RBD analyst: Apple should launch own crypto exchange

After the electric vehicle maker Tesla announced Monday a $1.5 billion purchase of bitcoin, a Wall Street analyst runs the math on whether Apple might benefit from entering into cryptocurrency, too.

RBD analyst: Apple should launch own crypto exchange. Apple Park in Cupertino, California
Apple Park in Cupertino, California

Nathan DiCamillo for coindesk:

A new report from the brokerage firm RBC Capital Markets posits that Apple, which already provides payments wallets for millions of consumers in an economy that’s gone increasingly cashless since the coronavirus pandemic hit in early 2020, might be able to easily generate more than $40 billion from the cryptocurrency business. The company’s move could also help to make the U.S. a technological leader in cryptocurrencies for the next decade or two.

The RBC analyst, Mitch Steves, figures that the payments firm Square (SQ) generates about $1.6 billion per quarter in bitcoin-related revenue on an active install base estimated at around 30 million.

“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. “Therefore, the potential revenue opportunity would be in excess of $40 billion a year (15% incremental top-line opportunity).”

Competition in the crypto exchange space “is light,” the analysts wrote. Regulations make it difficult for U.S. consumers to purchase crypto, and many of the exchanges go down during times of high volume, they wrote.

Apple could solve the regulatory and know-your-customer (KYC) challenges of cryptocurrencies if it created a closed system in which it only transfers the ownership of crypto between customers, the analysts noted.

MacDailyNews Take: Apple, known for privacy and security, would certainly led an air of legitimacy to cryptocurrency, along with generating a nice tonnage of $40+ billion a year, based on Steves’ math. The full article contains the RBC report here.

14 Comments

  1. It would be the cherry of the steady corporate adoptions of BTC as part of their treasuries.

    Apple and BTC are where security/privacy are advocated. Perfect union.

  2. From my cursory understanding, the US Constitution gives the federal gov., no one else, monopoly power to create new money. It legally contracts out the creation of all new money to the Federal Reserve Bank private contractor.
    Is criptocurrency newly-created money or not? If it’s new, its creation is unconstitutional, hence against the law. Such operators are outlaws and should be apprehended and imprisoned.
    On the other hand, folks buy cryptos using the Fed’s traditional money and is used like buying a product so the cryptos are not new money, hence Constitutional, thus legal.

    I have to conclude that Capitalists who think that they can bypass paying federal taxes on the crypto product by using greenbacks — paper or electronic — are irresponsible tax avoiders.

    1. If it’s illegal money, one would have to ask the Office of the Comptroller of the Currency why they recently permitted banks to hold crypto? Tax law also mandates crypto gains be taxed as any capital gain. I guess we can assume the Fed is complicit with the enabling of an illegal currency, by allowing within the frameworks mentioned?

      Who are the Capitalists that think they can bypass paying Federal taxes? I’ll posit it includes the same community that thinks they can sidestep taxation, regardless of the medium/process. (It’s not clear about the crypto/greenback transaction you mention).

      Like gold, dollars (in the US) are used to purchase. When sold, dollars are received. Any possible gains are taxable. Anyone can dismiss the legal obligation to report the gain. Both gold & crypto purchasers will have the same amount of fun, if/when they are caught NOT reporting gains.

      Of course, there’s no question that Socialists would sidestep such illicit behavior and, thus always pay their taxes. In fact, they always give a healthy portion of gains to their favorite political candidates, or labor unions (except police). Unfortunately, it’s a small slice of Socialists (the Bolshies) that have the assets to make such a luxury purchase. The others are too busy working hard in the fields to meet Central’s productions goals for the 1, 5 and 10 year periods. They know the State is serving their best interests.

      1. I am thinking that crypto is fundamentally just another Capitalist consumer product; Folks purchase it with new money issued by the fed. It is made artificially scarce to control its high price like de Beers does with diamonds which are otherwise plentiful.

        1. “Artificial scarcity” is an inherent requirement of all currencies, not just bitcoin. If you could just print up all the dollars you want at home, you wouldn’t want dollars at all, would you?

        2. Artificial scarcity is being used incorrectly here and there’s no comparison to diamonds.
          Scarcity has been engineered into BTC and there will be no extra BTC in the back room to pull out when prices are really juicy…like your diamonds example. Scarcity and supply aren’t the same thing, btw.

          If BTC is some “Capitalist consumer product” (weird notion), then gold would fall into the same bucket. The two function with similar scarcity/store of value characteristics…in-spite of one being digital.

          “Belongs to US Capitalism” What the h? Where do I go to meet with the the leader of Capitalism? How about it’s regulated by American law?

          You think just like a statist…a “capital consumer product_belongs to US Capitalism.”
          It must be hard to get away from the Central Govt owning products and businesses?

    2. Last I looked there are a lot of marks, won, pounds and Euros being freshly made by different governments. I guess they can expect an invasion soon. Tongue in cheek of course.

      Loved the comments you made a way back, put a real smile in my face.

      1. LOL, yeh, “How dare they make their own sovereign currency that really belongs to US Capitalism. They are stealing our right to create that new money.”

        1. REPHRASE: “LOL, yeh, ‘How dare they make their own sovereign currency that really belongs to US Capitalism. They are stealing our right to create that new money thus weakening the US which is the same as an attack. We need to strike preemtively.’”

  3. Yeah, apparently wherever Tesla goes, Apple needs to follow. This is only proving Elon Musk is definitely the driving force behind Tesla’s value. Apple really is just a follower at this point and it’s understandable why big investors feel Tesla is worth more than Apple. I know nothing about BitCoin or any other cryptocurrencies, but as much news as Tesla was getting for investing in BitCoin I just figured analysts and other financial experts would say how great it was for Tesla to be investing in BitCoin currency.

    I find it rather disappointing how Tesla can move faster than Apple, but I suppose that’s what happens when a company gets over a certain size. Everything Apple does will happen in slow-motion. I’m sure that whatever Tesla does, even if Apple attempts to duplicate it, it’s not going to benefit Apple as much as it will Tesla. Thanks to Elon Musk, Tesla has huge investor mind-share which Apple doesn’t have. It appears as though Tesla will move to $1000 before Apple moves to $150. Musk absolutely has the Midas Touch.

  4. Your obsession with TSLA, especially repetitively comparing to Apple, needs to be put to bed.
    If it’s kept alive, please bring a new realization to the table…elucidate us with a new pertinent discovery.

    Or, dump your AAPL and give a big financial hug to the man you envy from afar…buy TSLA.
    Buy a lot of it.

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