By
Godfrey Benjamin
April 23rd, 2024
Stating that competition among crypto exchanges “is light,” the analysts suggested that Apple may be the solution to challenges in the crypto space.
An analyst at the brokerage firm RBC Capital Markets Mitch Steves suggested that Apple Inc (NASDAQ: AAPL) should launch its crypto exchange. Steves noted his suggestion in a report published on the 8th of February by the largest bank in Canada.
Since Tesla Inc (NASDAQ: TSLA) announced $1.5 billion worth of Bitcoin acquisition, it has raised several comments in the crypto community. The automaker revealed the BTC purchase in a filing with the US Securities and Exchange Commission (SEC). Apart from owning Bitcoin, Tesla plans to begin accepting Bitcoin as a form of payment in exchange for any of its products.
After Tesla’s BTC acquisition was made public, RBC Capital Markets said that Apple may be able to generate over $40 billion from the crypto space. According to a CoinDesk’s report, the brokerage firm also noted that Apple’s debut into the cryptocurrency sector could also push the US to become a leader in cryptocurrencies over the next 20 years.
Steves analyzed that Square Inc (NYSE: SQ) records around $1.6 billion quarterly in Bitcoin-related revenue. He noted that Square generated revenue on an active install base of about 30 million. Speaking further, the analysts highlighted the possibility of Apple generating more, considering the company’s large install base. Steves posited:
“Apple’s install base is 1.5 billion, and even if we assume only 200 million users would transact, that is 6.66x larger than Square. Therefore, the potential revenue opportunity would be in excess of $40 billion a year (15% incremental top-line opportunity).”
In the RBC Capital Markets report, analysts said that Apple could solve the challenges traders face due to unfavorable regulations. In the report, the RBC Capital Markets analysts noted that several exchanges experience technical and connectivity difficulties due to heavy trading volume.
RBC Analysts Believe Apple Could Solve Regulatory Challenges
Stating that competition among crypto exchanges “is light,” the analysts suggested that Apple may be the solution to challenges in the crypto space. According to the analysts, Apple may be able to solve regulatory issues, and other know-your-customer (KYC) challenges. To counter the problems, the analysts suggested that Apple develop a closed system where it only transfers crypto ownership between customers.
Explaining how Apple could be a solution to challenges in the crypto space, RBC Capital Markets suggested that Apple could also create an open system. As stated in the report, the open system could use a Bitcoin wallet and banking service Strike or the Bitcoin blockchain’s Lightning Network for reduced converting fees.
In addition, the analysts believe that an Apple crypto exchange would reduce the chances of a future ban on Bitcoin in the US.
Data by MarketWatch showed that Apple stock had surged 70.31% over the past year. The company has been recording profits, advancing over 3% in its year-to-date record. At press time, AAPL is down 0.23% to $136.60 at after-hours trading.