Apple Should Launch Own Crypto Exchange, RBC Analyst Says
b'Apple Should Launch Own Crypto Exchange, RBC Analyst Says Apple (AAPL), the maker of hot-selling items from iPhones to tablets, is the world\\u2019s largest publicly traded company, with a market capitalization of $2.3 trillion. \\n\\nSo it almost seems natural that after the electric vehicle maker Tesla announced Monday a $1.5 billion purchase of bitcoin, at least one Wall Street analyst is running the math on whether Apple might benefit from jumping into the cryptocurrency fray. \\n\\n\\nA 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\\u2019s 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\\u2019s move could also help to make the U.S. a technological leader in cryptocurrencies for the next decade or two. \\n\\nThe 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\\u2019s install base is 1.5 billion, and even if we assume only 200 million users would transact, this is 6.66x larger than Square,\\u201d according to the report. \\u201cTherefore, the potential revenue opportunity would be in excess of $40 billion a year (15% incremental top-line opportunity).\\u201d\\n\\nAccording to the report, the research and development cost involved in the effort \\u201cwould be de minimis in our view as Square\\u2019s entire R&D budget is under $1 billion.\\u201d\\n\\nApple\\u2019s install base is 1.5 billion, and even if we assume only 200 million users would transact, this is 6.66x larger than Square,\\u201d according to the report. \\u201cTherefore, the potential revenue opportunity would be in excess of $40 billion a year (15% incremental top-line opportunity).\\u201dApple 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. \\n\\nIt could also develop an open system that uses a bitcoin wallet and banking service Strike or the Bitcoin blockchain\\u2019s Lighting Network to reduce the cost of converting fiat to crypto, they added.\\n\\nApple standing up a crypto exchange could also reduce the likelihood the U.S. bans bitcoin in the future, the analysts said. \\n\\nAccording to the report, the research and development cost involved in the effort \\u201cwould be de minimis in our view as Square\\u2019s entire R&D budget is under $1 billion.\\u201d\\n\\nCompetition in the crypto exchange space \\u201cis light,\\u201d 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.\\n\\nCompetition in the crypto exchange space \\u201cis light,\\u201d 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.'