Here are reasons some people believe Amazon does not accept cryptocurrency and a way fo🎉r you to use yours to shop there.

Why Amazon Does Not Accept Bitcoin

Amazon has not provided explicit reasonsꩵ why it does not accept Bitcoin, but there has been plenty of speculation as to what the♌y might be.

Volatility, Regulation

The price of Bitcoin is more volatile than the price of many other government currencies accepted by Amazon, so there could be some challenges in terms of pricing products. The uncertainty about future cryptocurrency regulation might also be keeping Amazon at bay, as might the difficulty of processing returns considering Bitcoin's wild price fluctuations.

Current Agreements

It is possible that Amazon already has great deals in place with major credit card companies, such as Visa (V) and other payment processors. Smaller online retailers don't usually operate amid such favorable conditions, which creates a competitive advantage for Amazon.

Jeff Bezos

One theory is that Amazon founder Jeff Bezos is not a fan of Bitcoin, possibly because he is opposed to its unregulated and anonymous nature. This theory gained some traction after The Washington Post, which Bezos owns, published a particularly critical article in January 2016 titled "R.I.P., Bitcoin. It's time to move on." However, this, too, is purely speculative. Additionally, Andy Jassy took over as CEO of Amazon in July 2021, and Bezos' personal opinion of Bitcoin may hold less sway for Amazon in the future.

Digital Currency Rival

Another theory is that Amazon would like to eventually roll out its own digital currency. If that were the case, A🅰mazon would likely avoid lending credibility to Bitcoin or open up its huge market to a competitor. However, it has created🌸 the Amazon Managed Blockchain (AMB), which is designed for Web3 applications and development.

How to Make Amazon Purchases Using Bitcoin

Even though Amazon does not accept Bitcoin, it does accept gift cards. Amazon digital gift cards act just like U.S. dollars and can be applied to all product purchases. Some gift card hubs, such as Gyft and BitPay, let you pay for their digital cards with Bitcoin. This process adds steps and expenses, but it is the quickest workaround to a direct Amazon option.

Tax and Fee Considerations

It's important to understand the tax implications of using Bitcoin to make purchases because it can add to how much you spend. The Internal Revenue Service considers cryptocurrency property—and when property is sold, it is a taxable event.

When you use your Bitcoin to buy something, you create a taxable event, and your cryptocurrency will have appreciated or depreciated in price. If you use Bitcoin you've held for more than one year to buy a gift card, you trigger a capital gains tax event and will need to report it and pay the IRS if there is a gain. If there is a loss, you report a loss. If you've owned the bitcoin you spend for less than one year, it is a short-term capital gain or loss and must reported as a gain or loss in income.

You'll need to know how much you paid for it, including fees (called your adjusted basis), and base your tax reporting on that amount. How much you're taxed depends on your income in both scenarios.

You'll also need to pay network transaction fees when purchasing the gift card, which can vary depending on network traffic and the going rate. Additionally, you'll pay sales tax when you make the purchase on Amazon with the card.

So, when you use Bitcoin to buy an Amazon gift card and then use the card, you'll pay the following in addition to the purchase price of the items:

• Capital gains tax
• Network transaction fees
• Sales tax

The Bottom Line

Amazon, so far, has resisted the temptation to accept Bitcoin and other cryptocurrencies as payment for goods and services. However, you can use your cryptocurrency to make purchases on Amazon, but you'll need to buy a gift card first and use it to make the purchase. Keep in mind the additional taxes and fees you'll need to account for when buying a gift card with your crypto.