The Bitcoin Rollercoaster: Price Swings in 2024
After a strong rally in the previous year, the cryptocurrency market saw a positive start in 2024. The highly anticipated reform in the cryptocurrency space transpired on Jan 10, as the U.S. Securities and Exchange Commission (SEC) gave the nod to rule changes permitting the establishment of spotbitcoin exchangetraded funds (ETFs).
The approval of 11 spot bitcoin ETFs set a bullish tone in the market, causing the price of bitcoin (BTC) to surge above the $47,000 mark to reach $47,893.70. However, Bitcoin’s upshot was followed by a sharp downturn. By Jan 22, Bitcoin plummeted by nearly 3% to hit its lowest level of $39,854.61 since December 2023. Nonetheless, the cryptocurrency managed to recoup some of its losses in the subsequent seven trading days, with a 0.6% price uptick.
The Driving Forces
Bitcoin’s favorable prospects were buoyed by the SEC’s decision, heralding a new era for the crypto space as it becomes an integral component of mainstream finance. The ground-breaking move allows individuals, money managers, and other financial institutions to gain exposure to the world’s largest cryptocurrency without direct ownership.
Furthermore, the upcoming Bitcoin halving in the first half of 2024 signifies an event where the reward for mining new blocks is halved, leading to increased scarcity and potentially driving up the value of Bitcoin due to reduced supply.
Key Stocks to Watch
NVIDIA Corp. NVDA, a market powerhouse in the semiconductor industry, is expected to benefit from its pivotal role in the crypto market. With a significant presence in graphic processing units (GPUs), NVDA’s stock typically thrives in a thriving crypto market. The company has an expected earnings growth rate of 63.1% for the current year (ending January 2025) and carries a Zacks Rank #2 (Buy).
CME Group Inc. offers options for Bitcoin and ether, adding depth to the crypto futures market. With an expected earnings growth rate of 2.3% for the current year, CME is placed at Zacks Rank #2.
Coinbase Global Inc. COIN, known for providing financial infrastructure and technology for the crypto economy, has an expected earnings growth rate of 49.1% for the current year and is currently ranked at #3 (Hold) by Zacks.
Robinhood Markets Inc. HOOD, with its diversified financial services platform, expects an earnings growth rate of over 100% for the current year and carries a Zacks Rank #3.
Block Inc. SQ, an online digital and mobile payment platform, forecasts an earnings growth rate of 53.1% for the current year and currently holds a Zacks Rank #3.
Stock Performance
The chart below illustrates the price performance of these five promising stocks over the past three months:
Image Source: Zacks Investment Research