4 Crypto Stocks That Could Thrive Despite Fed Rate Hikes 

4 Crypto Stocks That Could Thrive Despite Fed Rate Hikes 

In its September meeting, the Federal Reserve decided to maintain its policy interest rate unchanged, as was widely anticipated. However, despite this decision, all three major stock market indexes experienced declines. The market reacted negatively as the Fed hinted at the possibility of another interest rate hike later in the year, fueled by concerns that inflationary pressures might persist.

The cryptocurrency market also took a hit following the Fed’s announcement. Cryptocurrencies had enjoyed a strong rebound earlier in the year, with Bitcoin (BTC) surpassing $31,500 at the beginning of July. However, the landscape has since changed significantly, and as of September 21, Bitcoin was hovering around the $26,600 mark.

The Federal Reserve’s aggressive stance on interest rate hikes has been impacting various markets for over two and a half years. This has had an impact on major cryptocurrencies like Bitcoin, Ethereum (ETH), Cardano (ADA), Dogecoin (DOGE), and Litecoin (LTC).

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Despite these challenges, cryptocurrencies experienced a rally in the first half of 2022, driven by several positive developments within the space.

One pivotal event in 2023 was a significant 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 rejected the company’s application to transform the Grayscale Bitcoin Trust into an Exchange-Traded Fund (ETF). This ruling marked a major victory for Grayscale and established a precedent that could have far-reaching implications for other companies seeking to launch Bitcoin ETFs, including major players in the industry.

Furthermore, the growing interest in cryptocurrencies within the financial sector is expected to drive the prices of Bitcoin and other digital currencies in the coming months. Notably, financial giants like BlackRock, Inc. are advocating for regulatory approval of a spot Bitcoin ETF, a move that could significantly increase retail investor participation.

Similarly, The Charles Schwab Corporation is supporting a new exchange called EDX Markets, underscoring the increasing institutional interest in the crypto space. These developments collectively signal a growing acceptance of cryptocurrencies within traditional finance and may contribute to a favorable trajectory for the overall cryptocurrency market.

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The recent decision by the Federal Reserve to keep interest rates unchanged did not immediately boost investor sentiment due to the central bank’s indication of another potential rate hike later in the year. However, the Fed’s plan to conclude its monetary tightening campaign in November and begin rate cuts in 2024 could be favorable for cryptocurrencies.

Historically, the price of Bitcoin has shown a significant correlation with the performance of the tech-heavy Nasdaq 100 stock index. This correlation exists because both tech stocks and cryptocurrencies are considered relatively risky assets, leading investors to respond similarly when evaluating their investment strategies based on prevailing market conditions.

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Therefore, a pause in rate hikes could bode well for the cryptocurrency market in the near term.

Here are some stocks related to the cryptocurrency and technology sectors that may be of interest:

  1. Robinhood Markets, Inc. (HOOD): Robinhood operates a financial services platform that allows users to invest in stocks, exchange-traded funds, options, gold, and cryptocurrencies. The company’s expected earnings growth rate for the current year is 57.3%, and 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).
  2. Coinbase Global, Inc. (COIN): Coinbase offers financial infrastructure and technology to support the global cryptocurrency economy. The company’s expected earnings growth rate for the current year is 84.8%, and the Zacks Consensus Estimate for current-year earnings has improved 21.7% over the last 60 days. Coinbase currently has a Zacks Rank #3.
  3. NVIDIA Corporation (NVDA): NVIDIA is a major player in the semiconductor industry and has been performing exceptionally well in 2023. The company is a leading designer of graphic processing units (GPUs), which play a crucial role in data centers, artificial intelligence, and cryptocurrency mining. NVIDIA’s expected earnings growth rate for the current year is 219.5%, and the Zacks Consensus Estimate for current-year earnings has improved 36.8% over the last 60 days. NVIDIA currently holds a Zacks Rank #1 (Strong Buy).
  4. Accenture Plc (ACN) :It is a global system integrator known for providing consulting, technology, and a range of services to businesses worldwide. The company is actively promoting Ethereum-based blockchain solutions to enterprises, with a specific focus on simplifying payment processing.As of the latest available data, Accenture’s expected earnings growth rate for the current year is 8.2%. It’s worth noting that the Zacks Consensus Estimate for current-year earnings has experienced a modest 0.1% improvement over the last 60 days. Currently, Accenture holds a Zacks Rank #3.

These stocks may be influenced by developments in the cryptocurrency market and the broader technology sector.

About Author

John Smith

John Smith is a distinguished journalist, holding a Master's in Journalism from the renowned Columbia University. With a knack for uncovering the most captivating stories, John is the go-to expert for all things related to politics and current affairs. His insightful analysis and commitment to unbiased reporting set him apart in the world of journalism. John's writing ensures you're always in the know about the latest happenings in the USA.

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