5 Bitcoin-Centric Stocks to Buy Amid Recent Meltdown

The cryptocurrency market suffered a serious blow in April after a strong rise in the previous 15 months. The largest cryptocurrency, Bitcoin (BTC), recorded an all-time high of 73,750.07 on March 14. However, there was a decrease of nearly 15 percent later. Bitcoin gained more than 67% in the first quarter of 2024, following a 157% increase in 2023.

One of the biggest reasons for the decline in Bitcoin price was the halving event that took place last month. Bitcoin halving event occurs every four years. Moreover, U.S. stock markets tumbled in April due to market participants’ concerns that the Fed would keep interest rates higher for longer in light of the sticky inflation rate and resilient labor market. A higher interest rate is detrimental to fast-growing sectors such as technology, consumer discretionary and cryptocurrency.

However, with the Bitcoin halving event in April now concluded, there is widespread speculation that the reduction in Bitcoin supply will lead to scarcity-induced price increases for the digital asset in the coming months.
Miners who verify and record transactions receive rewards from the Bitcoin network and transaction fees. Halving aims to limit Bitcoin’s global circulation to 21 million by halving the block reward. As a result, demand for new Bitcoins increases and prices rise.

Wall Street, meanwhile, rebounded in early May following the sharp decline in employment gains in April, the apparent deterioration in the US GDP growth rate in the first quarter of 2024, the contraction in manufacturing and services PMI in April, and the less-than-hawkish US statement. Fed Chairman Jerome Powell after the FOMC meeting in May. As a result, investors’ expectations regarding the number of interest rate cuts in 2024 have increased.

Optimistic Forecasts

Many 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 set a target range of $116,000 to $137,000 for this year. Hedge fund SkyBridge predicts Bitcoin will reach $170,000 by April 2025.

Additionally, VanEck predicted a medium-term target for Bitcoin at $350,000. Connors’ firm estimates that the base case scenario is Bitcoin reaching $110,000 in 2024 and $140,000 next year. However, according to the company’s best-case scenario, the cryptocurrency will reach $180,000 in 2024 and $450,000 in 2025.

Our Most Preferred

We’ve narrowed our search to five bitcoin-focused stocks with 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 story continues

The chart below shows the price performance of our five picks over the last three months.

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Image Source: Zacks Investment Research

NVIDIA Corp. NVDA is a semiconductor industry giant and one of the biggest success stories of 2023. As a leading designer of graphics processing units (GPUs), NVDA shares are often bullish on the emerging crypto market. This is because GPUs are crucial for data centers, AI, and the creation of crypto assets.

Zacks Rank #2 NVIDIA’s expected earnings growth rate for the current year (ending January 2025) is 84.7%. The Zacks Consensus Estimate for current-year earnings has increased 0.4% over the past 30 days.

Coinbase Global Inc. COIN provides financial infrastructure and technology for the crypto economy in the United States and internationally. COIN provides the primary financial account in the crypto space for consumers and a marketplace with a liquidity pool for institutions to trade crypto assets; 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 earnings growth expectations of over 100% for this year. The Zacks Consensus Estimate for current-year earnings has moved 11.1% higher over the past seven days.

Robinhood Markets Inc. HOOD 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 the Robinhood Crypto platform.

Zacks Rank #2 Robinhood Markets has an expected earnings growth rate of over 100% for the year. The Zacks Consensus Estimate for current-year earnings has increased 16% over the past 30 days.

CleanSpark Inc. CLSK operates as a Bitcoin miner in America. CLSK owns and operates data centers powered primarily by low-carbon energy. CLSK’s infrastructure supports Bitcoin, a digital commodity and 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 increased more than 100% over the past 60 days.

Interactive Brokers Group Inc. IBKR is a global automated electronic broker. IBKR operates, processes and trades cryptocurrencies. IBKR’s commodity futures trading desk also offers clients the chance to trade cryptocurrency futures.

Zacks Rank #1 Interactive Brokers Group’s expected earnings growth rate for the current year is 12.4%. The Zacks Consensus Estimate for current-year earnings has moved 4.9% higher over the past 30 days.

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Interactive Brokers Group, Inc. (IBKR): Free Stock Analysis Report

NVIDIA Corporation (NVDA): Free Stock Analysis Report

Cleanspark, Inc. (CLSK): Free Stock Analysis Report

Coinbase Global, Inc. (COIN): Free Stock Analysis Report

Robinhood Markets, Inc. (HOOD): Free Stock Analysis Report

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