The cryptocurrency market has regained its lost glory this year. Last year was a disappointing one as the Fed pursued aggressive monetary control with a massive hike in the benchmark lending rate to combat 40-year high inflation. However, this space has witnessed rangebound trading in the past month.
A high interest rate is detrimental to growth assets like technology stocks, consumer discretionary stocks and cryptocurrencies. At present, the interest rate is in the range of 5.25-5.5%, its highest in more than 22 years. Market participants were worried following Fed Chairman Jerome Powell’s statement last month at the Jackson Hole Annual Policy Symposium that the central bank is open to more rate hikes depending on economic data.
However, on Sep 11, the Wall Street Journal reported that in a major shift from its rigorous interest rate hike policy, the Fed would restrain rom a rate hike at this month’s FOMC meeting. Moreover, the journal reported that Fed officials are considering all aspects about whether more rate hikes are al all needed this year.
The inflation rate has declined steadily since June 2022. Although currently it is well above the Fed’s 2% target level, majority of Fed officials are of the view that further tightening of monetary policies may be detrimental to the economy. Monetary policy variables always affect the economy at a lag period. Therefore, Fed officials believe that the central bank should wait for the full effect of the current level of interest rate to be visible.
As a result, prices of cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), Cardano (ADA) and Dogecoin (DOGE) and Litecoin (LTC) are likely to regain momentum in fourth-quarter 2023.
Stocks in Focus
NVIDIA Corp. NVDA reported second-quarter fiscal 2024 adjusted earnings of $2.70 per share, surpassing the Zacks Consensus Estimate of $2.09. NVDA posted revenues of $13.51 billion for the quarter, outpacing the Zacks Consensus Estimate by 20.89%. This compares to year-ago revenues of $6.7 billion. Management sees third-quarter revenues of $16 billion versus the Zacks Consensus Estimate of $12.34 billion.
NVIDIA has an expected earnings growth rate of more than 100% for the current year (ending January 2024). The Zacks Consensus Estimate for current-year earnings has improved 34.3% over the last 30 days. NVDA currently sports a Zacks Rank #1 (Strong Buy).
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.
Robinhood Markets has an expected earnings growth rate of 57.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 18% over the last 60 days. HOOD currently carries a Zacks Rank #2 (Buy).
Coinbase Global Inc. COIN 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 60 days. COIN currently carries a Zacks Rank #3 Hold).
Visa Inc. V 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 12.8% for the current year (ending September 2024). The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the last 60 days. V currently carries a Zacks Rank #3.
PayPal Holdings Inc. PYPL operates digital wallets and allows users to buy, transfer and sell cryptocurrencies, including Bitcoin, Ethereum, Bitcoin Cash and Litecoin. PYPL’s users can check out and pay using crypto to online merchants. Its mobile wallet Venmo also allows users to buy and sell cryptocurrency. PYPL has become the first major U.S. fintech company to offer its own crypto token with a dollar-pegged stablecoin known as PayPal USD.
PayPal Holdings has an expected earnings growth rate of 19.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 90 days. PYPL currently carries a Zacks Rank #3.
Visa Inc. (V): Free Stock Analysis Report
NVIDIA Corporation (NVDA): Free Stock Analysis Report
PayPal Holdings, Inc. (PYPL): Free Stock Analysis Report
Coinbase Global, Inc. (COIN): Free Stock Analysis Report
Robinhood Markets, Inc. (HOOD): Free Stock Analysis Report
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