Apple has been interested in cryptocurrencies for a long time and it cannot be denied. We have frequently heard Steve Wozniak, the co-founder of Apple, talk about how Bitcoin is the future. Wozniak always seems amused by the cryptocurrency and recently stated it to be “an amazing mathematical miracle.”
The leading competitors of Apple have already found their space in the Crypto world.
- Google: Google’s first blockchain venture was a partnership with Theta. Theta Labs is a crypto-focused company that undertook a project of decentralized video streaming. Google offered to become an enterprise network validator for that.
- Microsoft: Microsoft came up with the idea of Identity Overlay Network (ION) that would be built on the Bitcoin blockchain. In 2020, the company filed a patent to supervise a crypto mining system operated by human activity.
- Facebook: Facebook created a stir in social media after announcing its own cryptocurrency Libra in 2019. The name has been changed to “Diem” after the controversy and is expected to release in 2021.
- Amazon: There have been talks of Amazon launching its own cryptocurrency project. It has recently made an announcement of supporting Ethereum through its managed blockchain.
Moreover, the recent purchase of Bitcoin worth $1.5 billion by Tesla CEO, Elon Musk, as an investment policy for his electric car company caused a skyrocketing surge in the price of Bitcoin.
The investment of leading companies and the escalating price of Bitcoin raised hopes that Apple might be the next & Visit the website to start trading in crypto
This anticipation led to a rumor spiraling through Twitter. The microblogging platform was flooded with news of Apple’s alleged investment in Bitcoin worth billions of dollars.
The founder of ChainLeak, a trusted crypto news portal tweeted about the rumor how Apple was all set to announce its purchase of Bitcoin worth $2.5 billion, later that day. He was ready to bet on the definite surge of Bitcoin’s price to $100k if this had happened.
The Twitter handle of Galaxy Trading also participated in agitating the rumor by tweeting about Apple.
However, the hype ended shortly as there was no official statement published by Apple to deny or agree with the claim. One thing worth noticing was that the market took the news with a pinch of salt. The rumor did not hike the price of Bitcoin even momentarily. Surprisingly, it kept going down. Before the rumor started, the price of Bitcoin was running a little over $34,000 and after a day, it slipped down even more to $31,000.
Apple is one of the largest cash-holding companies based in the US. With a market capitalization of $195.57 billion, investing even $1.5 billion in Bitcoin would mean an allocation of 0.76%.
As the motive of cryptocurrency is to completely replace fiat currency in the long run, investment in such a digital asset will have a huge impact on the cash position Apple holds. Furthermore, Apple’s legacy as a pioneer in the tech world, and the amount of influence it has on its followers make the company reluctant to take risks.
Apple and Crypto: History
The first time Apple became a target for the crypto community was in 2012. Apple had bluntly removed two Bitcoin apps from the App Store stating that they did not comply with legal requirements of the location they were operating in. The crypto supporters argued how the foundation of bitcoin and cryptocurrencies are laid on the fact that they are decentralized, not requiring any legal permission. But Apple did not change its decision.
It was not until 2014 when Bitcoin had paved its way into the finance market grabbing a lot of attention, that Apple reconsidered its approach towards bitcoin and crypto apps. That is when it decided to change its anti-crypto policy. It allowed the App Store to boot a number of crypto-centric apps, including the prominent Coinbase mobile app. This helped bitcoin and other cryptocurrency developers to work closely with Apple and had led the company to set foot into the world of cryptocurrencies.
Apple’s Recent Interest in Cryptocurrency
In May 2021, Apple posted a requirement for Business Development Manager mastering in “Alternative Payments.” They were looking for candidates with over 5 years of experience who had worked closely with alternative payment providers, like digital wallets, Fast Payments, BNPL, cryptocurrency, etc.
However, the crypto lovers could not record an affirmative move by Apple other than the job post.
Why is the price of Bitcoin falling?
Even after having a volatile nature, Bitcoin’s price was surging high since last year. But recently the price of Bitcoin has fallen by nearly 30%. The latest reason is the warning by the China Banking Association. It warned the members of the banks how risky their association with digital currencies can get.
In April Bitcoin had hit its all-time high of $64,800. Another announcement that affected the price was by Tesla when it decided to not accept digital currency for payments. Even though it had declared earlier that it would, the declining price of Bitcoin has made it rethink the decision. There have also been rumors in Washington about implementing strict regulations on digital currencies.
Bitcoin is a decentralized currency that is not backed by the government or any bank. The advantage of this is that the users can stay anonymous, but it also means that in case of a theft or hack, the government will not provide any security or compensation.
The “miners” create Bitcoin by verifying transactions on the blockchain using high computer power. When a miner solves a mathematical problem, he is rewarded with a bitcoin. Bitcoin can also be purchased from exchanges that accept fiat currencies.
Although businesses are starting to accept Bitcoin as a payment method, there is still a long way to go before mass acceptance.
To avoid inflation the limit of Bitcoin production is set to 21 million. There are already 18.7 million Bitcoins in circulation, bringing a new approach to the financial market.
Could a Crypto Currency sell-off damage the financial market?
Even if there is a crash in the price of digital currencies, it can in no way drag down the economy. If there must be an immediate sell-off, cryptocurrencies will still hold a market value of about $1.72 trillion. This seems huge but when compared with the traditional stock market worth $46.9 trillion, the residential real estate market worth $41.3 trillion, and the Treasury market worth $21 trillion, cryptocurrencies have no power.
The European Central Bank, when asked about the risk of cryptocurrencies, stated that it would only have a limited effect on the stability of the current financial system. The reason is obvious. Cryptocurrencies are not yet as widely used as fiat currencies. Financial institutions only have minimal exposure to these currencies under law.
Are cryptos the right investment for you?
Along with Bitcoin, the other cryptocurrencies are having a hard time as well. Finance experts have always been skeptical about this kind of investment. They had predicted the unbelievable skyrocketing price of cryptocurrencies as a bubble. Observing the current situation that might have been true.
Investment in cryptocurrency diversifies your portfolio but only a certain percentage of your investment should be dedicated to these digital assets. When Bitcoin began trading in 2013, it was only priced around $13 which spiked to $1000 by December. Towards the end of 2017, Bitcoin had hit its first all-time high reaching $20,000. But again, the price crashed to $3,000 in the following year. We saw a similar pattern this year when the price hiked above $64,000 in April 2021. And now, the plunge has been affecting Bitcoin investors.
What catalyzed new conversations in the crypto space was a report published by RBC Capital Markets. Apple Pay has a strong base of 507 million users which they want to use by introducing its own crypto exchange services. This would give power to the firm to immediately gain market share and take over the industry.