3 Bitcoin-Related Stocks to Gain From Crypto Rally

10/18/2024 02:21

Bitcoin-centric stocks like Robinhood Markets (HOOD), NVIDIA (NVDA) and CME Group (CME) are poised to benefit from the ongoing rally.

The cryptocurrency market is staging a solid comeback, with Bitcoin (BTC) on track to hit $70,000 after falling below $60,000 last month. The Federal Reserve’s jumbo rate cut announcement in September amid the upcoming U.S. election has raised optimism surrounding riskier assets, especially tech stocks and cryptocurrencies.

Given this scenario, it would be ideal to invest in Bitcoin-centric stocks such as Robinhood Markets, Inc. HOOD, NVIDIA Corporation NVDA and CME Group Inc. CME that have strong growth potential in the near term.

Bitcoin Rebounds From Recent Lows

Bitcoin was trading at $67,249.66 on Thursday. The world’s most popular cryptocurrency had reached $68,376 on Wednesday. It is now well on track to hit new highs with optimism building around riskier assets following the Fed’s 50-basis-point rate cut last month and the looming U.S. Presidential election, which is less than a month away.

Also, increased global liquidity and China’s economic stimulus have been fueling the ongoing rally. Bitcoin last traded above $70,000 in July after reaching an all-time high of $73,750 on March 14. The cryptocurrency is now up 11% for the week, the largest reading since April and a 10-week high.

The Federal Reserve has been maintaining a dovish stance since it announced its first rate cut in more than four years last month. Market participants are hopeful about two more 25 basis point interest rate cuts this year, which is likely to further boost the crypto rally.

Lower interest rates favor growth assets such as cryptocurrencies because they decrease the opportunity cost of holding non-yielding assets. In a low-interest-rate setting, investors often seek out assets that offer greater potential returns, even if they come with increased risks.

3 Bitcoin-Related Stocks With Upside

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 90 days. Robinhood Markets currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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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 #2.

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CME Group

CME Group Inc.’s options give the buyer of the call/put the right to buy/sell cryptocurrency futures contracts at a specific price at some future date. CME offers Bitcoin and ether options based on the exchange's cash-settled standard and micro-Bitcoin and Ethereum futures contracts.

CME Group’s expected earnings growth rate for the current year is 7.9%. The Zacks Consensus Estimate for current-year earnings has improved 3.2% over the last 90 days. CME presently has a Zacks Rank #2.

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