Yahoo Finance Bitcoin Surges Ahead of Fed Rate Cut: 5 Crypto-Centric Stocks to Gain
The crypto market has been struggling to stage a rebound. However, the enthusiasm surrounding rate cuts saw Bitcoin (BTC), the world’s most popular cryptocurrency, surging above $60,000 for the first time since last month.
Several factors have posed headwinds for Bitcoin over the past few months but market experts believe a rate cut will help the cryptocurrency resume its rally. Given this scenario, it would be ideal to adopt the buy-the-dip approach. Four such Bitcoin-centric stocks with upside are Interactive Brokers Group, Inc. IBKR, Robinhood Markets, Inc. HOOD, CME Group Inc.’s CME, BlackRock, Inc. BLK and NVIDIA Corporation NVDA.
Bitcoin Surges on Rate Cut Hopes
On Tuesday, Bitcoin was trading at $60,477.98 after hitting an intra-day high of $61,337. The surge came as the Federal Reserve began its two-day FOMC meeting, with expectations high that a rate cut will be announced on Wednesday.
Bitcoin has been rangebound since April, with even the halving event failing to boost its price. Halving, which typically cuts the reward for mining new Bitcoin blocks by 50% to limit the total supply to 21 million, generally boosts demand and prices. However, Bitcoin's value dropped notably after the recent halving.
In early August, a broader market bloodbath saw Bitcoin’s price fall below $55,000. The cryptocurrency has since been trying to rebound.
Rate Cut to Boost Crypto-Centric Stocks
Soft August jobs data and a marginal rise in monthly inflation have somewhat dampened hopes of a 50-basis point rate cut by the Federal Reserve. The CME FedWatch tool presently shows a 63% possibility of a 25-basis point cut this week, while a 37% probability of a 50-basis point cut.
Bitcoin had a solid 2023 and despite its recent decline, has gained 43% year to date. It hit an all-time high of $73,750 on March 14.
A rate cut is likely to help Bitcoin and other cryptocurrencies. A rate cut of any size bodes well for growth assets like cryptocurrencies as they reduce the opportunity cost of holding assets that don’t provide yields. In a low-interest-rate environment, investors are more inclined to go for assets with higher potential returns, even if they involve greater risk.
Five Crypto-Centric Stocks to Gain
We have narrowed our search to five 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.
Interactive Brokers Group, Inc.
Interactive Brokers Group, Inc. 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 18.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last 60 days. IBKR currently carries a Zacks Rank #2.
Robinhood Markets, Inc.
Robinhood Markets, Inc. 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 more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 38.2% over the last 60 days. Robinhood Markets currently carries a Zacks Rank #2.
CME Group Inc.
CME Group Inc.’s options give the buyer of the call/put the right to buy/sell cryptocurrency futures contracts at a specific price at some future date. CME offers Bitcoin and ether options based on the exchange's cash-settled standard and micro-Bitcoin and Ethereum futures contracts.
CME Group’s expected earnings growth rate for the current year is 6.4%. The Zacks Consensus Estimate for current-year earnings has improved 1.5% over the last 60 days. CME presently has a Zacks Rank #3.
BlackRock, Inc.
BlackRock, Inc. is one of the world’s largest investment managers and is publicly owned. BLK was one of the first companies from the traditional market to join the Bitcoin ETF race back in June 2023.
BlackRock’s expected earnings growth rate for the current year is 9.5%. The Zacks Consensus Estimate for current-year earnings has improved 10.3% over the last 60 days. BlackRock currently carries a Zacks Rank #3.
NVIDIA Corporation
NVIDIA Corporation is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. Over the years, NVDA’s focus has evolved from PC graphics to artificial intelligence-based solutions that now support high-performance computing, gaming and virtual reality platforms.
NVIDIA has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.1% over the last 60 days. NVDA presently carries a Zacks Rank #3.
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CME Group Inc. (CME) : Free Stock Analysis Report
BlackRock, Inc. (BLK) : Free Stock Analysis Report
Interactive Brokers Group, Inc. (IBKR) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Robinhood Markets, Inc. (HOOD) : Free Stock Analysis Report
