Cash News
The cryptocurrency market has been going through a rough patch over the past few weeks. Bitcoin (BTC), the world’s most popular cryptocurrency, has particularly suffered the most in the past two months after hitting an all-time high earlier this year. Several factors have been responsible for Bitcoin’s recent decline, including a broader market selloff in early August.
However, Bitcoin still has a lot of potential, and thinking from the long-term perspective, with the Federal Reserve nearing the end of its monetary tightening campaign, it would be ideal to adopt the buy-the-dip approach. Four Bitcoin-centric stocks with upside potential are Interactive Brokers Group, Inc. IBKR, Block Inc. SQ, NVIDIA Corporation NVDA and Robinhood Markets, Inc. HOOD.
Multiple Factors Hurting Bitcoin Stocks
Bitcoin has been in the bear market for the past two months. The cryptocurrency presently is trading at around $58,091.90, down more than 21% from its all-time high of $73,750 on March 14.
Bitcoin has been rangebound since April, briefly crossing the $65,000 mark in June. Even the halving event in April failed to boost Bitcoin’s price. The halving event—which typically reduces the reward for mining new blocks by 50% to cap the total Bitcoin supply at 21 million—tends to drive up demand and prices. However, this time, Bitcoin’s value fell significantly after the halving.
The cryptocurrency market took a further blow during the broader market bloodbath in early August that was triggered by fears of a slowing economy. Bitcoin price fell below $55,000 after that. However, Bitcoin has since been trying to stage a comeback but has been rangebound.
Bitcoin Stocks to Benefit From Rate Cuts
Although the Federal Reserve is unlikely to go for a big rate cut following the release of soft inflation data, investors are confident that the central bank will cut interest by at least 25 basis points.
Presently, the CME FedWatch tool shows a 100% probability of a 25-basis point interest rate cut in the Fed’s September FOMC meeting. For November, market experts predict a 100% chance that the total (year-to-date) rate cut will be 50 basis points and a 94.4% possibility that it will reach 75 basis points.
Any size of rate cut bodes well for growth assets like cryptocurrencies as they reduce the opportunity cost of holding assets that don’t provide yields. In a low-interest-rate environment, investors are more inclined to seek assets with higher potential returns, even if they involve greater risk.
4 Crypto-Centric Stocks With Upside Potential
We have 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.
Interactive Brokers Group
Interactive Brokers Group is a global automated electronic broker. IBKR executes, processes and trades in cryptocurrencies. IBKR’s commodities futures trading desk also offers customers a chance to trade cryptocurrency futures.
Interactive Brokers Group has an expected earnings growth rate of 18.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.6% over the last 60 days. IBKR currently carries a Zacks Rank #3.
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Block
Block 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 the 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 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 9.8% over the past 60 days. SQ currently carries a Zacks Rank #3.
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NVIDIA
NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphic 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 more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.5% over the past 60 days. NVDA presently carries a Zacks Rank #3.
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Robinhood Markets
Robinhood Markets 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 more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 38.2% over the past 60 days. Robinhood Markets currently carries a Zacks Rank #2.
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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
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