The cryptocurrency rally that began in 2023 and continued into the first quarter came to a sudden halt in April. Bitcoin (BTC) particularly has been in focus as the world’s most popular cryptocurrency witnessed an unprecedented rise at the beginning of this year.
The rally gathered pace in the second half of January, days after the Securities and Exchange Commission approved 11 spot Bitcoin exchange-traded funds (ETFs) in a historic move that will allow both retail and institutional investors a regulated and accessible way to invest in the cryptocurrency.
On Mar 14, Bitcoin hit an all-time high of $73,750. However, the crypto rally stalled after that. Even the Bitcoin halving event in April, which takes place once in four years, failed to boost the price of the cryptocurrency.
The Bitcoin halving reduces the reward for mining new blocks by half, aiming to cap the total number of Bitcoins at 21 million. This decrease in the rate at which new Bitcoins are created boosts demand for the cryptocurrency, often leading to a rise in its price.
Bitcoin has since been on the decline, with the price falling to $53,513 at the end of June. However, Bitcoin defied the bearish trend and started rebounding last week. On Jul 18, Bitcoin was trading above $63,500.
The cryptocurrency has jumped 5.2% after declining 1.6% in the past month.
Needless to say, Bitcoin still has a lot of potential, with the cryptocurrency gaining 157% in 2023 and 51.3% year to date.
A number of factors are responsible for Bitcoin’s recent surge. The unsuccessful assassination attempt on former president Donald Trump has made investors increase their bets on the chances of Trump winning the election in November.
Trump is also believed to be more welcoming to the crypto industry and his campaign has started accepting donations in cryptocurrencies.
Also, Federal Reserve Chairman Jerome Powell announced in June that the central bank now plans to cut interest rates only once this year, instead of the three cuts previously expected.
However, even a single 25 basis point rate cut has been well-received, especially since many had thought that there would be no rate cuts in 2024.
The latest FOMC “dot plot” indicates a projected total 1% decrease in interest rates by 2025, potentially taking the Fed funds rate to 4.1% by the end of next year.
Markets are now expecting a rate cut in September, which could benefit the cryptocurrency market. Lower interest rates usually help growth-oriented assets like technology stocks, consumer goods and cryptocurrencies.
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.
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 106.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 11.2% over the last 60 days. NVDA presently sports a Zacks Rank #1.
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 18.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5.2% over the last 60 days. IBKR currently has a Zacks Rank #2.
Block Inc. SQ is an online digital and mobile payment platform for consumers and merchants and is the parent company of Square and Cash App. The users of Cash App can buy, sell, send and receive Bitcoin. In addition, SQ’s decentralized tbd platform allows developers to build decentralized finance applications to run on programmable blockchains. SQ is also one of the largest Bitcoin investors.
Block has an expected earnings growth rate of 72.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the last 60 days. SQ currently carries a Zacks Rank #3.
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 89.7% over the last 90 days. Robinhood Markets currently has a Zacks Rank #2.
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
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Block, Inc. (SQ) : Free Stock Analysis Report
Robinhood Markets, Inc. (HOOD) : Free Stock Analysis Report
