Apple May Follow Elon Musk and Tesla Into Bitcoin (BTC) — Analysts Predict

By Luigi Wewege Tuesday, February 9, 2021

In a major bullish move for Bitcoin (BTC) and the entire cryptocurrency ecosystem, Tesla announced yesterday it made a purchase of Bitcoin totaling $1.5 billion. Moreover, the EV company is expected to start accepting BTC as a payment option going forward.

In this space, analysts from RBC Capital Markets believe Apple will be the next giant business that may diversify its cash holdings and invest in Bitcoin.

A pile of bitcoins.

Is Apple Next?

Apple may become the next business titan to follow Elon Musk’s Tesla, according to analyst Mitch Steves from the investment business company RBC. Steves initiated the coverage of Apple stock (AAPL) with a price target of $171 per share, indicating a bullish stance on the company’s stock.

Among other things, Steves argues that the tech company should buy $1 billion in Bitcoin — which represents "4 days of cash flow." In the meantime, the tech business should work to develop an "Apple Wallet" and “Apple Exchange.” These moves would enable the tech company to leverage its 1.5 billion installed user base while the exchange would allow Bitcoin and cryptocurrency transactions that could potentially add about $50 billion in business value.

“When we think of the Apple Wallet, there is a clear opportunity in our view to create a buying and selling mechanism for crypto currencies (in addition to standard payment processing – although not necessary). To be clear, we do not believe Apple needs to hold bitcoin as a balance sheet asset (although it would likely help), but rather allow users to buy and sell crypto assets,” Steves wrote in a research note sent to clients.

Yesterday, the EV company said it bought $1.5 billion Bitcoin for “more flexibility to further diversify and maximize returns on our cash.” Similarly, Apple may follow Elon Musk and his EV business Tesla into Bitcoin and cryptocurrency and add to its balance sheet.

“While the bigger business is likely in the exchange of assets, we think the firm could also fund its own initiative by adding a small amount of Bitcoin (or another crypto asset) to its balance sheet. If we assume that the firm can add $1B to its balance sheet (only ~4-5 days of cash flow) we think the price of the underlying asset would then go up in a substantial manner,” Steves adds.

Bitcoin price hit a fresh all-time high above the $48,000 mark this morning.

Summary

Apple may follow Elon Musk and Tesla into Bitcoin and potentially buy $1 billion in Bitcoin, according to RBC analyst Mitch Steves.

About the Author


Headshot for author Luigi Wewege

Luigi Wewege is the Senior Vice President, and Head of Private Banking at Caye International Bank. Outside of the bank, he serves as an Instructor at the FinTech School which provides online training courses on the latest technological and innovation developments within the financial services industry. Luigi is also the published author of: The Digital Banking Revolution.

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