4 Bitcoin Stocks to Boost Your Portfolio Before the Next Rally

07/04/2024 20:24

Stocks like NVIDIA Corporation (NVDA), Robinhood Markets, Inc. (HOOD), Interactive Brokers Group, Inc. (IBKR) and Coinbase Global, Inc. (COIN) are likely to benefit once the Bitcoin rally resumes.

The cryptocurrency market has been suffering over the past three months, with Bitcoin's (BTC) price nosediving after hitting an all-time high in March. On Jul 3, Bitcoin price was hovering around $58,600, a sharp decline from the all-time high of $73,750.07 it hit on Mar 14.

Bitcoin had a solid rally in 2023, wherein the cryptocurrency gained 157%. This year began on a high. The Securities and Exchange Commission approved 11 spot Bitcoin exchange-traded funds (ETFs) in January in a bid to allow both retail and institutional investors a regulated and accessible way to invest in the cryptocurrency.

The landmark decision added fuel to the rally. Since the approval, the ETFs have attracted net inflows of about $14.41 billion to date, according to a recent report from CCData.

However, the rally came to a halt in April with the beginning of the halving event, which takes place once in four years. The Bitcoin halving cuts the block reward by 50% in a bid to limit the total supply of Bitcoin to 21 million coins. The reduction in the rate of new Bitcoin supply increases demand for cryptocurrencies, resulting in a price surge.

The recent decline is temporary, as the effects of the halving event are yet to fade out completely. Also, Jerome Powell, the Federal Reserve Chairman, announced after the June FOMC meeting that the Fed anticipates only one rate cut this year, a decline from the three cuts projected in March.

However, even a single 25 basis point rate cut has been welcomed positively, especially since many market participants had previously expected no rate cuts in 2024.

Moreover, the latest FOMC "dot plot" forecasts a cumulative 1% decrease in interest rates by 2025. According to this projection, the Fed funds rate could potentially drop to 4.1% by the end of 2025. This outlook is seen as beneficial for sectors like manufacturing and the overall economy.

Markets are pricing in a rate cut in September, which is likely to boost the cryptocurrency market. Low interest rates positively impact growth assets like technology stocks, consumer discretionary stocks and cryptocurrencies.

Our Choices

We have narrowed our search to three crypto-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.

NVIDIA Corporation NVDA 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 106.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 12.1% over the last 60 days. NVDA presently 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 more than 100%.The Zacks Consensus Estimate for current-year earnings has improved 93.1% over the last 60 days. Robinhood Markets currently has a Zacks Rank #2.

Interactive Brokers Group, Inc. IBKR 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 16.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.4% over the last 60 days. IBKR currently has a Zacks Rank #2.

Coinbase Global, Inc.COIN offers financial infrastructure and technology to support the global cryptocurrency economy. It provides a main financial account for consumers in the crypto space, a marketplace with liquidity for institutional crypto asset transactions, and technology and services for developers to build crypto-based applications and accept cryptocurrencies securely as payment.

Coinbase Global’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 2.6% over the last 60 days. COIN currently sports a Zacks Rank #1.

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