Apple and Bitcoin – how it could disrupt the industry
In 2020, large companies and institutions really started to get into Bitcoin. Now Tesla invested $ 1.5 billion in cryptocurrency and is working on plans for let customers pay with when buying EVs. While Apple often takes a step back and looks before embarking on something new (iPod, iPhone, etc.), I think now is the time for Apple to switch to Bitcoin / cryptocurrency – here are four ways in which the company could do so and potentially disrupt the industry.
In October 2020, Square Inc. (payment processing application, Cash application, etc.) invested $ 50 million in Bitcoin (CTB). This was around 1% of the company’s total assets at the end of Q2 2020 (for reference, this has grown fourfold since then to over $ 200 million at the time of writing). The move came after the Cash app offered the ability to buy Bitcoin for several years.
An even bigger investment in BTC has been made by Microstrategy over the past year with the company’s CEO, Michael Saylor. put over a billion dollars in cryptocurrency. And most notably, Saylor likely played a role in Elon Musk and Tesla investing $ 1.5 billion – with what started as a conversation on Twitter in December.
The big picture here is that more and more companies and institutions are looking to Bitcoin for long-term investments and asset preservation, which the bulls of Bitcoin believe will lead to more stability and, naturally, at an increased value.
There is certainly a risk to investing in Bitcoin, but there is also a very big upside potential. Apple of all companies has the ability to tolerate risk, and even putting in just 1% of its cash would equate to a $ 2 billion investment in Bitcoin. In particular, the analysis of Ark Investments sees Bitcoin grow to $ 70,000 per coin if US companies invest 1% in it and to $ 400,000 per coin if companies invest 10% in cryptocurrency.
The bullish case here is that investing the available money in Bitcoin is a way to preserve / grow the money (BTC is growing over 100% per year at this point) while the USD is losing some. value over time. In turn, this preserves the wealth of shareholders. This line of thinking is based on the fact that Bitcoin has a known and limited supply of 21 million coins and the fundamentals of supply and demand (if people and businesses keep investing in them).
Michael Saylor thinks Tesla, Apple, Google, etc. will need to transfer their money to Bitcoin. Notably, the video below is from December 23, before Tesla made the jump to BTC.
Apple and Bitcoin: 4 Ways to Switch to Cryptocurrency
Apple has been publicly optimistic about cryptocurrency in the past. In 2019, vice president of Apple Pay Jennifer Bailey said “we are monitoring cryptocurrency” and that “We think it’s interesting. We believe it has good long-term potential.
Place money in the cash register
So Apple has undoubtedly been researching and planning what to do with Bitcoin / crypto for quite some time. When it comes to Apple investing its own cash, I think that’s a no-brainer. 1% of that amount would be $ 2 billion and be an easy way to start. That probably wouldn’t alarm Wall Street / traditional investors being such a small percentage and with Tesla and Apple both investing in them, the measures would spur many more companies to do the same. The 1% mark would be in line with Apple’s financial MO
I don’t think Apple is likely to put much of its money into Bitcoin all at once – as Michael Saylor might advocate. But he could put himself in a position to make huge gains if he transfers, for example, 5 or 10% of his $ 207 billion in cash to Bitcoin. But with a history of being financially conservative, Apple could make a bigger initial bet on this next aspect of crypto …
Apple cryptocurrency exchange
I think the other side of Apple’s adoption of Bitcoin will be the integration with iOS. Major players like Square and PayPal are already offering the ability to easily buy Bitcoin in their apps, and Apple has stepped up its financial offerings over the past two years.
Of course, there has been good progress with the adoption of Apple Pay, but things have gotten more focused in the fintech space for the enterprise with Apple Cash and Apple Card.
Apple offering the ability to buy and sell or better yet send and receive P2P Bitcoin directly in iOS could be a game-changer.
In fact, RBC Capital Markets (via CNBC) believes that if Apple enters the cryptocurrency forex market, it could disrupt and potentially own the market.
“If the company decides to go into the crypto exchange business (multi-billion dollar industry), we believe the company could immediately gain market share and disrupt the industry (while still making the United States a crypto leader for the next 10 to 20 years), ”RBC Capital Markets analyst Mitch Steves said in a note to clients Monday.
RBC believes that could mean $ 40 billion in revenue a year for Apple, which would be a huge boost to the company’s service portfolio. Additionally, RBC believes that if Apple were to buy $ 1 billion worth of BTC it could create a lot of momentum with an Apple Exchange.
iPhone as a crypto wallet
Bitcoin has so far been a bit messy when it comes to the public understanding how it works and how to buy it. For beginners or small amounts, it’s easy to buy through Cash App, PayPal, Robinhood, etc. These apps allow you to buy BTC with USD. However, these apps do not offer a full cryptocurrency exchange like Coinbase and others where you can send and receive as well as buy and sell.
And for those who really want to buy and hold crypto like Bitcoin, they do so with hardware called a cold wallet for maximum security. It is usually a stand-alone device the size of a USB stick like Trezor or register. But the problem here is that it’s mostly tech-savvy people who know or are willing to learn how it all works.
But with Apple’s hardware expertise with iPhone and its secure enclave, the company could have a huge opportunity to create one of the world’s first secure cryptocurrency wallets integrated into a smartphone that is easy for users to adopt (Samsung has done this with several of its Galaxy S series smartphones, but it has not been widely adopted and integrates with the third party Gemini exchange). Apple could have a big advantage by having its own exchange as well as offering the iPhone as a cold storage wallet.
Apple recently shared its more than a billion active iPhones worldwide. This could mean a massive increase in adoption around the world if Apple is able to combine its security expertise with usability to make almost everyone feel comfortable and confident getting started with Bitcoin and getting started with Bitcoin. other cryptocurrencies.
Accept Bitcoin as a payment method
It will be interesting to see how Tesla fares with its plans to allow customers to buy its electric vehicles and other products with Bitcoin. This is another major element in the adoption of cryptocurrency by more and more people.
If Apple at some point allows its customers to buy Apple products with Bitcoin, that could be a major factor for other companies to follow suit.
I think a move like this is more likely to happen after bringing Bitcoin to iOS and Apple has invested some of its money in crypto. This will involve a lot more leg work with the tax and legal details to understand. Still, it would be a big boon for Bitcoin and crypto to see companies like Tesla and Apple accept crypto as a form of payment.
Apple and Bitcoin balance sheet
The future of Bitcoin and other cryptocurrencies is undoubtedly uncertain, but it’s clear that big companies like Tesla and many others are ready to test the waters to find out what the future could and should look like. of finance.
I think all the signs are that more companies are going into Bitcoin as a result of Tesla and Microstrategy’s moves and think Apple should be next because it has more upside potential than almost any other company in the world. world because of its ability to build on this fintech revolution from several angles.
Apple could see massive returns on investment by putting money on their hands in BTC, but the biggest problem might be becoming the leader in software / hardware that makes crypto simple, accessible, and secure for the masses.
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