Following the news of Tesla purchasing $1.5 billion worth of Bitcoin, many have wondered which major institution will be the next to take the leap into the crypto market. The popular choice among many is the world’s largest publicly traded company, Apple Inc.
With a market capitalization of $2.3 trillion, Apple could potentially create a massive new market for growth. Should it develop its Apple Wallet into a crypto exchange? A new report from RBC Capital Markets could be able to generate more than $40 billion from the cryptocurrency business. Which could also help to make the U.S. a technological leader in cryptocurrencies for the next decade or two.
“Apple’s install base is 1.5 billion, and even if we assume only 200 million users would transact, this is 6.66x larger than Square,” according to the report by RBC analyst Mitch Steves. “Therefore, the potential revenue opportunity would be in excess of $40 billion a year (15% incremental top-line opportunity).”
The report also noted that competition in the crypto exchange space is “light” and that research and development cost involved in an effort “would be de minimis in our view as Square’s entire R&D budget is under $1 billion.”
Apple Could Solve Regulatory Challenges Of Cryptocurrencies
Current regulations in the US make it difficult for customers in the country to purchase crypto and many exchanges are unable to handle high volume. The RBC analysts believe Apple could solve the regulatory and know-your-customer challenges of cryptocurrencies. If it created a closed system in which it only transfers the ownership of crypto between customers.
Apple could also develop an open system that uses a Bitcoin wallet and banking service Strike. Or Bitcoin’s Lighting Network to reduce the cost of converting fiat to crypto.
“If Apple went down this path the U.S.A. would likely acquire the most crypto assets from a global perspective. If the U.S.A. owns the most crypto assets (be it bitcoin or other assets), it would not make logical sense in our view to ban it. In addition, with Apple’s secure and world-class software, the U.S.A. would be able to have confidence in user information and balances if needed in the future.”
