Mt. Gox Repayments Plunge Bitcoin Below $60K; Market Eyes 2024 Rebound

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In recent months, the cryptocurrency market has experienced a significant downturn. Hopes that the market would bounce back following the anticipated halving event have not materialized, with Bitcoin, the most well-known cryptocurrency, trading below $60,000 after reaching a record high in March.

Several factors have contributed to this decline, including a major incident last week when over $170 billion was wiped from the market. This was triggered by an announcement from Mt. Gox, the former world’s largest cryptocurrency trading platform that filed for bankruptcy in February 2014. Mt. Gox revealed it has initiated repayments in Bitcoin and Bitcoin Cash to its creditors through designated crypto exchanges, with an expected total repayment around $9 billion. Nobuaki Kobayashi, who oversees the Mt. Gox bankruptcy estate, mentioned that remaining funds would be distributed to creditors once specific criteria are met. This news led to a sharp decline in Bitcoin’s price, dropping to $53,513, the lowest point since February 27.

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Despite this downturn, Bitcoin holds significant potential, and the recent price drop appears to be temporary. Bitcoin hit an all-time high of $73,750.07 on March 14, spurred by the Securities and Exchange Commission’s approval of 11 spot Bitcoin exchange-traded funds (ETFs) in January. However, the momentum halted in April due to uncertainty surrounding the Federal Reserve’s potential rate cuts, unsettling the broader market.

This temporary decline offers a strategic opportunity to invest in Bitcoin. Additionally, Federal Reserve Chairman Jerome Powell announced after the June FOMC meeting that only one interest rate cut is anticipated this year, a shift from the three cuts projected in March. This 25 basis point rate cut has been welcomed positively, particularly since the market had anticipated no rate cuts for 2024. The latest FOMC “dot plot” projects a total 1% decrease in interest rates by 2025, potentially lowering the Fed funds rate to 4.1% by the end of that year. Markets are now factoring in a potential rate cut in September, which could invigorate the cryptocurrency market, as lower interest rates generally benefit growth-oriented assets like technology stocks, consumer discretionary stocks, and cryptocurrencies.

To capitalize on the potential for 2024, we have pinpointed three promising crypto-oriented stocks, each holding either a Zacks Rank #1 (Strong Buy) or 2 (Buy). NVIDIA Corporation (NVDA) stands out as a global leader in visual computing technologies and the pioneer of the graphic processing unit (GPU). Over time, NVIDIA’s focus has shifted from PC graphics to artificial intelligence-based solutions, bolstering high-performance computing, gaming, and virtual reality platforms. NVIDIA is expected to see an earnings growth rate of 106.2% for the current year, with its earnings estimates improving by 12.1% over the past 60 days.

Another strong contender is Block Inc. (SQ), known for its online digital and mobile payment platforms for consumers and merchants. Block’s Cash App users can buy, sell, send, and receive Bitcoin. Additionally, Block’s decentralized tbd platform allows developers to build decentralized finance applications on programmable blockchains. Block is also a major Bitcoin investor, with an expected earnings growth rate of 72.8% for the current year and earnings estimates improving by 0.6% over the last 60 days.

Coinbase Global, Inc. (COIN) offers essential financial infrastructure and technology for the global cryptocurrency economy, providing a main financial account for crypto consumers, a marketplace with liquidity for institutional crypto asset transactions, and secure services for developers to build and accept cryptocurrency payments. Coinbase Global is projected to achieve an earnings growth rate exceeding 100% for this year, with its earnings estimates improving by over 100% in the past 90 days.

Lastly, Interactive Brokers Group, Inc. (IBKR) is a global automated electronic broker involved in executing, processing, and trading in cryptocurrencies. Additionally, its commodities futures trading desk allows customers to trade cryptocurrency futures. Interactive Brokers Group is expected to see an earnings growth rate of 17% for the current year, with earnings estimates improving by 4.4% over the last 60 days.