The cryptocurrency market had a solid 2023 and the rally gathered further momentum in December, which led to a great beginning this year. On Jan 10, the crypto space witnessed a historic event as the U.S. Securities and Exchange Commission (SEC), in a major reform, approved the creation of 11 spot Bitcoin (BTC) exchange-traded funds (ETFs).
The decision was widely expected and largely responsible for the December Bitcoin rally. Following the approval, Bitcoin prices soared further, rallying past $47,000. However, Bitcoin, the world’s most popular cryptocurrency, has been on the decline since then.
By the end of January, Bitcoin price had fallen sharply and was hovering around $39,000. However, some of the loss has been pared, and Bitcoin traded just above $43,000 on Feb 7.
Nevertheless, Bitcoin still holds a lot of potential and the Federal Reserve’s upcoming rate cuts are likely to boost the cryptocurrency market. The Federal Reserve said that a rate cut in March is unlikely, but multiple rate cuts are happening this year for sure. Markets are pricing in at least three 25-basis point rate cuts in 2024.
Lower interest rates generally have a positive influence on growth-oriented sectors, such as technology, consumer discretionary industries and cryptocurrencies.
Also, the SEC’s latest decision is going to boost the crypto space in the long term as it will push cryptocurrencies into mainstream finance.
Also, the next Bitcoin halving, projected in the first half of this year, is expected to reduce the mining reward for new blocks by half. This event historically enhances scarcity, posing a greater challenge for miners to acquire net Bitcoins and potentially leading to an increase in Bitcoin’s value due to decreased supply.
Our Choices
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 268.3%. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 60 days. Currently, NVIDIA has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CME Group Inc.’s CME options give the buyer of the call/put the right to buy/sell cryptocurrency futures contracts at a specific price at some future date. CME offers Bitcoin and ether options based on the exchange’s cash-settled standard and micro-Bitcoin and Ethereum futures contracts.
CME Group’s expected earnings growth rate for the current year is 15.9%. The Zacks Consensus Estimate for current-year earnings has improved 1.1% over the last 60 days. CME presently has a Zacks Rank #2.
BlackRock, Inc. BLK is one of the world’s largest investment managers and is publicly owned. BLK was one of the first companies from the traditional market to join the Bitcoin ETF race back in June 2023.
BlackRock’s expected earnings growth rate for the current year is 5%. The Zacks Consensus Estimate for current-year earnings has improved 5% over the last 60 days. BlackRock presently carries a Zacks Rank #2.
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