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5 Bitcoin-Centric Stocks to Buy Amid Recent Meltdown
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The cryptocurrency market suffered a severe blow in April after a strong rally in the previous 15 months. On Mar 14, the largest cryptocurrency, Bitcoin (BTC), recorded an all-time high of 73,750.07. However, it has fallen nearly 15% thereafter. Bitcoin gained more than 67% in first-quarter 2024 after jumping 157% in 2023.
One of the major reasons behind the decline in Bitcoin price was the halving event, which took place last month. The Bitcoin halving event happens once in four years. Moreover, U.S. equity markets tumbled in April owing to market participants’ concern that the Fed will keep the interest rate higher for longer in light of the sticky inflation rate and a resilient labor market. A higher interest rate is detrimental to high-growth sectors like technology, consumer discretionary and cryptocurrency.
Nevertheless, with the April Bitcoin halving event now concluded, there is widespread speculation that the reduction in the supply of Bitcoins will result in a scarcity-driven price increase for the digital asset in the upcoming months. Miners who validate and record transactions receive rewards from the Bitcoin network and transaction fees. Halving reduces the block reward by half, aiming to cap Bitcoin's global circulation at 21 million. Consequently, demand for new Bitcoins increases, driving up prices.
Meanwhile, Wall Street rebounded in early May following a sharp decline in the April job additions, a notable deterioration of the U.S. GDP growth rate in first-quarter 2024, the contraction of manufacturing and services PMI in April and less-than-hawkish statement by Fed Chairman Jerome Powell after the May FOMC meeting. Consequently, investors’ expectations for the number of interest rate cuts in 2024 rose.
Optimistic Estimates
Several research firms have said that this is just the beginning of the Bitcoin rally. Standard Chartered expects Bitcoin to reach $100,000 by the end of 2024. Research firm Fundstrat has provided a target range of $116,000 to $137,000 for this year. Hedge fund SkyBridge predicts Bitcoin to touch $170,000 by April 2025.
Furthermore, VanEck estimated a medium-term target of $350,000 for Bitcoin. Connors' firm has estimated that the base case Bitcoin will reach $110,000 in 2024 and $140,000 next year. However, according to the firm’s best-case scenario, the cryptocurrency will hit $180,000 in 2024 and $450,000 in 2025.
Our Top Picks
We have narrowed our search to five bitcoin-oriented stocks that have strong potential for 2024. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2(Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past three months.
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.
Zacks Rank #2 NVIDIA’s expected earnings growth rate for the current year is 84.7% (ending January 2025). The Zacks Consensus Estimate for its current-year earnings has improved 0.4% over the last 30 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.
Zacks Rank #1 Coinbase Global has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 11.1% over the last seven days.
Robinhood Markets Inc. (HOOD - Free Report) 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 of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 16% over the last 30 days.
CleanSpark Inc. (CLSK - Free Report) operates as a Bitcoin miner in the Americas. CLSK owns and operates data centers that primarily run on low-carbon power. CLSK’s infrastructure supports Bitcoin, a digital commodity and a tool for financial independence and inclusion.
Zacks Rank #2 CleanSpark has 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 last 60 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.
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 last 30 days.
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5 Bitcoin-Centric Stocks to Buy Amid Recent Meltdown
The cryptocurrency market suffered a severe blow in April after a strong rally in the previous 15 months. On Mar 14, the largest cryptocurrency, Bitcoin (BTC), recorded an all-time high of 73,750.07. However, it has fallen nearly 15% thereafter. Bitcoin gained more than 67% in first-quarter 2024 after jumping 157% in 2023.
One of the major reasons behind the decline in Bitcoin price was the halving event, which took place last month. The Bitcoin halving event happens once in four years. Moreover, U.S. equity markets tumbled in April owing to market participants’ concern that the Fed will keep the interest rate higher for longer in light of the sticky inflation rate and a resilient labor market. A higher interest rate is detrimental to high-growth sectors like technology, consumer discretionary and cryptocurrency.
Nevertheless, with the April Bitcoin halving event now concluded, there is widespread speculation that the reduction in the supply of Bitcoins will result in a scarcity-driven price increase for the digital asset in the upcoming months.
Miners who validate and record transactions receive rewards from the Bitcoin network and transaction fees. Halving reduces the block reward by half, aiming to cap Bitcoin's global circulation at 21 million. Consequently, demand for new Bitcoins increases, driving up prices.
Meanwhile, Wall Street rebounded in early May following a sharp decline in the April job additions, a notable deterioration of the U.S. GDP growth rate in first-quarter 2024, the contraction of manufacturing and services PMI in April and less-than-hawkish statement by Fed Chairman Jerome Powell after the May FOMC meeting. Consequently, investors’ expectations for the number of interest rate cuts in 2024 rose.
Optimistic Estimates
Several research firms have said that this is just the beginning of the Bitcoin rally. Standard Chartered expects Bitcoin to reach $100,000 by the end of 2024. Research firm Fundstrat has provided a target range of $116,000 to $137,000 for this year. Hedge fund SkyBridge predicts Bitcoin to touch $170,000 by April 2025.
Furthermore, VanEck estimated a medium-term target of $350,000 for Bitcoin. Connors' firm has estimated that the base case Bitcoin will reach $110,000 in 2024 and $140,000 next year. However, according to the firm’s best-case scenario, the cryptocurrency will hit $180,000 in 2024 and $450,000 in 2025.
Our Top Picks
We have narrowed our search to five bitcoin-oriented stocks that have strong potential for 2024. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2(Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past three months.
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.
Zacks Rank #2 NVIDIA’s expected earnings growth rate for the current year is 84.7% (ending January 2025). The Zacks Consensus Estimate for its current-year earnings has improved 0.4% over the last 30 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.
Zacks Rank #1 Coinbase Global has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 11.1% over the last seven days.
Robinhood Markets Inc. (HOOD - Free Report) 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 of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 16% over the last 30 days.
CleanSpark Inc. (CLSK - Free Report) operates as a Bitcoin miner in the Americas. CLSK owns and operates data centers that primarily run on low-carbon power. CLSK’s infrastructure supports Bitcoin, a digital commodity and a tool for financial independence and inclusion.
Zacks Rank #2 CleanSpark has 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 last 60 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.
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 last 30 days.