The Bitcoin (BTC) rally, which paused after the halving event in April, is now coming back strongly. Recently, Bitcoin broke through the $66,500 resistance level and was trading around $67,000 on July 29, marking a 30-day high.
Earlier this year, Bitcoin hit an all-time high of $73,750 on March 14. However, momentum slowed significantly after the April halving event. This event, which halves the reward for mining new blocks to limit the total supply of Bitcoins to 21 million, typically increases demand and prices. This time, however, the price of Bitcoin fell below $59,000.
The recent recovery suggests that Bitcoin is on track to surpass $70,000 again. Several factors are driving this rally, including political developments in the United States. President Joe Biden’s decision to withdraw from the 2024 presidential race has increased Donald Trump’s chances of winning the upcoming election. Trump is known for his favorable stance towards the cryptocurrency industry and has received Bitcoin donations for his campaigns.
Additionally, the approval of 11 spot Bitcoin exchange-traded funds (ETFs) by the Securities and Exchange Commission in January has made it easier for individual and institutional investors to invest in Bitcoin through regulated platforms. These ETFs provide a simplified and regulated way to gain exposure to Bitcoin without the complexities of direct ownership and security issues associated with digital wallets.
Additionally, the Federal Reserve’s plan to reduce interest rates after raising them to combat high inflation is expected to benefit Bitcoin. Lower interest rates generally support growth-focused assets such as technology stocks, consumer discretionary and cryptocurrencies. This policy change could attract more investors to the cryptocurrency market, seeking higher returns in a low interest rate environment.
Our best options
We have identified three cryptocurrency-oriented stocks with strong potential in 2024. Each of these stocks has a Zacks Rank #1 (Strong Buy) or 2 (Buy). Here’s why these companies stand out:
1. NVIDIA Corporation (NVDA)
NVIDIA is a world leader in visual computing technologies and the inventor of the GPU. The company has expanded its focus from PC graphics to AI-based solutions, supporting high-performance computing, gaming and virtual reality platforms. NVIDIA GPUs are essential for cryptocurrency mining, which requires high computing power. As Bitcoin and other cryptocurrencies gain traction, demand for NVIDIA’s advanced GPUs is expected to increase.
NVIDIA has an expected earnings growth rate of 106.9% for the current year, and its earnings estimate for the current year has improved 1.5% in the last 60 days. NVDA has a Zacks Rank #2. With its strong position in the AI ​​and crypto mining markets, NVIDIA is well positioned to benefit from the current cryptocurrency boom.
2. Block Inc. (SQ)
Block, the parent company of Square and Cash App, offers an online digital and mobile payment platform for consumers and merchants. Cash App users can buy, sell, send and receive Bitcoin. Block’s decentralized tbd platform allows developers to build decentralized financial applications on programmable blockchains. Block’s investment in Bitcoin and blockchain technology demonstrates its commitment to the cryptocurrency space.
Block is also one of the largest investors in Bitcoin and holds significant amounts of the cryptocurrency in his treasury. The company has an expected earnings growth rate of 72.8% for the current year, with a 0.6% improvement in current year earnings estimates over the past 60 days. SQ has a Zacks Rank #2. Block’s integrated approach to digital payments and cryptocurrencies positions it for substantial growth as the cryptocurrency market expands.
3. Interactive Brokers Group, Inc. (IBKR)
Interactive Brokers is a global automated electronic broker that facilitates cryptocurrency trading. Its commodity futures trading desk offers clients the ability to trade cryptocurrency futures. Interactive Brokers has also integrated cryptocurrency trading into its platform, allowing clients to trade Bitcoin, Ethereum, and other major cryptocurrencies directly.
The company has an expected earnings growth rate of 17.6% for the current year, with a 4.2% improvement in current year earnings estimates over the past 60 days. IBKR holds a Zacks Rank #1. Interactive Brokers’ comprehensive trading platform and cryptocurrency offerings make it a key player in the digital assets space.
Market Outlook and Conclusion
The cryptocurrency market, led by Bitcoin, continues to evolve and present new investment opportunities. As regulatory frameworks improve and institutional adoption increases, cryptocurrencies are becoming more integrated into the global financial system. This integration is supported by advances in technology, increased investor interest and favorable market conditions.
Investing in cryptocurrency-oriented stocks like NVIDIA, Block, and Interactive Brokers offers a way to gain exposure to the growing cryptocurrency market while playing to the strengths of established companies. These stocks are well positioned to benefit from the current Bitcoin rally and the wider acceptance of digital assets.
As the market continues to develop, these companies are expected to play an important role in shaping the future of finance and technology. By staying informed and investing strategically in these key players, investors can capitalize on the potential growth and innovation within the cryptocurrency sector.
Also read: Could Bitcoin Transform 1031 Exchanges for Real Estate Investors?