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4 Strong Crypto Stocks to Bet on Ahead of the Next Bitcoin Rally
The cryptocurrency rally came to an abrupt halt in April after a robust 2023 and first quarter. In the first quarter, Bitcoin (BTC), the world’s most popular cryptocurrency, hit an all-time high of $73,750.
However, Bitcoin has since declined sharply, with its price hovering around $68,000 on May 23. In fact, Bitcoin has fallen 15% since hitting an all-time high on March 14.
One of the main reasons for this decline is the recently concluded halving, which takes place every four years. The halving event cuts the block reward in half, aiming to limit the total supply of Bitcoin to 21 million coins. As a result, reducing the rate of issuance of new Bitcoins generally leads to increased demand for the cryptocurrency, which in turn tends to drive up its price.
Additionally, Wall Street suffered in April after a first-quarter rally as concerns about rising inflation grew. That quickly wiped out optimism surrounding rate cuts as investors feared the Federal Reserve could keep interest rates higher for a longer period of time.
High interest rates negatively impact growth assets such as technology stocks, consumer discretionary stocks and cryptocurrencies.
However, Bitcoin still has a lot of potential. Year to date, Bitcoin has gained 54% after rising 207% in 2023. The halving event is also over.
Also, the cryptocurrency has jumped more than 50% since the launch of the first Bitcoin ETFs in early January.
Minutes from the Federal Reserve’s April 30-May 1 FOMC meeting revealed that several officials favor raising interest rates if the need arises because inflation is still higher to its target of 2%.
However, recent economic data showed that inflation fell in April after rising in the first quarter. The consumer price index (CPI) rose 0.3% month over month in April, which was lower than economists’ expectations for a 0.4% rise. Year over year, the CPI increased 3.4%.
Furthermore, UJS GDP increased by only 1.6% in the first quarter after increasing by 3.4% in the last quarter of 2023. Furthermore, retail sales remained stable in April after increasing by 0.3% in March, while manufacturing and services activity also slowed last month.
These signs of a slowing economy have raised hopes that the Federal Reserve may soon begin cutting interest rates, which would help the cryptocurrency market.
Our choices
We 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.
The story continues
NVIDIA Company NVDA is a major player in the semiconductor industry and has been one of the most notable success stories of 2023. As a leading designer of graphics processing units (GPUs), NVDA’s stock value has been trending to rise in a thriving crypto market. This is mainly due to the crucial role GPUs play in data centers, artificial intelligence, and cryptocurrency mining or production.
NVIDIA’s expected earnings growth rate for the current year is 89.2%. The Zacks Consensus Estimate for current-year earnings has improved 2.5% over the past 60 days. Currently, NVIDIA sports a Zacks Rank #1.
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 198.4%. The Zacks Consensus Estimate for current-year earnings has improved 160.9% over the past 60 days. Robinhood Markets currently has a Zacks Rank #2.
Coinbase Global, Inc. COIN provides financial infrastructure and technology to support the global cryptocurrency economy. COIN provides a primary financial account for consumers in the crypto space, a marketplace with liquidity for institutional transactions of crypto assets, and technology and services enabling developers to create crypto-based applications and accept cryptocurrencies securely as payment.
Coinbase Global’s expected earnings growth rate for the current year is over 100%. The Zacks Consensus Estimate for current-year earnings has improved 357.3% over the past 60 days. Coinbase currently sports a Zacks Rank #1.
Interactive Brokers Group, Inc. IBKR is a global automated electronic broker. IBKR executes, processes and trades cryptocurrencies. IBKR’s commodity futures trading desk also offers clients the opportunity to trade cryptocurrency futures.
Interactive Brokers Group forecasts an earnings growth rate of 12.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 6.9% over the past 60 days. IBKR currently has a Zacks Rank #2.
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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