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The cryptocurrency market has regained its glory this year. Last year was disappointing as the Fed pursued aggressive monetary control with a massive hike in the benchmark lending rate to combat 40-year high inflation.
However, the cryptocurrency market has remained rangebound in the past 10 weeks as market participants are concerned about the Fed’s policy prescriptions. In his post-FOMC meeting statement in September, Fed Chairman Jerome Powell warned of one more rate hike of 25 basis points by the end of this year and a higher interest rate regime for a longer-than-expected period.
A high interest rate is detrimental to growth assets like technology stocks, consumer discretionary stocks and cryptocurrencies. Tighter monetary control also raised concerns that the economy may fall into a recession in the near future.
Following Powell’s warning, the yield on the benchmark 10-Year U.S. Treasury Note jumped to 4.8% this week, a level last seen just before the financial crisis of 2008. This yield is of immense importance as it reflects market participants’ perception about the country’s economic conditions affecting consumers, corporations and government agencies.
The fear of a recession in the near future, which almost evaporated just two and a half months ago following a steady decline in the inflation rate and reduction of the magnitude and frequency of interest rate hikes by the central bank, has suddenly erupted in the past three weeks. Major cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), Dogecoin (DOGE) and BNB (BNB) are also bearing the brunt of it.
Stocks to Watch
NVIDIA Corp. (NVDA - Free Report) is a semiconductor industry giant and one of the biggest success stories of 2023. Being a leading designers 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.
NVIDIA’s expected earnings growth rate for the current year is more than 100% (ending January 2024). The Zacks Consensus Estimate for its current-year earnings has improved 2% over the last 30 days. NVDA currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Visa Inc. (V - Free Report) is taking a significant step toward modernizing cross-border money movement. In a move aimed at enhancing the efficiency of global transactions, V is expanding its stablecoin settlement capabilities to the high-performing Solana blockchain. This expansion of V includes collaboration with prominent merchant acquirers Worldpay and Nuvei, marking a pivotal development in the world of digital payments.
Visa has an expected earnings growth rate of 13% for the current year (ending September 2024). The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 30 days. V currently carries a Zacks Rank #2 (Buy).
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.
Coinbase Global has an expected earnings growth rate of 84.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 30% over the last 90 days. COIN currently carries a Zacks Rank #3 (Hold).
Block Inc. (SQ - Free Report) is an online digital and mobile payment platform for consumers and merchants and is the parent company of Square and Cash App. The users of Cash App can buy, sell, send and receive Bitcoin. In addition, SQ’s decentralized tbd platform allows developers to build decentralized finance applications to run on programmable blockchains. SQ is also one of the largest Bitcoin investors.
Block has an expected earnings growth rate of 69% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.4% over the last 30 days. SQ currently carries a Zacks Rank #3.
CME Group Inc.’s (CME - Free Report) options give the buyer of the call/put the right to buy/sell cryptocurrency futures contract at a specific price at some future date. CME offers bitcoin and ether options based on the exchange's cash-settled standard and micro BTC and ETH futures contracts.
CME Group has an expected earnings growth rate of 69% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last seven days. CME currently carries a Zacks Rank #3.
The chart below shows the price performance of our five above-mentioned stocks in the past three months.
Image Source: Zacks Investment Research
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5 Crypto Stocks to Watch in a Rangebound Market
The cryptocurrency market has regained its glory this year. Last year was disappointing as the Fed pursued aggressive monetary control with a massive hike in the benchmark lending rate to combat 40-year high inflation.
However, the cryptocurrency market has remained rangebound in the past 10 weeks as market participants are concerned about the Fed’s policy prescriptions. In his post-FOMC meeting statement in September, Fed Chairman Jerome Powell warned of one more rate hike of 25 basis points by the end of this year and a higher interest rate regime for a longer-than-expected period.
A high interest rate is detrimental to growth assets like technology stocks, consumer discretionary stocks and cryptocurrencies. Tighter monetary control also raised concerns that the economy may fall into a recession in the near future.
Following Powell’s warning, the yield on the benchmark 10-Year U.S. Treasury Note jumped to 4.8% this week, a level last seen just before the financial crisis of 2008. This yield is of immense importance as it reflects market participants’ perception about the country’s economic conditions affecting consumers, corporations and government agencies.
The fear of a recession in the near future, which almost evaporated just two and a half months ago following a steady decline in the inflation rate and reduction of the magnitude and frequency of interest rate hikes by the central bank, has suddenly erupted in the past three weeks. Major cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), Dogecoin (DOGE) and BNB (BNB) are also bearing the brunt of it.
Stocks to Watch
NVIDIA Corp. (NVDA - Free Report) is a semiconductor industry giant and one of the biggest success stories of 2023. Being a leading designers 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.
NVIDIA’s expected earnings growth rate for the current year is more than 100% (ending January 2024). The Zacks Consensus Estimate for its current-year earnings has improved 2% over the last 30 days. NVDA currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Visa Inc. (V - Free Report) is taking a significant step toward modernizing cross-border money movement. In a move aimed at enhancing the efficiency of global transactions, V is expanding its stablecoin settlement capabilities to the high-performing Solana blockchain. This expansion of V includes collaboration with prominent merchant acquirers Worldpay and Nuvei, marking a pivotal development in the world of digital payments.
Visa has an expected earnings growth rate of 13% for the current year (ending September 2024). The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 30 days. V currently carries a Zacks Rank #2 (Buy).
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.
Coinbase Global has an expected earnings growth rate of 84.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 30% over the last 90 days. COIN currently carries a Zacks Rank #3 (Hold).
Block Inc. (SQ - Free Report) is an online digital and mobile payment platform for consumers and merchants and is the parent company of Square and Cash App. The users of Cash App can buy, sell, send and receive Bitcoin. In addition, SQ’s decentralized tbd platform allows developers to build decentralized finance applications to run on programmable blockchains. SQ is also one of the largest Bitcoin investors.
Block has an expected earnings growth rate of 69% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.4% over the last 30 days. SQ currently carries a Zacks Rank #3.
CME Group Inc.’s (CME - Free Report) options give the buyer of the call/put the right to buy/sell cryptocurrency futures contract at a specific price at some future date. CME offers bitcoin and ether options based on the exchange's cash-settled standard and micro BTC and ETH futures contracts.
CME Group has an expected earnings growth rate of 69% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last seven days. CME currently carries a Zacks Rank #3.
The chart below shows the price performance of our five above-mentioned stocks in the past three months.
Image Source: Zacks Investment Research