Cryptocurrencies have faced turbulent times recently due to a market selloff provoked by recession fears. Fortunately, the clouds have parted in the last fortnight with a wave of positive economic indicators revealing the enduring resilience of the U.S. economy.
On August 21, Bitcoin (BTC) staged a recovery, soaring past $60,770 in response to the Federal Reserve’s Federal Open Market Committee (FOMC) meeting minutes hinting at an imminent rate cut in September.
This imminent rate cut is poised to reignite Bitcoin’s momentum, given the historical correlation between lower interest rates and the attractiveness of growth-centric assets like tech stocks, consumer goods, and cryptocurrencies.
Boost for Cryptos with Rate Cuts
Insights from the FOMC’s July meeting signal the Federal Reserve’s readiness to initiate a rate cut cycle beginning with a expected 25-basis point reduction in September. This proactive move stems from the Fed’s confidence in the robustness of the U.S. economy alongside substantial decline in inflation levels, nearing the coveted 2% target.
Lower interest rates traditionally dilute the opportunity cost of holding assets that generate no yield, including Bitcoin and its crypto brethren. In a low interest environment, investors often pivot towards high-reward assets, even amidst heightened risks.
This shift could render cryptocurrencies, known for their turbulent past and potential for substantial returns, as a compelling choice for a broader spectrum of investors.
Bitcoin’s Path to Recovery
Bitcoin displayed a robust performance in the first half of this year building on its stellar 2023 run, culminating in a record-breaking high of $73,750 on March 14.
The rally gained steam earlier this year after the Securities and Exchange Commission greenlit 11 spot Bitcoin exchange-traded funds (ETFs) in January, aiming to democratize Bitcoin investment for both retail and institutional players.
Despite this, the momentum waned in April, with the much-anticipated Bitcoin halving failing to drive prices higher. Ordinarily, the halving, decreasing mining rewards by half to cap Bitcoin supply at 21 million, triggers demand surge and price upticks. Yet, Bitcoin underwent a sharp correction post-halving.
Although the rally stuttered in July and dipped below $55,000 this month, Bitcoin’s price may oscillate in the interim. But the forthcoming rate cut in September promises to rejuvenate Bitcoin and the overall crypto market.
Promising Crypto Stocks to Monitor
We’ve identified four crypto-focused stocks positioned for success in 2024, each boasting a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold). Discover the complete cohort of top-rated Zacks stocks for today.
NVIDIA Corporation
NVIDIA Corporation stands as the pioneer in visual computing technologies, celebrated as the creator of the graphic processing unit (GPU). NVDA has evolved its focus from PC graphics to cutting-edge AI solutions, supporting high-performance computing, gaming, and virtual reality platforms.
Expectations are high for NVIDIA with an anticipated earnings surge exceeding 100% for the current year. The Zacks Consensus Estimate for this year’s earnings reflects a 0.4% uptick over the past 60 days. Currently, NVDA is perched at Zacks Rank #2.
Interactive Brokers Group, Inc.
Interactive Brokers Group, Inc. functions as a global electronic broker facilitating automated trades and transactions across cryptocurrencies. With a focal point on cryptocurrencies futures trading, IBKR extends clients an avenue to engage in this dynamic market segment.
Interactive Brokers anticipates earnings growth of 18.4% this year, with a 4.9% positive revision in the Zacks Consensus Estimate in the last 60 days. IBKR holds a Zacks Rank #1.
Robinhood Markets, Inc.
Robinhood Markets, Inc. operates as a financial services hub in the U.S., facilitating investment in stocks, ETFs, options, gold, and cryptocurrencies. Through its Robinhood Crypto platform, HOOD enables transactions in Bitcoin, Ethereum, Dogecoin, and various other cryptos.
Robinhood Markets forecasts earnings growth of over 100% this year, marked by a 35.7% surge in the Zacks Consensus Estimate over the past 60 days. Robinhood Markets boasts a Zacks Rank #1.
Block, Inc.
Block, Inc. serves as an online payment platform for consumers and merchants, while doubling as Square and Cash App’s parent company. Cash App users indulge in Bitcoin trading, and SQ’s decentralized tbd platform empowers developers to concoct decentralized finance applications on programmable blockchains. SQ stands tall as one of the largest Bitcoin purveyors.
Block anticipates an earning growth of 99% this year, with a 9.1% elevation in the Zacks Consensus Estimate over the past 60 days. SQ currently holds a Zacks Rank #3.
Unlocking the Potential
With a promise of economic growth and prosperity, investors are always on the hunt for stocks that have the potential to double in value. The allure of capturing such exponential gains can be irresistible, much like discovering a hidden treasure trove.
Under the Radar
These “under the radar” stocks have the potential to present an exciting prospect for investors looking to get in at the nascent stages of a potential financial boom. It’s akin to finding a rare gem in a vast market filled with options.
Interactive Brokers Group, Inc. (IBKR) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report