3 Crypto Stocks to Gain From as Bitcoin Rally Continues
Cryptocurrencies, including Bitcoin, are putting up a good show this year. The picture, however, was dull in the second half of 2022, when the market took a beating, with experts suggesting the end of the crypto rally in 2023.
Bitcoin alone saw its market value tank by more than 65% last year. The slump in crypto was because of a series of unfortunate events — mainly the Terra Luna crash and a major fraud leading to the bankruptcy of FTX.
However, favorable economic conditions such as easing inflation, a weakening dollar and the Fed’s decision to halt its interest rate hikes have raised optimism, driving Bitcoin higher.
Given this scenario, economists believe that the Bitcoin rally will continue for the remainder of 2023. This is likely to help stocks such as Hut 8 Mining Corp. HUT, Bitfarms Ltd. BITF andHIVE Blockchain Technologies Ltd. (HIVE - USD).
Bitcoin Bounces Back
Over the past week, Bitcoin has seen a rapid surge, topping $31,000 on Jul 3. This came after a three-month low of $26,000 when the U.S. Securities and Exchange Commission filed a lawsuit against Binance, one of the prominent cryptocurrency exchanges.
In fact, 2023 is one of the best years for Bitcoin, with the cryptocurrency surging as much as 85.6% on a year-to-date basis.
It's worth noting that despite the decline suffered last year, Bitcoin's price is still maintaining a position above the 200-day simple moving average. This suggests a potential indication of a further upward movement or a positive trend in the future.
What Is Aiding the Rally?
Latest economic data that suggests cooling inflation prompted the Fed to pause its interest rate hikes in June after increasing it by 500 basis points since March 2022. Higher interest rates throughout last year weighed heavy on high-risk assets like tech stocks and digital coins. The pause in interest rates has thus raised optimism once again.
Moreover, the banking sector crisis, which shook the markets earlier this year with the failure of multiple regional banks, ignited recession fears. This saw many investors opting for digital assets as a safe bet rather than the regional banks.
Also, renewed interest among major financial institutions is driving the Bitcoin rally. The Charles Schwab Corporation SCHW, Citadel Securities and Fidelity Digital Assets have been backing a newly formed cryptocurrency exchange EDX Markets. This exchange facilitates the trading of Bitcoin, along with other prominent digital assets.
Our Choices
From an investment standpoint, it will be a wise decision to make gains from Bitcoin's current upward trend. One way to do this is by focusing on companies that use Bitcoin and the technologies associated with it, such as blockchain. By keeping an eye on these companies, investors can potentially benefit from the growth and adoption of Bitcoin and its underlying technologies without directly investing in the cryptocurrency itself.
Hut 8 Mining Corp. is a cryptocurrency mining company based in North America. HUT offers computing power to mining pools and receives digital assets in return. The company caters to commercial clients in diverse sectors such as finance, healthcare and government, as well as those involved in digital assets, blockchain, gaming, virtual effects and Web 3.0.
Hut 8 Mining’s expected earnings growth rate for the current year is 50%. Shares of HUT have gained 77.7% in the past 30 days. HUT presently carries a Zacks Rank #2 (Buy).
Bitfarms Ltd. is a Bitcoin mining company. BITF provides vertically integrated mining operations with onsite technical repair, proprietary data analytics and company-owned electrical engineering and installation services to deliver operational performance and uptime.
Bitfarms’ expected earnings growth rate for the current year is 86.1%. Shares of BITF have gained 47.3% in the past 30 days. BITF presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
HIVE Blockchain Technologies Ltd. operates as a cryptocurrency mining firm. The company validates transactions on blockchain networks, as well as provides crypto mining and builds bridges between crypto and traditional capital markets.
HIVE Blockchain’s expected earnings growth rate for the current year is 54.2%. Shares of HIVE have gained 66.8% in the past 30 days. HIVE presently carries a Zacks Rank #2.
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The Charles Schwab Corporation (SCHW) : Free Stock Analysis Report
Hut 8 Mining Corp. (HUT) : Free Stock Analysis Report
Bitfarms Ltd. (BITF) : Free Stock Analysis Report
