Bitcoin (BTC) has had a turbulent January. While the benchmark crypto almost touched the $47,000 mark on Jan 8, riding on the optimism of spot Bitcoin ETFs going mainstream, it closed the month at $42,582.61, barely above the level it had finished 2023 on.
Multiple factors have affected it. The fund outflow from the Grayscale Bitcoin Trust (GBTC) and the potential release of Bitcoin from the defunct Mt. Gox exchange have been major sources of concern. Once profits were booked on the successful conversion of GBTC trust to an ETF, there was a marketwide correction that brought BTC down to $38,600 in almost no time.
Also, the Fed’s recent hawkish stance about rate cuts is being perceived as a negative for risk assets, including Bitcoin. The absence of the previously anticipated March 2024 rate cut suggests that borrowing costs will remain higher, which could reduce investment in riskier assets like cryptocurrencies. On Jan 31, the central bank announced that it was keeping interest rates at the 5.25-5.5% level. Fed Chair Jerome Powell also dampened hopes of a rate cut in March by suggesting rate cuts would only come into the equation when there is greater confidence in a sustained reduction in inflation.
However, there is rising sentiment that disinflationary trends seen recently in the markets are going to continue, allowing the Fed to begin cutting rates by May and officially end its policy tightening latest by June. With the tide turning from tightening to easing, the outlook seems rosier for Bitcoin. Also, there is the scheduled April “halving”, which is almost certainly going to push its price northward and unlock greater liquidity. This would encourage other financial institutions that are still pondering on whether to take the jump to adopt spot Bitcoin ETFs.
So, with a Bitcoin revival in the offing in 2024 and miners and traders already preparing their strategies for the late April halving, it would be prudent to watch a few Bitcoin-exposed stocks.
CleanSpark, Inc. CLSK is a company that mines and develops sustainable infrastructure for Bitcoin. CLSK’s expected earnings growth rate for the current year is 24%. The Zacks Consensus Estimate for its next-year earnings has improved 135.7% over the past 60 days. CLSK currently carries a Zacks Rank #3 (Hold).
Cboe Global Markets, Inc. CBOE is an options exchange marketplacethat also engages in the trading of digital currencies, primarily Bitcoin. As a digital asset trader, it operates as an exchange and futures marketplace. CBOE’s expected earnings growth rate for the current year is 5.6%. The Zacks Consensus Estimate for its current-year earnings has improved 2.6% over the past 60 days. CBOE currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Interactive BrokersGroup Inc. IBKR is a global automated electronic broker. IBKR executes, processes and trades in Bitcoin and other cryptocurrencies. IBKR’s expected earnings growth rate for the current year is 5.6%. The Zacks Consensus Estimate for its next-year earnings has improved 10.2% over the past 60 days. IBKR currently carries a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Interactive Brokers Group, Inc. (IBKR) : Free Stock Analysis Report
Cboe Global Markets, Inc. (CBOE) : Free Stock Analysis Report
Cleanspark, Inc. (CLSK) : Free Stock Analysis Report
