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5 Crypto-Centric Stocks to Watch in 2024 After a Solid 2023
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The cryptocurrency market witnessed an impressive turnaround in 2023 after a highly disappointing 2022. Bitcoin (BTC), the largest cryptocurrency worldwide, soared 157% last year. Other major cryptocurrencies such as Ethereum (ETH), Cardano (ADA), Dogecoin (DOGE) and BNB (BNB) also saw massive price hikes.
The space is likely to remain buoyant in 2024. U.S. stock markets have soared amid a clear indication from the Fed’s December FOMC meeting that the current interest rate hike cycle, which elevated the Fed fund rate to a 22-year high of 5.25-5.50% from 0-0.25% in March 2022, has finally ended. Moreover, the December FOMC meeting dot-plot showed that on average, Fed officials are expecting at least three rate cuts of 25 basis points each in 2024.
A lower interest rate regime will be very helpful for high-growth sectors like technology and cryptocurrency. Meanwhile, the largest thrust for the crypto space has come from institutional investors.
Speculation that the Securities and Exchange Commission is set to approve a Bitcoin exchange-traded fund has also raised investors’ optimism. The agency is expected to respond to the application filed by ARK Investments and 21Shares by Jan 10, while financial bigwig BlackRock Inc.’s (BLK) proposal is expected to be addressed by Mar 15.
Moreover, the next Bitcoin Halving will occur in the first half of 2024. When a halving occurs, the reward for mining new blocks is halved, making it more challenging for miners to earn net Bitcoins. Historically, this event has led to increased scarcity and has driven up the value of Bitcoin due to reduced supply.
Stocks to Watch
We have narrowed our search to five crypto-centric stocks with strong potential for 2024.
NVIDIA Corp. (NVDA - Free Report) is a semiconductor industry giant and one of the biggest success stories of 2023. As a leading designer 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 next year is 62% (ending January 2025). The Zacks Consensus Estimate for its next-year earnings has improved 1% over the past 30 days. NVDA currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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 30.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5.7% over the past 30 days. COIN currently carries a Zacks Rank #2.
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 53.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.5% over the past 60 days. SQ currently carries a Zacks Rank #3 (Hold).
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 5.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.7% over the past 90 days. IBKR 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 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 BTC and ETH futures contracts.
CME Group has an expected earnings growth rate of 3.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the past 30 days. CME currently carries a Zacks Rank #3.
The chart below shows the price performance of the abovementioned stocks in the past three months.
Image Source: Zacks Investment Research
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5 Crypto-Centric Stocks to Watch in 2024 After a Solid 2023
The cryptocurrency market witnessed an impressive turnaround in 2023 after a highly disappointing 2022. Bitcoin (BTC), the largest cryptocurrency worldwide, soared 157% last year. Other major cryptocurrencies such as Ethereum (ETH), Cardano (ADA), Dogecoin (DOGE) and BNB (BNB) also saw massive price hikes.
The space is likely to remain buoyant in 2024. U.S. stock markets have soared amid a clear indication from the Fed’s December FOMC meeting that the current interest rate hike cycle, which elevated the Fed fund rate to a 22-year high of 5.25-5.50% from 0-0.25% in March 2022, has finally ended. Moreover, the December FOMC meeting dot-plot showed that on average, Fed officials are expecting at least three rate cuts of 25 basis points each in 2024.
A lower interest rate regime will be very helpful for high-growth sectors like technology and cryptocurrency. Meanwhile, the largest thrust for the crypto space has come from institutional investors.
Speculation that the Securities and Exchange Commission is set to approve a Bitcoin exchange-traded fund has also raised investors’ optimism. The agency is expected to respond to the application filed by ARK Investments and 21Shares by Jan 10, while financial bigwig BlackRock Inc.’s (BLK) proposal is expected to be addressed by Mar 15.
Moreover, the next Bitcoin Halving will occur in the first half of 2024. When a halving occurs, the reward for mining new blocks is halved, making it more challenging for miners to earn net Bitcoins. Historically, this event has led to increased scarcity and has driven up the value of Bitcoin due to reduced supply.
Stocks to Watch
We have narrowed our search to five crypto-centric stocks with strong potential for 2024.
NVIDIA Corp. (NVDA - Free Report) is a semiconductor industry giant and one of the biggest success stories of 2023. As a leading designer 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 next year is 62% (ending January 2025). The Zacks Consensus Estimate for its next-year earnings has improved 1% over the past 30 days. NVDA currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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 30.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5.7% over the past 30 days. COIN currently carries a Zacks Rank #2.
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 53.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.5% over the past 60 days. SQ currently carries a Zacks Rank #3 (Hold).
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 5.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.7% over the past 90 days. IBKR 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 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 BTC and ETH futures contracts.
CME Group has an expected earnings growth rate of 3.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the past 30 days. CME currently carries a Zacks Rank #3.
The chart below shows the price performance of the abovementioned stocks in the past three months.
Image Source: Zacks Investment Research