The Cryptocurrency Rally: What’s Next?

The cryptocurrency rally that started in early 2023 came to a halt in April, with Bitcoin (BTC) suffering the most. On June 19, Bitcoin was trading at $64,860.25, sharply lower than its all-time high of $73,750.07 attained on March 14. Despite this, Bitcoin has gained 53.8% year to date and 157% in 2023.

The Bitcoin rally gained pace in early January after the U.S. Securities and Exchange Commission (SEC) approved 11 spot Bitcoin exchange-traded funds (ETFs). This development not only enhances liquidity but also contributes to price stability.

Bitcoin ETFs: A Game-Changer for Cryptocurrency

The approval of these ETFs is being seen as a game-changer as they will provide both retail and institutional investors with a regulated and accessible way to invest in the cryptocurrency. This development not only enhances liquidity but also contributes to price stability.

However, the Bitcoin rally came to a halt with the halving event in April. The halving event, which occurs every four years, reduces the block reward by 50%, aiming to cap the total supply of Bitcoin at 21 million coins. This reduction in the rate of new Bitcoin supply typically increases demand for cryptocurrencies, often resulting in a price surge.

The Bitcoin Halving Event: What’s Next?

Despite the recent downturn, there is widespread speculation that the reduction in supply will lead to a scarcity-driven price increase for the digital asset in the near term. Additionally, Federal Reserve Chairman Jerome Powell’s statement on June 12, anticipating only one rate cut this year, bodes well for the cryptocurrency market and the broader economy.

Low interest rates benefit growth assets such as technology stocks, consumer discretionary stocks, and cryptocurrencies. At this stage, investors should adopt a long-term perspective. The Fed is clearly nearing the end of its higher rate regime. We might see a rate cut by the end of this year if macroeconomic data remains favorable.

Our Top Picks

We have narrowed our search to four 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).

Interactive Brokers Group, Inc.

Interactive Brokers Group, Inc. (IBKR) 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.

Coinbase Global, Inc.

Coinbase Global, Inc. (COIN) offers financial infrastructure and technology to support the global cryptocurrency economy. COIN provides a main financial account for consumers in the crypto space, a marketplace with liquidity for institutional crypto asset transactions, and technology and services for developers to build crypto-based applications and accept cryptocurrencies securely as payment.

NVIDIA Corporation

NVIDIA Corporation (NVDA) 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.

Robinhood Markets, Inc.

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 its Robinhood Crypto platform.

Hut 8 Mining Corp.

Hut 8 Mining Corp. (HUT) is a cryptocurrency mining company based in North America. HUT offers computing power to mining pools and receives digital assets in return. The company caters to commercial clients in diverse sectors such as finance, healthcare, government, as well as those involved in digital assets, blockchain, gaming, virtual effects, and Web 3.0.

Cryptocurrency Mining: The Future of Digital Assets

In conclusion, the cryptocurrency market is poised for a rebound, driven by the reduction in supply and the anticipation of a rate cut by the end of this year. Our top picks, including Interactive Brokers Group, Inc., Coinbase Global, Inc., NVIDIA Corporation, Robinhood Markets, Inc., and Hut 8 Mining Corp., are well-positioned to benefit from the growing demand for cryptocurrencies.