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5 Bitcoin-focused stocks to buy amid the recent meltdown
The cryptocurrency market took a hit in April after a strong rally over the previous 15 months. On March 14, the largest cryptocurrency, Bitcoin (BTC), recorded an all-time high of 73,750.07. However, it fell by almost 15% thereafter. Bitcoin gained over 67% in the first quarter of 2024 after jumping 157% in 2023.
One of the main reasons behind the decline in Bitcoin’s price was the halving event, which occurred last month. The Bitcoin halving event occurs once every four years. Additionally, US stock markets tumbled in April due to market participants’ fears that the Fed will keep the interest rate higher for a longer period in light of the sticky inflation rate and a resilient labor market. A higher interest rate is detrimental to high-growth sectors such as technology, consumer discretionary and cryptocurrencies.
However, with the April Bitcoin halving now over, there is widespread speculation that the reduction in supply of Bitcoin will result in a scarcity-driven increase in the price of the digital asset in the coming months.
Miners who validate and record transactions receive rewards from the Bitcoin network and transaction fees. The halving reduces the block reward by half, with the goal of limiting global Bitcoin circulation to 21 million. As a result, demand for new Bitcoin increases, driving prices higher.
Meanwhile, Wall Street rebounded in early May after April’s sharp decline in new jobs, a notable deterioration in the US GDP growth rate in the first quarter of 2024, contraction in manufacturing and services PMI in April and the less-than-aggressive statement from Fed Chair Jerome Powell after the May FOMC meeting. As a result, investor expectations regarding numerous interest rate cuts in 2024 have increased.
Optimistic estimates
Several research firms have said that this is just the beginning of Bitcoin’s rally. Standard Chartered expects Bitcoin to reach $100,000 by the end of 2024. Research firm Fundstrat has given a target range of $116,000 to $137,000 for this year. Hedge fund SkyBridge predicts Bitcoin will hit $170,000 by April 2025.
Additionally, VanEck estimated a medium-term target of $350,000 for Bitcoin. Connors’ firm estimated that base case Bitcoin will reach $110,000 in 2024 and $140,000 next year. However, according to the company’s best-case scenario, the cryptocurrency will reach $180,000 in 2024 and $450,000 in 2025.
Our top picks
We’ve narrowed our search to five bitcoin-oriented stocks that have strong potential for 2024. Each of our picks carries a Zacks Rank #1. 1 (Strong Buy) or 2 (Buy). you can see the complete list of today’s Zacks #1 Rank stocks here.
The story continues
The chart below shows the price performance of our five picks over the past three months.
Zacks Investment Research
Image source: Zacks Investment Research
NVIDIA Corp. NVDA is a giant in the semiconductor industry and one of the biggest success stories of 2023. As a leading designer of graphics processing units (GPUs), NVDA stock usually soars in a booming cryptocurrency market. That’s because GPUs are critical for data centers, artificial intelligence, and crypto asset creation.
Zacks Rank #2 NVIDIA’s expected earnings growth rate for the current year is 84.7% (through January 2025). The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the past 30 days.
Coinbase Global Inc. COIN provides financial infrastructure and technology for the crypto economy in the United States and internationally. COIN offers the leading financial account in the crypto space for consumers, a marketplace with a liquidity pool for cryptocurrency transactions for institutions; and technology and services that enable developers to build cryptographic-based applications and securely accept crypto assets as payment.
Zacks Rank #1 Coinbase Global has a projected earnings growth rate above 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 11.1% over the past seven days.
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.
Zacks Rank #2 Robinhood Markets has an expected earnings growth rate above 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 16% over the past 30 days.
CleanSpark Inc. CLSK operates as a Bitcoin miner in the Americas. CLSK owns and operates data centers that run primarily on low-carbon energy. CLSK’s infrastructure supports Bitcoin, a digital asset and a tool for financial independence and inclusion.
Zacks Rank #2 CleanSpark carries an expected earnings growth rate of 89.2% for the current year (ending September 2024). The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the past 60 days.
Interactive Brokers Group Inc. IBKR is a global automated electronic broker. IBKR executes, processes and trades cryptocurrencies. IBKR’s commodity futures trading desk also offers clients the ability to trade cryptocurrency futures.
Zacks Rank #1 Interactive Brokers Group has an expected earnings growth rate of 12.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.9% over the past 30 days.
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Interactive Brokers Group, Inc. (IBKR) – Free Stock Analysis Report
NVIDIA Corporation (NVDA) – Free stock analysis report
Cleanspark, Inc. (CLSK) – Free stock analysis report
Coinbase Global, Inc. (COIN) – Free stock analysis report
Robinhood Markets, Inc. (HOOD) – Free stock analysis report