Cryptocurrencies have been under pressure recently, with Bitcoin (BTC) briefly dipping below $60,000 on June 24. Although Bitcoin recovered slightly to trade just above $61,000, it remains significantly below its all-time high of $73,750.07 reached on March 14.
In the past week, Bitcoin has dropped 6% amid heavy selling pressure, largely due to continued ETF outflows linked to the upcoming Mt. Gox bankruptcy redemptions. However, other factors have also contributed to Bitcoin’s decline after a strong performance in 2023 and the first quarter of 2024.
The Bitcoin rally gained momentum in January when the Securities and Exchange Commission approved 11 spot Bitcoin exchange-traded funds (ETFs). This move aimed to provide both retail and institutional investors with a regulated and accessible way to invest in the cryptocurrency.
In April, the rally paused due to the Bitcoin halving event, which occurs every four years, reducing the block reward by 50% and limiting the total supply of Bitcoin to 21 million coins. This reduction in new Bitcoin supply typically increases demand, often leading to a price surge.
Post-halving, there is speculation that reduced supply will drive up Bitcoin prices due to scarcity in the near term.
Additionally, on June 12, Federal Reserve Chairman Jerome Powell indicated that the Fed expects only one rate cut this year. Powell’s comments have also contributed to Bitcoin’s recent decline.
Despite the current drop, Bitcoin has rallied 43.5% year-to-date after gaining 157% in 2023. A single rate cut of 25 basis points in 2024 could benefit the cryptocurrency market and the broader economy, especially since many had anticipated no rate cut this year. Lower interest rates favor growth assets like technology stocks, consumer discretionary stocks, and cryptocurrencies.
Investors should adopt a long-term perspective. Here are three crypto-oriented stocks with strong potential for 2024, each carrying a Zacks Rank #1 (Strong Buy) or #2 (Buy):
NVIDIA Corporation (NVDA)
NVIDIA is a leader in visual computing technologies and the inventor of the GPU. The company’s focus has shifted from PC graphics to AI-based solutions supporting high-performance computing, gaming, and virtual reality. NVIDIA’s expected earnings growth rate for this year is 106.2%, with a 12.1% improvement in the Zacks Consensus Estimate over the last 60 days. NVDA holds a Zacks Rank #1.
Coinbase Global, Inc. (COIN)
Coinbase provides financial infrastructure and technology for the global cryptocurrency economy, offering main financial accounts for consumers, a marketplace for institutional crypto transactions, and services for developers to build crypto applications and accept payments. Coinbase’s expected earnings growth rate for this year exceeds 100%, with a 219.1% improvement in the Zacks Consensus Estimate over the last 60 days. COIN holds a Zacks Rank #1.
Interactive Brokers Group, Inc. (IBKR)
Interactive Brokers is a global automated electronic broker, executing and processing trades in cryptocurrencies. Its commodities futures trading desk also offers cryptocurrency futures trading. IBKR’s expected earnings growth rate for this year is 14.6%, with a 7.3% improvement in the Zacks Consensus Estimate over the last 90 days. IBKR holds a Zacks Rank #2.
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