“The wallet initiative appears to be a clear multi-billion dollar opportunity for the firm (potential for well over $40 billion in annual revenue with limited R&D),” RBC analyst Mitch Steves wrote in a note to clients, per Bloomberg.
The greatest market share would come from an exchange, but it could benefit from adding a digital currency to its balance sheet, which “would send even more users to ‘Apple Exchange,’” Steves said, Bloomberg reported. The move would also boost bitcoin prices even further.
The iPhone maker would be able to create a new sizable market for growth if it did so, he said, per Bloomberg.
This wouldn’t be an unprecedented move, as other companies such as Square and PayPal have pulled off similar ones, Bloomberg reported. Coinbase, as a closely held exchange, did so, too, proving that it could be a business model.
If Apple did develop a crypto exchange, it would be able to gain market share “immediately,” according to Steves, Bloomberg reported.
Apple’s ecosystem would also come with other benefits like better security compared to the companies that would become its competitors.
RBC talked about the issue as cryptocurrencies are currently becoming more popular among mainstream companies.
Examples of the rising interest in crypto are myriad, most notably the decision by Tesla CEO Elon Musk to buy $1.5 billion in bitcoin. Tesla also foresees the crypto being accepted as a payment option soon, PYMNTS reported. Other companies, like MicroStrategy and Square, have bought up bitcoin in the tens of millions of dollars worth as well.
Holding bitcoin could help generate higher returns for a company, better than what could happen through just having cash on the balance sheet, due to the volatile values that can prove bountiful for a company. That could go both ways, though, as companies face losses if bitcoin loses value.