The cryptocurrency market suffered a severe blow in April after a strong rally in the previous 15 months. On Mar 14, the largest cryptocurrency, Bitcoin (BTC), recorded an all-time high of 73,750.07. However, it has fallen nearly 17% thereafter. Bitcoin gained more than 67% in first-quarter 2024 after jumping 157% in 2023. At present, Bitcoin is trading 10% below its all-time high.
One of the major reasons for the decline in Bitcoin price was the halving event that took place last month. The Bitcoin halving event happens once in four years. Moreover, U.S. equity markets tumbled in April owing to market participants’ concern that the Fed will keep the interest rate higher for longer in light of the sticky inflation rate and a resilient labor market. A higher interest rate is detrimental to high-growth sectors like technology, consumer discretionary and cryptocurrency.
Nevertheless, with the April Bitcoin halving event now concluded, there is widespread speculation that the reduction in the supply of Bitcoins will result in a scarcity-driven price increase for the digital asset in the upcoming months.
Miners who validate and record transactions receive rewards from the Bitcoin network and transaction fees. Halving reduces the block reward by half, aiming to cap Bitcoin’s global circulation at 21 million. Consequently, demand for new Bitcoins increases, driving up prices.
Moreover, since the launch of the first Bitcoin ETFs on Jan 11, the asset has surged more than 50%. The ETFs represent a landmark in Bitcoin’s journey, offering both retail and institutional investors a regulated and accessible means to invest in the cryptocurrency. This development not only enhances liquidity but also contributes to price stability.
Optimistic Estimates
Several research firms have said 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 Bitcoin to touch $170,000 by April 2025.
Furthermore, VanEck estimated a medium-term target of $350,000 for Bitcoin. Connors’ firm has estimated that the base case Bitcoin will reach $110,000 in 2024 and $140,000 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 bitcoin-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 in the past month.
Image Source: Zacks Investment Research
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 more than 100% over the last 30 days.
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 #2 NVIDIA’s expected earnings growth rate for the current year is 87.4% (ending January 2025). The Zacks Consensus Estimate for its current-year earnings has improved 0.1% over the last 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 more than 100% over the last 30 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 more than 100% for the current year (ending September 2024). The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the last 30 days.
Hut 8 Corp. HUT acquires, builds, manages, and operates data centers for digital assets mining, computing, and artificial intelligence in the United States. HUT mines Bitcoin. It merged with US Bitcoin Corp to increase its total hash rate substantially.
HUT aims to increase its total hash rate to 9.8 EH/s. HUT operates in four segments: Digital Assets Mining, Managed Services, High Performance Computing, Colocation and Cloud, and Other.
Zacks Rank #2 Hut 8 has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the last seven days.
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NVIDIA Corporation (NVDA) : Free Stock Analysis Report
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Robinhood Markets, Inc. (HOOD) : Free Stock Analysis Report