The cryptocurrency market has struggled to maintain its earlier momentum as President Donald Trump’s tariffs continue to weigh on the broader market, with all three major indexes retreating sharply from their earlier highs.
Among the cryptocurrencies, Bitcoin (BTC) has particularly taken the biggest hit, with its price plunging sharply from its all-time high. Bitcoin was hovering around $77,750 on Tuesday night after falling as low as $74,000 a day earlier. Understandably, the recent decline is a result of Trump’s tariff policies and regulatory ambiguity.
However, Bitcoin still has a lot of potential and the rally is expected to resume once the ongoing trade tensions ease and the Federal Reserve starts its interest rate cuts.
It would be ideal to adopt the buy-the-dip approach and add bitcoin-centric stocks like NVIDIA Corporation NVDA, Robinhood Markets, Inc. HOOD, Interactive Brokers Group, Inc. IBKR and to your portfolio. Each of these stocks has strong growth potential for 2025 and has seen positive earnings estimate revisions in the last 60 days.
The overall cryptocurrency market capitalization has lost more than 32% since Trump’s return to the White House in January. Year to date, Bitcoin has declined 17.2% and 24% since Trump’s second term in office. The cryptocurrency hit an all-time high of $106,533 on Dec. 22.
This came despite the Trump administration’s move with its plan to create a Strategic Bitcoin Reserve, aiming to integrate the cryptocurrency into the country’s broader economic strategy.
The recent decline comes amid fears of the economy slipping into a recession owing to Trump’s sweeping tariffs announced last week. Trump imposed a baseline 10% tariff on all trading partners of the United States. He also said that additional tariffs will be imposed on the biggest offenders.
On Tuesday, Trump imposed an additional 50% tariff on all Chinese imports in retaliation to China’s 34% tariff announcement on U.S. imports. Trump initially indicated that the tariffs may be more targeted and adjustable, suggesting that certain countries could be exempt.
However, the tariffs came as a shock to investors, with $6.2 trillion wiped out of markets in just two sessions following the announcement and the S&P 500 entering bear territory, while the Dow lost more than 1,600 points on Friday to record its worst day since the onset of the pandemic.
Bitcoin had a stellar 2024, with the final quarter proving to be one of the best in recent times as inflation continued to decline, prompting the Federal Reserve to cut interest rates by 100 basis points in total between September and December.
However, the Fed has since paused further rate cuts as inflation started to show signs of rising this year. The central bank has taken a more cautious approach and is unlikely to go for its next rate cut until the second half of the year.
Despite this, Federal Reserve Chair Jerome Powell said during the March FOMC meeting that the Fed still anticipates two rate cuts in 2025. Elevated interest rates for an extended period can have a negative impact on cryptocurrencies by dampening investor interest in high-risk assets, increasing the cost of holding non-interest-bearing assets like Bitcoin, and strengthening the U.S. dollar, often a headwind for the crypto market.
However, the digital asset is expected to resume its upward momentum once these pressures begin to subside. Historically, Bitcoin has reached new all-time highs roughly every four years, continuing a bullish pattern that began in 2017. In previous cycles, it has rallied as much as 2,300% and 1,700%, followed by corrections of up to 70-80%. After hitting a low of around $16,000 in early 2023, Bitcoin has already surged over 550%, suggesting strong potential for continued growth ahead.
NVIDIA Corporation 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 47.5%. The Zacks Consensus Estimate for current-year earnings has improved 4.8% over the last 60 days. Currently, NVIDIA has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Robinhood Markets, Inc. 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 23.9%.The Zacks Consensus Estimate for current-year earnings has improved 16.4% over the last 60 days. Robinhood Markets currently has a Zacks Rank #2.
Interactive Brokers Group, Inc. is a global automated electronic broker. IBKR executes, processes and trades in cryptocurrencies. IBKR’s commodities futures trading desk also offers customers a chance to trade cryptocurrency futures.
Interactive Brokers Group has an expected earnings growth rate of 1.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.3% over the last 60 days. IBKR currently has a Zacks Rank #2.
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This article originally published on Zacks Investment Research (zacks.com).
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