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.
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.