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Cryptocurrency Likely to Resume Rally: 4 Stocks Set to Gain

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The cryptocurrency rally in the first quarter that saw Bitcoin (BTC) hitting a new all-time high, has suddenly come to a halt. Bitcoin, which hit a record high of $73,750 on Mar 14, has declined sharply since then.

In April, Bitcoin declined 3.9%, after gaining more than 67% in the first quarter. The decline can be attributed to a number of factors, most importantly the just-concluded halving event, which happens once in four years.

Also, markets remained volatile in April as rising inflation reignited fears that the Federal Reserve could keep interest rates higher for a longer period. High-interest rates have a negative impact on growth assets such as technology stocks, consumer discretionary stocks, and cryptocurrencies.

However, with the Bitcoin halving event now over, there is widespread speculation that the reduction in the supply of Bitcoins will lead to a scarcity-driven price surge for the digital asset in the coming months.

Miners, who play a crucial role in validating and recording transactions, receive rewards from the Bitcoin network in the form of both block rewards and transaction fees. The halving event reduces the block reward by half, ultimately aiming to limit Bitcoin's total supply to 21 million coins. As a result, the decrease in the rate of new Bitcoin issuance typically leads to increased demand for the cryptocurrency, which in turn tends to drive up its price.

Needless to say, Bitcoin still has a lot of potential. Experts believe the correction is over and the cryptocurrency will soon resume its rally. Year to date, Bitcoin has rallied 39.3%. Also, markets have been trying to bounce back in May, following a sharp decline in U.S. GDP, and a contraction in manufacturing and services PMI, which has raised hopes of multiple rate cuts this year.

Our Choices

We have narrowed our search to four crypto-oriented stocks that have strong potential for 2024. Each of our picks carries either a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

NVIDIA Corporation (NVDA - Free Report) is a major player in the semiconductor industry and has been one of the standout success stories of 2023. As a leading designer of graphic processing units (GPUs), the value of the NVDA stock tends to surge in a thriving crypto market. This is primarily due to the crucial role that GPUs play in data centers, artificial intelligence and the mining or production of cryptocurrencies.

NVIDIA’s expected earnings growth rate for the current year is 84.7%. The Zacks Consensus Estimate for current-year earnings has improved 3.1% over the last 60 days. Currently, NVIDIA has a Zacks Rank #2.

Coinbase Global, Inc. (COIN - Free Report) offers financial infrastructure and technology to support the global cryptocurrency economy. COIN provides a main financial account for consumers in the crypto space, a marketplace with liquidity for institutional crypto asset transactions, and technology and services for developers to build crypto-based applications and accept cryptocurrencies securely as payment.

Coinbase Global’s expected earnings growth rate for next year is 1,840.5%. The Zacks Consensus Estimate for current-year earnings has improved 402.1% over the last 60 days. Coinbase currently sports a Zacks Rank #1.

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 12.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 6.9% over the last 60 days. IBKR currently has a Zacks Rank #2.

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.

Robinhood Markets’ expected earnings growth rate for the current year is 190.2%.The Zacks Consensus Estimate for current-year earnings has improved 175% over the last 60 days. Robinhood Markets currently has a Zacks Rank #2.

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