At Microsoft's annual shareholder meeting on December 10, investors were allowed to vote on whether to invest in Bitcoin. Seeing Bitcoin's price soar 1300% over the past five years and rise 140% in 2024 undoubtedly attracted the attention of many corporate executives, prompting them to consider holding some Bitcoin on their balance sheets.
Although Apple does not yet have a proposal in this regard, I believe this tech giant should consider purchasing Bitcoin. Here are four compelling reasons:
Apple holds a massive amount of cash.
As of September 28, Apple has $157 billion in cash, cash equivalents, and marketable securities. This is thanks to the company's stable cash flow over the years, making it one of the most financially robust companies in the world.
While Apple has invested heavily in stock buybacks, with an estimated $95 billion in FY2024, there is still plenty of leftover cash available. Moreover, as driving meaningful growth becomes increasingly difficult, there are fewer places to reinvest.
Apple has ample cash and can boldly experiment. For example, allowing purchases of its products with Bitcoin, and even adding this feature to Apple Pay and Apple Card.
The Bitcoin market is enormous.
Bitcoin is now globally recognized as a financial asset, with a market value close to $2 trillion. With such a large scale, if Apple invests 10% of its cash reserves, it would be around $16 billion, which wouldn't cause significant market fluctuations.
Apple can buy in batches, for instance, completing purchases within a year and then using some net income each quarter to buy Bitcoin, allowing for investment while controlling risk. Moreover, with the emergence of spot Bitcoin ETFs, it has become even more convenient for Apple to invest.
Bitcoin can combat inflation.
Apple's cash reserves, such as money market funds and government debt, may not keep up with inflation. However, Bitcoin has appreciated at an annualized rate of 69% over the past five years, and even if it drops to 20% annually over the next decade, Apple would still make a significant profit.
Leading the change.
Apple is usually not the first to launch new products, but it always manages to do it best. Currently, several companies directly hold Bitcoin. If Apple joins in, given its scale and performance, it is likely to inspire more companies to follow suit, thus boosting Bitcoin demand and driving up its price.
I don't know if Apple's executives have noticed Bitcoin, but if this cryptocurrency continues to rise, I believe more publicly traded companies will consider holding it.
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