The cryptocurrency rally that sent the prices of Bitcoin (BTC), Ethereum (ETH), Dogecoin (DOGE), and Cardano (ADA) soaring in the first half of the year has quickly come to a halt over the past month.
In the past few weeks, the markets have been very unstable because of new worries about the health of the country’s banks and economy. This is because the credit rating agency Moody’s downgraded several lenders and left six banks under review for possible downgrades.
When interest rates go up, investments that are meant to grow, like consumer discretionary stocks, technology stocks, and cryptocurrencies, lose value.
The Rise of Cryptocurrencies Will Continue
In July, the Fed went back to raising interest rates, which caused coin prices to fall from their highs at the beginning of the month. The Fed also left the door open for more interest rate hikes based on how the economy was doing.
As if this wasn’t enough, Fitch Ratings dropped the U.S. long-term foreign-currency borrower default rating from AAA to AA+ earlier this month. The group said that “expected financial deterioration over the next three years” was the reason. This made buyers feel bad once more.
But since its highest point of 9.1% in June 2022, inflation has dropped sharply over the past 12 months. This has made people think that the central bank might soon stop tightening money.
Recently, the prices of cryptocurrencies have been going down, but the second half of the year looks good. This is especially true since the cryptocurrency market came back strong in 2023 after a bad year in 2022.
In fact, buyers are thinking about a lot of things. Last week, cryptocurrencies went up again because Moody’s downgraded a few small and medium-sized banks. The cryptocurrency market could be volatile in the short term, which makes sense, but experts think it will get better once the economy as a whole gets better.
At the moment, investors should use a “buy-on-the-dip” approach to build up their holdings of cryptocurrencies. Each drop in price on the cryptocurrency market could be a good time to buy, with the chance of big profits once the market’s interest rate stabilizes.
Stocks to Watch
Shopify Inc. SHOP Shopify is an e-commerce company that helps businesses accept coins as a form of payment. SHOP has also set up a connection with CoinPayments, which is a payment processor for cryptocurrencies.
Shopify is expecting to make more money this year than it did last year. In the last 60 days, the Zacks Consensus Estimate for its current year results has gone up by 6.5%. The Zacks Rank for SHOP right now is #3 (Hold).
NVIDIA Corporation NVDA is a major player in the semiconductor business and one of the most successful companies of 2023.
As a top maker of graphics processing units (GPUs), NVDA stock tends to go up in value when the crypto market is doing well. This is mostly because GPUs are so important for data centers, artificial intelligence, and mining or making coins.
The rate at which NVIDIA is projected to make more money this year is 133.2%. In the last 60 days, the Zacks Consensus Estimate for its current year results has gone up by 1.7%. NVDA has a Zacks Rank #1 (Strong Buy) at the moment.
HIVE Digital Technologies Ltd. HIVE is a company that mines Bitcoin. The company verifies transactions on blockchain networks, offers crypto mining, and builds bridges between crypto and standard capital markets.
The rate at which HIVE Blockchain is predicted to make more money this year is 78.1%. In the last three months, shares of HIVE have gone up by 39.6%. The Zacks Rank for HIVE right now is #3.
Coinbase Global, Inc. COIN provides the financial framework and technology that the global cryptocurrency economy needs. COIN gives people in the crypto space a main bank account, a market with liquidity for institutions to buy and sell crypto assets, and the technology and services they need to build crypto-based apps and safely accept cryptocurrencies as payment.
The rate at which Coinbase Global is predicted to make more money this year is 84.8%. In the last three months, shares of COIN have gone up by 36.5%. The Zacks Rank for Coinbase right now is #3.
- Hot vs. Cold Crypto Wallets: Which One Should You Choose?
- Best Crypto Wallets of August 2023: A Comprehensive Guide