The cryptocurrency rally that gained momentum this year after a solid 2023 was halted in April. Bitcoin (BTC), the world’s most popular cryptocurrency, led this recovery, but is now suffering the most.

On June 19, Bitcoin was trading at US$64,860.25, clearly below its all-time high of US$73,750.07, reached on March 14. The last two and a half months have been turbulent for Bitcoin, with its price falling more than 18%. However, Bitcoin has gained 53.8% year-to-date and 157% in 2023.

Bitcoin’s rally gained momentum in early January after the U.S. Securities and Exchange Commission (SEC) approved 11 spot Bitcoin exchange-traded funds (ETFs).

The approval of these ETFs is being seen as a watershed moment, as they will provide retail and institutional investors with a regulated and accessible way to invest in cryptocurrency. This development not only increases liquidity, but also contributes to price stability.

Bitcoin rose more than 50% after that, but the rally was interrupted by the halving in April. The halving event, which occurs every four years, reduces the block reward by 50%, with the aim of capping the total supply of Bitcoin at 21 million coins. This reduction in the rate of supply of new Bitcoins typically increases demand for cryptocurrencies, often resulting in an increase in prices.

However, the Bitcoin halving event has already concluded and there is widespread speculation that the reduction in supply will lead to a scarcity-driven price increase for the digital asset in the near term.

Furthermore, on June 12, Federal Reserve Chairman Jerome Powell, in his post-FOMC meeting statement, said that the Fed anticipates only one rate cut this year, a significant reduction from the three cuts projected in its March meeting.

However, a single rate cut of 25 basis points in 2024 also bodes well for the cryptocurrency market and the broader economy, as several market participants had already priced in no rate cuts this year.

Low interest rates benefit growth assets such as technology stocks, consumer discretionary stocks and cryptocurrencies.

At this stage, investors should adopt a long-term perspective. The Fed is clearly approaching the end of its higher rate regime. We could see a rate cut by the end of this year if macroeconomic data remains favorable.

Our choices

We’ve narrowed down our research to four crypto-focused stocks with 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 here.

Interactive Brokers Group, Inc. IBKR is a global automated electronic broker. IBKR executes, processes and trades cryptocurrencies. The IBKR commodity futures trading desk also offers clients the opportunity to trade cryptocurrency futures.

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Interactive Brokers Group has an expected earnings growth rate of 14.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 7.3% over the past 90 days. IBKR 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 liquid marketplace for institutional transactions of crypto assets, and technology and services for developers to create crypto-based applications and securely accept cryptocurrencies 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 219.1% over the past 60 days. Coinbase currently sports a Zacks Rank #1.

NVIDIA Corporation NVDA is the 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 artificial intelligence-based solutions that now support high-performance computing, gaming, and virtual reality platforms.

NVIDIA has an expected earnings growth rate of 106.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 12.1% over the past 60 days. NVDA currently 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 over 100%. The Zacks Consensus Estimate for current-year earnings has improved 110.3% over the past 60 days. Robinhood Markets currently has a Zacks Rank #2.

Hut 8 Mining Corp. HUT is a cryptocurrency mining company based in North America. HUT provides computing power to mining pools and receives digital assets in return. The company serves commercial clients across diverse industries such as finance, healthcare, government, as well as those involved in digital assets, blockchain, gaming, virtual effects and Web 3.0.

Hut 8 Mining’s expected earnings growth rate for the current year is 50%. The Zacks Consensus Estimate for current-year earnings has improved 311.9% over the past 60 days. Hut 8 Mining currently has a Zacks Rank #2.

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