Bitcoin
4 Solid Stocks to Profit from Bitcoin’s Resumption of Rally
The crypto rally that began in 2023 and continued into the first quarter came to a sudden halt in April. Bitcoin (BTC) in particular has been in the spotlight as the world’s most popular cryptocurrency witnessed an unprecedented surge earlier this year.
The rally gathered steam in the second half of January, days after the Securities and Exchange Commission approved 11 spot Bitcoin exchange-traded funds (ETFs), in a historic move that will allow both retail and institutional investors a regulated and accessible way to invest in the cryptocurrency.
On March 14, Bitcoin hit an all-time high of $73,750. However, the crypto rally stalled after that. Even the Bitcoin halving event in April, which happens once every four years, failed to boost the cryptocurrency’s price.
The Bitcoin halving reduces the reward for mining new blocks by half, aiming to limit the total number of Bitcoins to 21 million. This decrease in the rate at which new Bitcoins are created increases demand for the cryptocurrency, often leading to an increase in its price.
Bitcoin has been falling ever since, with the price dropping to $53,513 in late June. However, Bitcoin defied the bearish trend and began to recover last week. On July 18, Bitcoin was trading above $63,500.
The cryptocurrency rose 5.2% after falling 1.6% last month.
It goes without saying that Bitcoin still has a lot of potential, with the cryptocurrency appreciating 157% in 2023 and 51.3% year-to-date.
Several factors are responsible for Bitcoin’s recent surge. The failed assassination attempt on former President Donald Trump has caused investors to increase their bets on Trump’s chances of winning the November election.
Trump is also believed to be more receptive to the cryptocurrency industry and his campaign has started accepting donations in cryptocurrency.
Additionally, Federal Reserve Chairman Jerome Powell announced in June that the central bank now plans to cut interest rates just once this year, instead of the three cuts previously expected.
However, even a single 25 basis point rate cut was welcomed, especially since many thought there would be no rate cuts in 2024.
The FOMC’s latest “points district” indicates a projected 1% total reduction in interest rates through 2025, potentially taking the fed funds rate to 4.1% by the end of next year.
Markets are now expecting a rate cut in September, which could benefit the cryptocurrency market. Lower interest rates typically help growth-oriented assets such as technology stocks, consumer staples, and cryptocurrencies.
The story continues
Our choices
We’ve narrowed our search to four crypto-oriented stocks that have strong potential for 2024. Each of our picks carries a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold). You can see The complete list of today’s Zacks #1 Rank stocks is here.
NVIDIA Corporation NVDA is a world leader in visual computing technologies and the inventor of the graphics processing unit, or GPU. Over the years, NVDA’s focus has evolved from PC graphics to AI-based solutions that now power high-performance computing, gaming and virtual reality platforms.
NVIDIA has an expected earnings growth rate of 106.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 11.2% over the past 60 days. NVIDIA currently sports a Zacks Rank #1.
Interactive Brokers Group, Inc. IBKR is a global automated electronic brokerage. IBKR executes, processes, and trades cryptocurrencies. IBKR’s commodity futures trading desk also offers clients the opportunity to trade cryptocurrency futures.
Interactive Brokers Group has an expected earnings growth rate of 18.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5.2% over the past 60 days. IBKR currently carries a Zacks Rank #2.
Block Inc. SQ is an online digital and mobile payments platform for consumers and merchants and is the parent company of Square and Cash App. Cash App users can buy, sell, send, and receive Bitcoin. Additionally, SQ’s decentralized tbd platform allows developers to build decentralized financial applications to run on programmable blockchains. SQ is also one of the largest investors in Bitcoin.
Block has an expected earnings growth rate of 72.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the past 60 days. SQ currently carries a Zacks Rank #3.
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 over 100%. The Zacks Consensus Estimate for current-year earnings has improved 89.7% over the past 90 days. Robinhood Markets currently carries a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Interactive Brokers Group, Inc. (IBKR): Free Stock Analysis Report
NVIDIA Corporation (NVDA): Free Stock Analysis Report
Block, Inc. (SQ): Free Stock Analysis Report
Robinhood Markets, Inc. (HOOD): Free Stock Analysis Report