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The cryptocurrency space regained momentum last month buoyed by several positives. The momentum has gathered pace this month. Speculation that the Securities and Exchange Commission (SEC) is set to approve a Bitcoin exchange-traded fund (ETF) has also raised investors’ optimism. A plethora of recent crypto industry legal victories is likely spurring investor confidence.
On Nov 30, the SEC called for public opinion on a proposed rule change that will allow Fidelity Investments, an asset management giant, to list and trade shares of the Fidelity Ethereum Fund.
The largest thrust for the crypto space has come from institutional investors. BlackRock Inc.’s (BLK) decision to launch a Bitcoin ETF and the decision of The Charles Schwab Corp. (SCHW)-led consortium to create a new crypto exchange called EDX Markets, have attracted several investors toward cryptocurrencies.
The latest addition to this league is PayPal Holdings Inc. (PYPL), which has become the first major U.S. fintech company to offer its own crypto token with a dollar-pegged stablecoin known as PayPal USD.
Investors' growing belief that the Federal Reserve will halt rate hikes amid cooling inflation is turning attention to potential rate cuts in the upcoming year. According to CME’s FedWatch tool, traders are now pricing in a 70% chance for a rate cut by the U.S. central bank within March 2024.
Moreover, the next Bitcoin Halving will occur in the first half of 2024. When a halving occurs, the reward for mining new blocks is halved, making it more challenging for miners to earn net Bitcoins. Historically, this event has led to increased scarcity and has driven up the value of Bitcoin due to reduced supply.
As a result, prices of major cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), Dogecoin (DOGE) and BNB (BNB) are expected to remain buoyant for the rest of 2023. On Dec 3, Bitcoin surged past the $42,000 mark for the first time since April 2022. This represents a year-over-year increase of 142% in the cryptocurrency’s value.
The chart below shows the price performance of our five picks in the past month.
Image Source: Zacks Investment Research
NVIDIA Corp. (NVDA - Free Report) is a semiconductor industry giant and one of the biggest success stories of 2023. As a leading designer of graphic processing units (GPUs), the NVDA stock usually soars on a booming crypto market. This is because GPUs are pivotal to data centers, artificial intelligence, and the creation of crypto assets.
NVIDIA’s expected earnings growth rate for the current year is more than 100% (ending January 2024). The Zacks Consensus Estimate for its current-year earnings has improved 0.8% over the last seven days.
Coinbase Global Inc. (COIN - Free Report) provides financial infrastructure and technology for the crypto economy in the United States and internationally. COIN offers the primary financial account in the crypto space for consumers, a marketplace with a pool of liquidity for transacting in crypto assets for institutions; and technology and services that enable developers to build crypto-based applications and securely accept crypto assets as payment.
Coinbase Global has an expected earnings growth rate of 91.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 44.9% over the last 30 days.
Block Inc. (SQ - Free Report) 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 90% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 16.6% over the last 30 days.
Interactive Brokers Group Inc. (IBKR - Free Report) 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 41.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.1% over the last 30 days.
Hut 8 Mining Corp. (HUT - Free Report) has recently merged with US Bitcoin Corp to increase its total hash rate substantially. HUT aims to increase its total hash rate to 9.8 EH/s.
Hut 8 Mining has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the last 30 days.
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5 Crypto-Centric Stocks to Buy to Tap the Rally
The cryptocurrency space regained momentum last month buoyed by several positives. The momentum has gathered pace this month. Speculation that the Securities and Exchange Commission (SEC) is set to approve a Bitcoin exchange-traded fund (ETF) has also raised investors’ optimism. A plethora of recent crypto industry legal victories is likely spurring investor confidence.
On Nov 30, the SEC called for public opinion on a proposed rule change that will allow Fidelity Investments, an asset management giant, to list and trade shares of the Fidelity Ethereum Fund.
The largest thrust for the crypto space has come from institutional investors. BlackRock Inc.’s (BLK) decision to launch a Bitcoin ETF and the decision of The Charles Schwab Corp. (SCHW)-led consortium to create a new crypto exchange called EDX Markets, have attracted several investors toward cryptocurrencies.
The latest addition to this league is PayPal Holdings Inc. (PYPL), which has become the first major U.S. fintech company to offer its own crypto token with a dollar-pegged stablecoin known as PayPal USD.
Investors' growing belief that the Federal Reserve will halt rate hikes amid cooling inflation is turning attention to potential rate cuts in the upcoming year. According to CME’s FedWatch tool, traders are now pricing in a 70% chance for a rate cut by the U.S. central bank within March 2024.
Moreover, the next Bitcoin Halving will occur in the first half of 2024. When a halving occurs, the reward for mining new blocks is halved, making it more challenging for miners to earn net Bitcoins. Historically, this event has led to increased scarcity and has driven up the value of Bitcoin due to reduced supply.
As a result, prices of major cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), Dogecoin (DOGE) and BNB (BNB) are expected to remain buoyant for the rest of 2023. On Dec 3, Bitcoin surged past the $42,000 mark for the first time since April 2022. This represents a year-over-year increase of 142% in the cryptocurrency’s value.
Our Top Picks
We have narrowed our search to five crypto-centric stocks with strong potential for the rest of 2023. Each of our picks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The chart below shows the price performance of our five picks in the past month.
Image Source: Zacks Investment Research
NVIDIA Corp. (NVDA - Free Report) is a semiconductor industry giant and one of the biggest success stories of 2023. As a leading designer of graphic processing units (GPUs), the NVDA stock usually soars on a booming crypto market. This is because GPUs are pivotal to data centers, artificial intelligence, and the creation of crypto assets.
NVIDIA’s expected earnings growth rate for the current year is more than 100% (ending January 2024). The Zacks Consensus Estimate for its current-year earnings has improved 0.8% over the last seven days.
Coinbase Global Inc. (COIN - Free Report) provides financial infrastructure and technology for the crypto economy in the United States and internationally. COIN offers the primary financial account in the crypto space for consumers, a marketplace with a pool of liquidity for transacting in crypto assets for institutions; and technology and services that enable developers to build crypto-based applications and securely accept crypto assets as payment.
Coinbase Global has an expected earnings growth rate of 91.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 44.9% over the last 30 days.
Block Inc. (SQ - Free Report) 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 90% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 16.6% over the last 30 days.
Interactive Brokers Group Inc. (IBKR - Free Report) 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 41.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.1% over the last 30 days.
Hut 8 Mining Corp. (HUT - Free Report) has recently merged with US Bitcoin Corp to increase its total hash rate substantially. HUT aims to increase its total hash rate to 9.8 EH/s.
Hut 8 Mining has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the last 30 days.