Top 3 Crypto Stocks to Invest in as Bitcoin Rebounds and Grows

The Bitcoin (BTC) rally, which paused after the halving event in April, is now making a strong comeback. Recently, Bitcoin has surged past the $66,500 resistance level and was trading around $67,000 on July 29, marking a 30-day high.

Earlier this year, Bitcoin reached an all-time high of $73,750 on March 14. However, the momentum slowed down significantly after the April halving event. This event, which reduces the reward for mining new blocks by half to limit the total supply of Bitcoins to 21 million, typically boosts demand and prices. This time, however, Bitcoin's price dropped below $59,000.

The recent recovery suggests Bitcoin is on track to exceed $70,000 again. Several factors are fueling this rebound, including political developments in the United States. President Joe Biden’s decision to withdraw from the 2024 presidential race has increased the chances of Donald Trump winning the upcoming election. Trump is known for his favorable stance towards the cryptocurrency industry and has received Bitcoin donations for his campaigns.

Additionally, the approval of 11 spot Bitcoin exchange-traded funds (ETFs) by the Securities and Exchange Commission in January has made it easier for individual and institutional investors to invest in Bitcoin through regulated platforms. These ETFs provide a simplified and regulated way to gain exposure to Bitcoin without the complexities of direct ownership and security concerns associated with digital wallets.

Moreover, the Federal Reserve's plan to cut interest rates after raising them to combat high inflation is expected to benefit Bitcoin. Lower interest rates generally support growth-focused assets like technology stocks, consumer discretionary, and cryptocurrencies. This policy shift could attract more investors to the cryptocurrency market, seeking higher returns in a low-interest-rate environment.

Our Top Picks

We have identified three crypto-oriented stocks with strong potential for 2024. Each of these stocks has either a Zacks Rank #1 (Strong Buy) or 2 (Buy). Here’s why these companies stand out:

1. NVIDIA Corporation (NVDA)

NVIDIA is a global leader in visual computing technologies and the inventor of the GPU. The company has expanded its focus from PC graphics to AI-based solutions, supporting high-performance computing, gaming, and virtual reality platforms. NVIDIA's GPUs are essential for cryptocurrency mining, which requires high computational power. As Bitcoin and other cryptocurrencies gain traction, the demand for NVIDIA’s advanced GPUs is expected to rise.

NVIDIA has an expected earnings growth rate of 106.9% for the current year, and its current-year earnings estimate has improved by 1.5% over the past 60 days. NVDA holds a Zacks Rank #2. With its strong position in the AI and crypto mining markets, NVIDIA is well-placed to benefit from the ongoing crypto boom.

2. Block Inc. (SQ)

Block, the parent company of Square and Cash App, offers an online digital and mobile payment platform for consumers and merchants. Cash App users can buy, sell, send, and receive Bitcoin. Block's decentralized tbd platform allows developers to build decentralized finance applications on programmable blockchains. Block’s investment in Bitcoin and blockchain technology demonstrates its commitment to the cryptocurrency space.

Block is also one of the largest Bitcoin investors, holding significant amounts of the cryptocurrency in its treasury. The company has an expected earnings growth rate of 72.8% for the current year, with a 0.6% improvement in current-year earnings estimates over the past 60 days. SQ carries a Zacks Rank #2. Block’s integrated approach to digital payments and cryptocurrencies positions it for substantial growth as the crypto market expands.

3. Interactive Brokers Group, Inc. (IBKR)

Interactive Brokers is a global automated electronic broker that facilitates cryptocurrency transactions. Its commodities futures trading desk offers customers the ability to trade cryptocurrency futures. Interactive Brokers has also integrated cryptocurrency trading into its platform, allowing clients to trade Bitcoin, Ethereum, and other major cryptocurrencies directly.

The company has an expected earnings growth rate of 17.6% for the current year, with a 4.2% improvement in current-year earnings estimates over the past 60 days. IBKR sports a Zacks Rank #1. Interactive Brokers’ comprehensive trading platform and cryptocurrency offerings make it a key player in the digital asset space.

Market Outlook and Conclusion

The cryptocurrency market, led by Bitcoin, continues to evolve and present new investment opportunities. As regulatory frameworks improve and institutional adoption increases, cryptocurrencies are becoming more integrated into the global financial system. This integration is supported by advancements in technology, increased investor interest, and favorable market conditions.

Investing in crypto-oriented stocks like NVIDIA, Block, and Interactive Brokers offers a way to gain exposure to the growing cryptocurrency market while leveraging the strengths of established companies. These stocks are well-positioned to benefit from the ongoing Bitcoin rally and the broader acceptance of digital assets.

As the market continues to develop, these companies are expected to play a significant role in shaping the future of finance and technology. By staying informed and strategically investing in these key players, investors can capitalize on the potential growth and innovation within the cryptocurrency sector.

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