The cryptocurrency market had a solid 2023 and the rally continues this year. On Mar 14, the largest cryptocurrency, Bitcoin (BTC), recorded an all-time high of 73,750.07. However, it has fallen more than 17.5% in less than a week and traded at $66,982.84 on Mar 21. Bitcoin rallied more than 7% on Mar 21 after the Fed reassured three interest rate cuts of 25 basis points each in 2024.
A low interest rate regime is beneficial for high-growth stocks like technology, consumer discretionary and cryptocurrency. Bitcoin has appreciated 74.5% this year after rallying 157% in 2023. The much-hyped reformation in the cryptocurrency space took place on Jan 10. The U.S. Securities and Exchange Commission approved rule changes to allow the creation of spot Bitcoin exchange-traded funds (ETFs). As many as 11 spot Bitcoin ETFs were launched in January.
Moreover, the next Bitcoin halving will occur in April 2024. When this occurs, the reward for mining new blocks is halved, making it more challenging for miners to earn net Bitcoins. Historically, this event has led to increased scarcity and has driven up the value of Bitcoin due to reduced supply.
Optimistic Estimates
Several research firms believe that this is just the beginning of the Bitcoin rally. Standard Chartered expects Bitcoin to reach $100,000 by the end of 2024. Research firm Fundstrat has provided a target range of $116,000 to $137,000 for this year. Hedge fund SkyBridge predicts $170,000 by April 2025.
Furthermore, VanEck estimates a medium-term target of $350,000 for Bitcoin. Connors’s estimated that in base-case, Bitcoin will reach $110,000 in 2024 and $140,000 the next year. However, according to the firm’s best-case scenario, the cryptocurrency will hit $180,000 in 2024 and $450,000 in 2025.
Our Top Picks
We have narrowed our search to five 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.
The chart below shows the price performance of our five picks year to date.
Image Source: Zacks Investment Research
NVIDIA Corp. NVDA is a semiconductor industry giant and one of the biggest success stories of 2023. As a leading designer of graphic processing units (GPUs), the NVDA stock usually soars on a booming crypto market. This is because GPUs are pivotal to data centers, artificial intelligence, and the creation of crypto assets.
Zacks Rank #1 NVIDIA’s expected earnings growth rate for the current year is 82.3% (ending January 2025). The Zacks Consensus Estimate for its current-year earnings has improved 0.2% over the past seven days.
Coinbase Global Inc. COIN provides financial infrastructure and technology for the crypto economy in the United States and internationally. COIN offers the primary financial account in the crypto space for consumers, a marketplace with a pool of liquidity for transacting in crypto assets for institutions; and technology and services that enable developers to build crypto-based applications and securely accept crypto assets as payment.
Zacks Rank #1 Coinbase Global has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 51.5% over the past 30 days.
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 the Cash App can buy, sell, send and receive Bitcoin. In addition, SQ’s decentralized tbd platform allows developers to build decentralized finance applications that run on programmable blockchains. SQ is also one of the largest Bitcoin investors.
Zacks Rank #2 Block has an expected earnings growth rate of 68.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the past 30 days.
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.
Zacks Rank #2 Robinhood Markets has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 15% over the past seven days.
CleanSpark Inc. CLSK operates as a Bitcoin miner in the Americas. CLSK owns and operates data centers that primarily run on low-carbon power. CLSK’s infrastructure supports Bitcoin, a digital commodity and a tool for financial independence and inclusion.
Zacks Rank #2 CleanSpark has an expected earnings growth rate of 89.2% for the current year (ending September 2024). The Zacks Consensus Estimate for current-year earnings has improved 41.7% over the past 30 days.
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NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Block, Inc. (SQ) : Free Stock Analysis Report
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Robinhood Markets, Inc. (HOOD) : Free Stock Analysis Report