4 Solid Crypto Stocks to Buy Despite Bitcoin's Recent Decline

07/10/2024 22:11

Stocks like NVIDIA Corporation (NVDA), Block Inc. (SQ), Coinbase Global, Inc. (COIN) and Interactive Brokers Group, Inc. (IBKR) are likely to benefit once the crypto rally resumes.

The cryptocurrency market has been suffering over the past couple of months. Expectations were high that the crypto market would rebound after the halving event but that hasn’t happened yet, with Bitcoin (BTC), the world’s most popular cryptocurrency, trading below $60,000 after hitting an all-time high in March.

Multiple factors have been responsible for the recent decline. Last week, the crypto market suffered a jolt, with more than $170 billion wiped out from the entire space following an announcement from Mt. Gox.

Mt. Gox announced that it has started repayments in Bitcoin and Bitcoin cash to many of its creditors through designated crypto exchanges. Mt. Gox, once the world’s largest cryptocurrency trading platform which filed for bankruptcy in February 2014, said that the total repayment will be around $9 billion.

Nobuaki Kobayashi, the trustee overseeing the Mt. Gox bankruptcy estate, further mentioned that the remaining funds would be distributed to creditors once certain requirements are fulfilled.

Following the announcement, Bitcoin’s price nosedived, tanking to $53,513, its worst day since Feb 27.

However, Bitcoin still has a lot of potential and the recent decline is temporary. Bitcoin hit an all-time high of $73,750.07 Mar 14, following the Securities and Exchange Commission’s approval of 11 spot Bitcoin exchange-traded funds (ETFs) in January.

The rally came to a halt in April as the halving event started. It has since struggled to rebound as uncertainty over the Fed’s rate cut has unsettled the broader market.

However, the temporary price decline is an ideal time to buy Bitcoin. Also, Jerome Powell, the Federal Reserve Chairman, announced after the June FOMC meeting that the Fed expects to reduce interest rates only once this year, down from the three cuts projected in March.

This single 25 basis point rate cut has been received positively, especially since many in the market had previously anticipated no rate cuts for 2024.

The latest FOMC "dot plot" indicates a projected total 1% decrease in interest rates by 2025, potentially bringing the Fed funds rate to 4.1% by the end of that year.

Markets are now pricing in a rate cut in September, which could provide a boost to the cryptocurrency market. Lower interest rates typically benefit growth-oriented 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.

Block Inc. SQ 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 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 72.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the last 60 days. SQ currently carries a Zacks Rank #3.

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 more than 100% over the last 90 days. COIN currently sports a Zacks Rank #1.

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 17% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.4% over the last 60 days. IBKR currently has a Zacks Rank #2.

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