In a short space of time Apple have become technology giants. From watches to TVs, Apple is dominating in almost every field. Only this month, Apple announced several new additions to their smartphone line-up, including the iPhone X and the iPhone 8. However, despite their dominance it’s predicted that Apple stocks, which are currently the most-traded company stock, will soon be surpassed by cryptocurrencies.
What Are Cryptocurrencies?
Most people will have heard of cryptocurrencies but they may not know exactly what they are. To put it simply, cryptocurrencies are digital currencies which are created and used online. They don’t exist in any physical form, which is partly why many people struggle to grasp the concept. However, there are many benefits to these digital assets, including the speed and ease of transactions between users. The first created cryptocurrencies, Bitcoin, remains the most popular digital currency to date. Bitcoin has a number of popular uses including online slot games, transferring money globally and it is even being accepted in online retail outlets around the world.
Bitcoin is a decentralised currency, which means that transactions aren’t authorised or processed by any authority. Instead, every transaction made using Bitcoin is stored on a large online database. This can be viewed by everyone within the network- everyone who is currently using the currency. The transparency of transactions is one of the key security features of Bitcoin, as it makes it difficult for people to manipulate information about their purchases. Despite this, there have been a number of highly public scams and hacks which have seen cryptocurrency investors lose thousands. As recently as July 2017, Bithumb a huge currency exchange was hacked and over 30,000 accounts were targeted.
Uncertainty around Bitcoin’s security, and the lack of regulations currently in place, are key drawbacks which are preventing the currency from being more widely used throughout societies around the world. However, many people see the huge potential that the technology holds and, for this reason, the volume of cryptocurrency trading has excelled rapidly and is predicted to surpass Apple.
How Will Cryptocurrencies Surpass Apple Stocks?
At the moment, the average trading volume of Apple stocks is around $4 billion per day. They’ve quickly become the most liquid stock in the world. However, cryptocurrency trading volume, which includes Bitcoin, Ethereum and other alternative digital currencies, has soared over the past few years. Consequently, the trading volume has now hit an average of $3 billion per day and industry experts predict that this is set to continue increasing.
Although cryptocurrency growth has huge role in the chances of the digital assets surpassing Apple’s stocks, the decline in daily trading volume is also significant. In fact, in August this year the US stock market hit a three-year low in terms of daily trading. In September, the total market cap of all digital currencies was a huge $121 billion. For such a recent creation, this is a huge development.
Apple’s falling stocks are part of a trend of decline that has been occurring for the past few years. Despite dominating the smartphone field for many years, sales are actually down by 16% for the first year ever. There is more competition than ever and many wireless carriers are removing hardware subsidies, so people are finding that new smartphones and contracts are far more expensive and are choosing to hold onto their phone for a much longer period of time instead of automatically upgrading to the latest iPhone.
At $43 billion, Apple’s revenue predictions for the upcoming quarter were considerably lower than experts and Wall Street analysts had expected. This may be putting large investors off of purchasing stocks as they fear that growth is declining. This is only supported by sales in the second-largest market, China, slowing considerably in the past quarter.
Although cryptocurrencies appear to be on the rise, experts have stated that it’s too soon to predict whether or not the digital currencies will gain use as an alternative to current legal tenders around the world. Cryptocurrencies are renowned for being extremely volatile- their value can plummet in a matter of hours which makes them a risky investment.
In fact, when CEO Sean Everett sold his Apple and Amazon stocks and used the money to buy cryptocurrencies, like Bitcoin and Ethereum, on a popular exchange website he lost out almost immediately. The businessman was hacked within days of investing and it took only minutes for thousands of dollars to be stolen from him. So, there are still many faults in the security of cryptocurrencies which can put people off of investing.
The growing and active cryptocurrency market will provide an area of interest for stock market strategists, in regards to tracking global capital flows. Apple stocks are likely to recover in time, particularly as it is such a reasonable valued stock in comparison to top competition Facebook, Amazon, Microsoft and Alphabet.