The cryptocurrency market didn’t have a memorable April after a solid rally in the first quarter that saw Bitcoin (BTC) hitting an all-time high of $73,750.
The world’s most popular cryptocurrency has since pulled back and was trading around $62,900 on Apr 30. One of the major reasons behind the decline in Bitcoin price was the halving event, which took place last month. The Bitcoin halving event happens once in four years.
However, with the April Bitcoin (BTC) halving event now concluded, there is widespread speculation that the reduction in the supply of Bitcoins will result in a scarcity-driven price increase for the digital asset in the upcoming months.
Miners who validate and record transactions receive rewards from the Bitcoin network and transaction fees. Halving reduces the block reward by half, aiming to cap Bitcoin’s global circulation at 21 million. Consequently, demand for new Bitcoins increases, driving up prices.
However, analysts argue that because halving occurs every four years and is anticipated, its effects are priced in and not disruptive. Miners may sell to boost cash flows, leading to large BTC transfers to exchanges as part of risk management strategies.
The ongoing volatility in the cryptocurrency market is temporary. The ongoing geopolitical tensions in the Middle East between Iran and Israel are also weighing on cryptocurrency prices.
Given that cryptocurrencies are traded round the clock and globally, they exhibit immediate and sometimes more pronounced reactions compared to stocks.
Their decentralized nature allows for swift responses to geopolitical events, as traders quickly buy or sell digital assets to navigate uncertainty. This agility in the cryptocurrency market enables rapid adjustments to changing circumstances, reflecting the dynamic and interconnected nature of the digital asset ecosystem.
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) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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 next year is 559.5%. The Zacks Consensus Estimate for current-year earnings has improved 141.6% over the last 60 days. Coinbase currently 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 147.5%.The Zacks Consensus Estimate for current-year earnings has improved 45% over the last 60 days. Robinhood Markets currently has a Zacks Rank #2.
NVIDIA Corporation NVDA is a major player in the semiconductor industry and has been one of the standout success stories of 2023. As a leading designer of graphic processing units (GPUs), the value of the NVDA stock tends to surge in a thriving crypto market. This is primarily due to the crucial role that GPUs play in data centers, artificial intelligence and the mining or production of cryptocurrencies.
NVIDIA’s expected earnings growth rate for the current year is 84.7%. The Zacks Consensus Estimate for current-year earnings has improved 3.1% over the last 60 days. Currently, NVIDIA has a Zacks Rank #2.
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NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Coinbase Global, Inc. (COIN) : Free Stock Analysis Report
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