The cryptocurrency rally that gathered steam this year after a solid 2023 came to a halt in April. Bitcoin (BTC), the world’s most popular cryptocurrency, spearheaded this rally but is now suffering the most.
On Jun 19, Bitcoin was trading at $64,860.25, sharply lower than its all-time high of $73,750.07 attained on Mar 14. The past two and a half months have been turbulent for Bitcoin, with its price falling more than 18%. However, Bitcoin has gained 53.8% year to date and 157% in 2023.
The Bitcoin rally gathered pace in early January after the U.S. Securities and Exchange Commission (SEC) approved 11 spot Bitcoin exchange-traded funds (ETFs).
The approval of these ETFs is being seen as a game-changer as these will provide both retail and institutional investors with a regulated and accessible way to invest in the cryptocurrency. This development not only enhances liquidity but also contributes to price stability.
Bitcoin surged more than 50% after that but the rally came to a halt with the halving event in April. The halving event, which occurs every four years, reduces the block reward by 50%, aiming to cap the total supply of Bitcoin at 21 million coins. This reduction in the rate of new Bitcoin supply typically increases demand for cryptocurrencies, often resulting in a price surge.
However, the Bitcoin halving event has now concluded and there is widespread speculation that the reduction in supply will lead to a scarcity-driven price increase for the digital asset in the near term.
Also, on Jun 12, Federal Reserve Chairman Jerome Powell, in his post-FOMC meeting statement, said that the Fed anticipates only one rate cut this year, a significant decrease from the three cuts projected in its March meeting.
However, a single rate cut of 25 basis points in 2024 also bodes well for the cryptocurrency market and the broader economy given that several market participants had already priced in no rate cuts this year.
Low interest rates benefit growth assets such as technology stocks, consumer discretionary stocks and cryptocurrencies.
At this stage, investors should adopt a long-term perspective. The Fed is clearly nearing the end of its higher rate regime. We might see a rate cut by the end of this year if macroeconomic data remains favorable.
Our Choices
We have narrowed our search to four crypto-oriented stocks that have strong potential for 2024. Each of our picks carries either a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Interactive Brokers Group, Inc. IBKR is a global automated electronic broker. IBKR executes, processes and trades in cryptocurrencies. IBKR’s commodities futures trading desk also offers customers a chance to trade cryptocurrency futures.
Interactive Brokers Group has an expected earnings growth rate of 14.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 7.3% over the last 90 days. IBKR currently has a Zacks Rank #2.
Coinbase Global, Inc. COIN offers financial infrastructure and technology to support the global cryptocurrency economy. COIN provides a main financial account for consumers in the crypto space, a marketplace with liquidity for institutional crypto asset transactions, and technology and services for developers to build crypto-based applications and accept cryptocurrencies securely as payment.
Coinbase Global’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 219.1% over the last 60 days. Coinbase currently sports a Zacks Rank #1.
NVIDIA Corporation NVDA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. Over the years, NVDA’s focus has evolved from PC graphics to artificial intelligence-based solutions that now support high-performance computing, gaming and virtual reality platforms.
NVIDIA has an expected earnings growth rate of 106.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 12.1% over the last 60 days. NVDA presently sports a Zacks Rank #1.
Robinhood Markets, Inc. HOOD operates a financial services platform in the United States. Its platform allows users to invest in stocks, exchange-traded funds, options, gold, and cryptocurrencies. HOOD buys and sells Bitcoin, Ethereum, Dogecoin and other cryptocurrencies using its Robinhood Crypto platform.
Robinhood Markets’ expected earnings growth rate for the current year is more than 100%.The Zacks Consensus Estimate for current-year earnings has improved 110.3% over the last 60 days. Robinhood Markets currently has a Zacks Rank #2.
Hut 8 Mining Corp. HUT is a cryptocurrency mining company based in North America. HUT offers computing power to mining pools and receives digital assets in return. The company caters to commercial clients in diverse sectors such as finance, healthcare, government, as well as those involved in digital assets, blockchain, gaming, virtual effects and Web 3.0.
Hut 8 Mining’s expected earnings growth rate for the current year is 50%. The Zacks Consensus Estimate for current-year earnings has improved 311.9% over the last 60 days. Hut 8 Miningpresently carries a Zacks Rank #2.
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Interactive Brokers Group, Inc. (IBKR) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Coinbase Global, Inc. (COIN) : Free Stock Analysis Report
Hut 8 Corp. (HUT) : Free Stock Analysis Report
Robinhood Markets, Inc. (HOOD) : Free Stock Analysis Report
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