The cryptocurrency market, which was trying to stage a rebound, took a massive hit earlier this week. Bitcoin (BTC), which was heading toward the $70,000 mark, declined sharply on Aug 5 amid a broader market selloff.
Recession fears were reignited following the release of the latest jobs report that showed weaker-than-expected job additions in July, leading to a massive selloff. All three major indexes fell more than 3% on Aug 5, with the Nasdaq entering correction territory.
The panic spread into the cryptocurrency market as well. Bitcoin price fell below $55,000, hitting its lowest point in six months.
Markets have since pared some of the losses, with Bitcoin trading above $57,250 on Aug 8, although it is still more than 15% down from last week.
However, Bitcoin has been on a rally for most of this year after a solid 2023. The cryptocurrency hit an all-time high of $73,750 on Mar 14.
This year’s rally gathered pace after the Securities and Exchange Commission approved 11 spot Bitcoin exchange-traded funds (ETFs) in January, a major development that will make it easier for both individual investors and large institutions to invest in Bitcoin through a regulated and accessible platform.
However, the rally came to a halt in April, and even the halving event failed to boost Bitcoin’s price. The Bitcoin halving event reduces the reward for mining new blocks by half, aiming to cap the total supply of Bitcoins at 21 million. This decrease in the rate at which new Bitcoins are created generally boosts demand, which usually drives up their price.
Despite this, Bitcoin experienced a significant decline, with prices dropping below $59,000.
The rebound started in July end when Bitcoin once again crossed $68,400 only to face a roadblock earlier this week. That said, Bitcoin still has a lot of potential. The cryptocurrency gained 157% in 2023 and is up 35.5% year to date.
Also, the Federal Reserve is preparing to cut interest rates after increasing them to a record 23-year high in an effort to tackle sky-high inflation. This move is positive for Bitcoin, as lower interest rates typically benefit growth-oriented assets, including technology stocks, consumer discretionary items and cryptocurrencies.
Stocks in Focus
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 18.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.9% over the last 60 days. IBKR 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 106.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the last 60 days. NVDA presently has a Zacks Rank #3.
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 72.9% 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 3.6% over the last 90 days. Robinhood Markets currently has a Zacks Rank #3.
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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
