The second-largest cryptocurrency in the world, Ethereum (ETH), has started 2024 on a great note. While Bitcoin (BTC), too, has been fast off the blocks, rising 20% year to date, ETH has risen 33%. Ethereum, which trails only Bitcoin in the crypto world, is known for its uses as a blockchain-powered, open-ended decentralized software platform.
The network has, over the past year, completed the Shanghai Upgrade. The upgrade has ensured that it shifts its blockchain validation system from proof-of-work to proof-of-stake. Under the proof-of-stake system, miners of Ethereum will rely on Ether holders who will act as validators, thus lending more assurance to the system. In essence, proof-of-stake allows holders of Ether to lock up their funds as collateral to validate transactions and create new blocks, reducing the need for extensive computation and energy consumption.
This has led to far stricter trading, and ETH supply has remained stagnant as a result. Also, the amount of Ether locked up has risen significantly, with ETH held on exchanges at an all-time low of 11%.
However, per Bybit Research, the biggest boost has come from the new institutional investments. Institutions are over-allocating their portfolio to ETH compared to BTC. This is in contrast to the retail crypto market, where investors lean on Bitcoin.
Major players like Franklin Templeton and Fidelity, which already had Bitcoin ETFs approved by the Securities and Exchange Commission, are among firms that have submitted applications for an ether ETF. In fact, demand has gone up over the past few weeks, with market participants expecting a probable ether spot ETF approval by May of this year. ETH is currently trading above $3200, and the next earmarked resistance level is $3500.
So, with Ethereum already starting to make good of the state of the market, it might be prudent to keep a watch on stocks exposed to this open-source, decentralized blockchain platform. Here is a selection. These currently carry 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.
Accenture plc ACN: This global system integrator provides consulting, technology and other services markets Ethereum-based blockchain solutions to businesses to make it easier to process payments.
Accenture’s expected earnings growth rate for the current year is 4.7%. The Zacks Consensus Estimate for its current-year earnings has improved 0.1% over the past 60 days. Accenture currently carries a Zacks Rank #3.
CME Group Inc. CME: This company operates as one of the world’s largest futures exchanges and offers a wide range of derivatives contracts and various solutions to invest in cryptocurrencies like Ethereum.
CME Group’s expected earnings growth rate for the current year is 2.8%. The Zacks Consensus Estimate for its current-year earnings has improved 1.5 % over the past 60 days. CME Group currently carries a Zacks Rank #3.
HIVE Digital Technologies Ltd. HIVE: This cryptocurrency mining company that operates in Canada, Sweden and Iceland, engages in the mining and sale of digital currencies, including Ethereum Classic.
HIVE’s expected earnings growth rate for the current year is 66.5%. The Zacks Consensus Estimate for its current-year earnings has improved 11.9% over the past 60 days. HIVE currently carries a Zacks Rank #3.
BlackRock, Inc. BLK: This publicly owned company, which is one of the world’s largest investment managers andwas one of the first companies from the traditional market to join the Bitcoin ETF race back in June 2023 and got it approved this January, has already entered the ETH fray by applying for spot ETF.
BlackRock’s expected earnings growth rate for the current year is 4.9%. The Zacks Consensus Estimate for its current-year earnings has improved 5.2% over the past 60 days. BlackRock currently carries a Zacks Rank #2.
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