Cryptocurrencies have been suffering lately after a solid 2023 and first quarter. Bitcoin (BTC), particularly, was leading from the front, which also saw the world’s most popular cryptocurrency hit an all-time high of $73,750 in March.
However, the rally appears to have stalled since then and cryptocurrencies have been suffering, with Bitcoin trading sharply below $70,000 for most of May. June, too, hasn’t been any different. On Jun 13, Bitcoin fell below $67,000 before recovering some of the losses and was trading at $67,100
A lot of factors have been behind this recent decline in Bitcoin. The Bitcoin halving event in April was one of the major reasons behind pulling back the price of the cryptocurrency.
The halving event, which happens every four years, reduces the block reward by 50%, with the goal of capping the total supply of Bitcoin at 21 million coins. This reduction in the rate of new Bitcoin supply usually boosts demand for cryptocurrencies, often leading to a price increase.
Bitcoin was anticipated to regain momentum following the end of the halving event but it didn’t. Also, the Wall Street rally paused in April due to growing concerns over rising inflation and potential interest rate hikes.
Although inflation eased in April and May, alleviating fears of another rate hike, lack of clarity on the Fed’s rate cut plans dented investors’ confidence. Federal Reserve Chairman Jerome Powell said after the FOMC meeting that the Fed sees only one rate cut this year, significantly down from the three projected in its March meeting.
Powell also said that although inflation has declined sharply over the past year, it remains sharply above the Fed’s 2% target. Hence, the Fed is likely to keep the interest rate higher for a longer period.
Higher interest rates adversely impact growth assets such as technology stocks, consumer discretionary stocks and cryptocurrencies.
However, even then experts believe that Bitcoin has tremendous potential and the recent decline is temporary. Year to date, Bitcoin has gained 45.5% after rallying more than 207% in 2023.
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 106.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 12.6% 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 14.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2% over the last 60 days. IBKR currently has a Zacks Rank #2.
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 110.3% over the last 60 days. Robinhood Markets currently has a Zacks Rank #2.
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 the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 219.1% over the last 60 days. Coinbase currently sports a Zacks Rank #1.
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Interactive Brokers Group, Inc. (IBKR) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Coinbase Global, Inc. (COIN) : Free Stock Analysis Report
Robinhood Markets, Inc. (HOOD) : Free Stock Analysis Report