News has been circulating since yesterday that Amazon has entered into a new crypto partnership with Ripple.
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Although the news is not completely untrue, some clarity needs to be given about it to avoid it being misinterpreted.
Amazon’s official website and the news about the crypto partnership with Ripple
Indeed, on Amazon’s official website, a page was posted explicitly titled “AWS Partner Profile: Ripple.”
AWS stands for Amazon Web Services, and it is a subsidiary of Amazon that provides cloud computing services.
Even though AWS may seem to be merely a kind of frill for Amazon, it is instead responsible for most of the group’s profits.
The Amazon group turns over $500 billion a year, but has no profit. This is because total expenses are greater than revenues, although AWS is an exception.
Amazon Web Services makes $80 billion a year, but with almost $23 billion in profit. That is, if there were no AWS, the Amazon group would be deep in the red, whereas in this way it pays off almost all of its losses.
Therefore AWS is an essential part of the Amazon group, and a partnership with Ripple is something very important.
Crypto: the problem over the news between Amazon and Ripple
Although from all this the news that is circulating these days may seem correct, it turns out that this page was actually published three years ago, in June 2020. It has never been substantially changed since then.
What’s more, in December of that year Ripple was sued by the SEC, and although this lawsuit ended with XRP winning, the judge actually found Ripple guilty.
It is worth remembering that Ripple is the private company that created the cryptocurrency of the same name, which was later renamed XRP and became somewhat more decentralized.
So not only is this not new information, but it also dates back to a very different time in history than it does today.
Meanwhile, AWS has made huge strides in the crypto world, so much so that even in July it launched new tools.
The evolution of the crypto industry
The fact is that in these three years, which have also seen the beginning and end of a major new bull run, many things have changed within the crypto sector.
One of the biggest changes has been the boom of some new blockchains that in 2020 either did not yet exist or were still semi-literate.
The landscape has since changed completely, except for Bitcoin, with, for instance, Ethereum abandoning Proof-of-Work for Proof-of-Stake and the emergence of many second layers such as Polygon, Arbitrum, and Optimism.
In other words, what was meaningful in June 2020 may no longer be meaningful in September 2023, or may mean something different.
For instance, in August 2020, Ripple’s CEO declared that the company was following in the footsteps of Amazon itself, whereas today such a statement would seem merely nonsense.
AWS now collaborates with many different blockchains, and with several crypto partners, such as Avalanche with whom a partnership was formed in January of this year.
So not only is the news old, but its scope should also be greatly scaled back in light of what has happened since 2020, and especially in light of the current scenario, which is much richer in partnerships with crypto companies.
The role of XRP
The page on Amazon’s official website also mentioned XRP, imagining some possible use of it, for example to boost liquidity.
In June 2020, the price of XRP was about $0.2, rising to nearly $0.7 before the SEC lawsuit.
Later the price rose to $1.6 during the big bullrun of 2021, but only to return to $0.3 in June last year.
After the victory in the lawsuit against the SEC it had risen to $0.8, but has recently fallen back below $0.5.
The current value therefore is far higher than in June 2020, but is lower than in November of the same year.
It is worth noting that during the last bull run the peak has remained well below the all-time high of $3.8 touched in January 2018, and has now been hovering between $0.2 and $0.8 since May of that year, except during the 2021 bull run.