The cryptocurrency market started 2024 on a positive note after an impressive rally last year. The much-hyped reformation in the cryptocurrency space took place on Jan 10. The U.S. Securities and Exchange Commission (SEC) approved rule changes to allow the creation of spot bitcoin exchange-traded funds (ETFs).
As many as,11 spot bitcoin ETFs are likely to be launched this year. Following the news, the price of bitcoin (BTC) jumped above the technical barrier of 47,000 to reach 47.893.70. However, Bitcoin’s price has fallen sharply since then.
On Jan 22, Bitcoin traded lower by nearly 3%, hitting its lowest level of $39,854.61 since December 2023. Nevertheless, bitcoin regained some lost glory in the last seven trading days as its price rose 0.6%.
Bitcoin continues to hold a lot of potential. The SEC’s latest decision is likely to turn out to be a landmark, positioning the entire crypto space as an integral component of mainstream finance. The game-changing decision of the SEC will allow individuals, money managers and other financial institutions to get exposure to the world’s largest cryptocurrency without having to own it.
Moreover, the next Bitcoin halving will occur in the first half of 2024. When a halving 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.
Stocks in Focus
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.
NVIDIA’s expected earnings growth rate for the current year is 63.1% (ending January 2025). The Zacks Consensus Estimate for its current-year earnings has improved 1.8% over the last 30 days. NVDA currently carries 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 has an expected earnings growth rate of 2.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the last 60 days. CME currently carries a Zacks Rank #2.
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.
Coinbase Global has an expected earnings growth rate of 49.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 36.4% over the last 30 days. COIN currently carries a Zacks Rank #3 (Hold).
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 has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last 30 days. HOOD currently carries a Zacks Rank #3.
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 Cash App can buy, sell, send and receive Bitcoin. In addition, SQ’s decentralized tbd platform allows developers to build decentralized finance applications to run on programmable blockchains. SQ is also one of the largest Bitcoin investors.
Block has an expected earnings growth rate of 53.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.4% over the last seven days. SQ currently carries a Zacks Rank #3.
The chart below shows the price performance of our five picks in the past three months.
Image Source: Zacks Investment Research
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CME Group Inc. (CME) : Free Stock Analysis Report
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