The Federal Reserve left its policy interest rate unchanged, as widely expected, in its September meeting. However, all three major indexes declined as the Fed hinted at another rate hike this year as concerns grew that inflationary pressures will prove to be stubborn.
The cryptocurrency market also suffered following the announcement. Cryptocurrencies have been suffering lately after staging a solid rebound this year that saw Bitcoin (BTC) trading past $31,500 at the beginning of July.
However, things have changed drastically since then, and Bitcoin hovered around the $26,600 mark on Sep 21.
The Fed’s aggressive interest rate hikes have been affecting markets for more than two-and-a-half years now. This took its toll on all major cryptocurrencies like Bitcoin, Ethereum (ETH), Cardano (ADA), Dogecoin (DOGE) and Litecoin (LTC).
Despite the pressure, cryptocurrencies rallied in the first half of 2022 due to a number of positive developments in the space.
In 2023, a pivotal event in the Bitcoin ecosystem was a major legal victory in the U.S. Court of Appeals for the D.C. Circuit, involving Grayscale and the U.S. Securities and Exchange Commission (SEC).
The court ruled in favor of Grayscale in its lawsuit against the SEC, which had previously denied the company’s application to transform the Grayscale Bitcoin Trust into an Exchange-Traded Fund (ETF).
This ruling stands as a major victory for Grayscale and sets a precedent that could have far-reaching implications for other companies aspiring to launch Bitcoin ETFs, including prominent industry players.
Moreover, the growing interest in cryptocurrencies within the financial sector is expected to propel the prices of Bitcoin and other digital currencies in the coming months. Notably, financial giants like BlackRock, Inc. BLK are advocating regulatory approval for a spot Bitcoin ETF, a move that has the potential to increase retail investor participation significantly.
Similarly, The Charles Schwab Corporation SCHW is backing a new exchange named EDX Markets, underlining the expanding institutional interest in the crypto space. These collective developments signal a growing acceptance of cryptocurrencies within traditional finance and could contribute to a favorable trajectory for the overall cryptocurrency market.Top of Form
The Fed’s recent decision to keep interest rates unchanged, however, didn’t lift investors’ sentiments because the central bank hinted at another rate hike this year.
Then again, the Fed also said that it would end its monetary tightening campaign in November and start cutting rates in 2024. This definitely bodes well for cryptocurrencies.
Historically, the price of Bitcoin has exhibited a notable correlation with the performance of the tech-heavy Nasdaq 100 stock index. This correlation exists because both tech stocks and cryptocurrencies are considered to be relatively risky assets, leading investors to respond in a similar manner when evaluating their investment strategies based on prevailing market conditions.
Thus, a pause in rate hikes bodes well for the cryptocurrency market in the near term.
Stocks in Focus
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 expected earnings growth rate for the current year is 57.3%.The Zacks Consensus Estimate for current-year earnings has improved 16.7% over the last 60 days. Robinhood Markets currently has a Zacks Rank #2 (Buy).
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.
Coinbase Global’s expected earnings growth rate for the current year is 84.8%. The Zacks Consensus Estimate for current-year earnings has improved 21.7% over the last 60 days. Coinbase currently has a Zacks Rank #3.
NVIDIA Corporation NVDA is a major player in the semiconductor industry and has been one of the standout success stories of 2023. As a leading designer of graphic processing units (GPUs), the value of the NVDA stock tends to surge in a thriving crypto market. This is primarily due to the crucial role that GPUs play in data centers, artificial intelligence and the mining or production of cryptocurrencies.
NVIDIA’s expected earnings growth rate for the current year is 219.5%. The Zacks Consensus Estimate for current-year earnings has improved 36.8% over the last 60 days. NVIDIA currently sports a Zacks Rank #1.
Accenture plc ACN is a worldwide system integrator that offers consulting, technology and various services. The company promotes Ethereum-based blockchain solutions to businesses, aiming to simplify payment processing.
Accenture’s expected earnings growth rate for the current year is 8.2%. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 60 days. ACN currently carries a Zacks Rank #3.
Accenture PLC (ACN): Free Stock Analysis Report
BlackRock, Inc. (BLK): Free Stock Analysis Report
The Charles Schwab Corporation (SCHW): Free Stock Analysis Report
NVIDIA Corporation (NVDA): Free Stock Analysis Report
Coinbase Global, Inc. (COIN): Free Stock Analysis Report
Robinhood Markets, Inc. (HOOD): Free Stock Analysis Report
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