Apple Is Better Off With Cryptocurrencies Than EVs: Analyst

Even as rumors swirl around Apple Inc AAPL entering the growing electric vehicle market, an analyst at RBC Capital Markets is suggesting Cupertino has another, more lucrative opportunity.

Crypto A Better Bet For Apple? Apple should be following in the footsteps of Tesla Inc TSLA and buying cryptocurrencies, rather than tackling EV manufacturing, analyst Mitch Steves said in a note, according to Bloomberg.

Tesla revealed in a 10-K filing Monday that it holds about $1.5 billion in reserves as Bitcoin and also plans to accept payments for sales in the digital currency on a limited basis.

If Apple were to develop the Apple Wallet into a crypto exchange, it could have a sizable new market opportunity in the billions, the RBC analyst said. 

Apple Wallet is a mobile app included with the iOS that allows users a convenient way to organize and use rewards cards, boarding passes, tickets, gift cards and more in one place.

Square Inc SQ, which is estimated to have an installed base of about 30 million users, generated about $1.6 billion per quarter from Bitcoin-related trading, Steves said.

Assuming only 200 million of Apple's installed user base of 1.5 billion trades, the market opportunity is about 6.66 times larger than Square, the analyst estimates.

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Security Is Apple's Sales Proposition: If Apple decides to enter the market, it can immediately gain share, Steves said.

The analyst noted that companies such as Paypal Holdings Inc PYPL and Square as well as closely-held exchanges such as Coinbase have all validated the business model.

Apple can offer more secure transactions than the rest in the industry, the analyst said.

A Win-Win Proposition? Just as cryptocurrency could be a multibillion-dollar opportunity for Apple, more users using an Apple exchange could boost the price of Bitcoin, Steves said.

Bitcoin was trading at 14.39% higher at $43,993 at last check. 

Apple Park in Cupertino, California. Photo by Daniel Lu via Wikimedia.