In November 2021, CNBC aired a lengthy interview with Apple Inc. (NASDAQ: AAPL) CEO Tim Cook. A short part of the discussion focused on Bitcoin and cryptocurrencies in general. Mr. Cook said that he personally owned cryptocurrency (he did not say which one) but pointed out that Apple would not buy any digital currency with its cash holdings, as other companies like MicroStrategy Incorporated or Block, Inc. have.
Mr. Cook said that he does not “think people buy Apple stock to get exposure to crypto.” He also does not expect to accept crypto as payment for Apple’s products in “the immediate future.”
Perhaps the most interesting — and constructive — quote regarding crypto from the head of the world’s most valuable and most respected company was “there are other things we are definitely looking at.” The website 9TO5Mac.com, which closely monitors all things Apple, has posed some theories about what these “other things” could be. In our view, the implications of these possible actions could be generally constructive for Bitcoin and other digital currencies and might negatively impact at least two other well-known companies.
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Apple’s Apple Pay service is a mobile payment and digital wallet service that allows users to make payments in person, in iOS apps, and on the web when utilizing a Safari browser. In turn, the company’s Apple Wallet app, among other things, stores credit cards used by Apple Pay. It is theorized that Apple will as a result build a Bitcoin wallet directly into its Apple Wallet app.
An Apple Bitcoin wallet would allow users to maintain full control of their Bitcoin holdings and move them off an exchange like Coinbase Global, Inc. (NASDAQ: COIN). Such an action would presumably reduce or eliminate the chances of the user’s account being hacked, and likely have decidedly negative implications for Coinbase. (Hackers stole from accounts of 6,000 Coinbase customers between March 2021 and May 2021.)
Apple could take one further step and operate like an exchange where a user could buy or sell Bitcoin directly in the Apple Wallet app by utilizing payment methods the customer has on file with Apple. The Bitcoin holdings would be stored in the user’s Apple Wallet. Such a setup would likely adversely affect the online brokers like Robinhood Markets, Inc. (NASDAQ: HOOD). Robinhood has processed an increasing number of crypto trades for its customers in 2021.
More broadly, Apple could in theory set up a Bitcoin-based cost-free global payments system for its customers, which likely would be appealing to international travelers and small businesses seeking to expand their reach. For example, a user could put dollars into Apple Cash, which acts much like a debit card. The dollars would be converted to Bitcoin, and then converted to local currency by the ultimate recipient. The theory currently suggests none of these transactions would carry fees.
A movement by Apple to set up a Bitcoin wallet or conduct cryptocurrency exchange operations would likely be well received — particularly given the company’s tremendous technical reputation and extremely loyal user base. The price of Bitcoin would likely be boosted by such a move; however, companies like Coinbase and Robinhood could be negatively affected.
Apple Inc. last traded at US$177.57 on the NASDAQ.
Information for this briefing was found via Edgar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
