Apple (AAPL - Free Report) now joins Twitter (TWTR - Free Report) , Facebook (FB - Free Report) and Alphabet (GOOGL - Free Report) in banning cryptocurrency-related advertisements. The company’s latest App Store review guidelines also essentially prohibit cryptocurrency mining on iOS devices.
Cryptocurrency Market in Deep Trouble
Cryptocurrencies have been losing value due to growing number of regulations and increasing hacking incidents. Per CNBC, bitcoin hits its lowest in two months over this weekend (Jun 9-10), after a relatively small South Korean exchange was reportedly hacked.
Moreover, the lack of support from global central banks has made the acceptance of cryptocurrencies difficult in real-world transactions. Notably, some of the Asian countries like China have imposed a ban on bitcoin trade, while a number of other countries have tightened regulations. These have affected not only bitcoin but also other cryptocurrencies like Ethereum, Ripple, Litecoin and many more.
Additionally, a number of fraudulent initial coin offerings (ICOs) have made investors further apprehensive about the industry's future.
Further, forecasts are no longer unanimously rosy. Prominent investment banker, Goldman Sachs, predicts most cryptocurrencies to fail with their value falling to zero. European financial services company, Allianz, has echoed a similar opinion and is worried about the dicey nature of cryptocurrencies.
Warren Buffett has also strongly criticized investments in bitcoins and other cryptocurrencies. He believes cryptocurrencies are non-productive assets. Hence, the cycle of investment might be pretty short, as it would require people interested to invest in such non-productive products. All this will lead to stagnation in the cryptocurrency industry in the near future.
Apple’s Ban Purposed to Make App Store Safer
Apple allows apps like Coinbase and Robinhood to enable users to trade bitcoin, Ethereum and other cryptocurrencies.
Notably, the latest App Store guidelines don’t put a complete ban on mobile cryptocurrency transaction or storage. Instead, they emphasize regulating and authenticating transactions or transmissions as well as storage of cryptocurrencies through established organizations.
The latest guidelines definitely make the App Store safer for users. Although it may seem harsh for cryptocurrency miners and related app developers, these guidelines will help Apple to filter out shoddy developers.
Notably, Apple’s App Store developer base has hit 20 million. The App Store is significantly lucrative for developers, as they have generated $100 billion revenues from their apps on the store.
The App Store is a growth driver for Apple’s Services business, which accounted for almost 15% of total revenues, in the last-reported quarter. We believe Apple’s strong focus on development of App Store and innovation of its ecosystem for developers will continue to strengthen Services business revenues over the long haul.
Currently, Apple has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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