Author: Morningology

Cryptocurrencies have roared back to life after more than two years of implosion and uncertainties. The flagship cryptocurrency Bitcoin rallying to above the $50,000 a coin level is a testament that fear has dissipated and that investors are increasingly taking risks in the industry. Consumer activities in Coinbase, one of the world’s largest cryptocurrency exchanges, were depicted by a 60% increase in revenues in the fourth quarter from a year ago and 80% compared to the third quarter.

Crypto Roars Back

RobinHood, which has been the epicenter of cryptocurrency transactions in recent years, has seen its trading volumes explode by more than 200% from a year ago. The increased volumes come as small investors continue to rush into the sector in pursuit of bargains after years of sell-offs and deep pullbacks.

Soaring trading volumes and revenues in the biggest exchanges is an indication that mom-and-pop traders who lost billions of dollars at the height of the 2022 collapse are ready to move on. The regulatory framework becoming increasingly clear with the launch of a US exchange-traded fund that allows for direct investing in Bitcoin continues to bolster sentiments about the overall sector.

The price of Bitcoin has more than doubled over the past 12 months on growing expectations that regulators in the US are ready to go slow on stringent regulations. The approval of a Bitcoin exchange-traded fund is another factor that is bolstering sentiments in the sector, as the instrument is expected to attract more institutional investors into the nascent industry.

In addition, investors are optimistic about another market rally ahead of the much-awaited Bitcoin halving event. The software upgrade event, which results in the reduction by half the amount of reward that miners get, is often followed by a significant price increase. In the past, the event was followed by increased retail engagement.

Wave of Uncertainty

Retail traders account for the biggest share of activities in the industry, awaiting an influx of institutional investors. They continue to account for the lion’s share of trading volumes and revenues in Coinbase and other exchanges. Growing expectations that the US Federal Reserve will start cutting interest later in the year is also forcing investors to tweak their investment portfolios.

Nevertheless, a cloud of caution remains in the air with retail investors not jumping with both feet into investing in the sector. Web searches for the word Bitcoin commonly used to track sentiments spiked in the first half of January.

However it has collapsed back to bear market levels affirming investors are still being convinced about the long term outlook. There is always fear that the sector could come under pressure, especially on the dollar strengthening across the board on the Fed sticking with higher interest rates for long.

Additionally, downloads of top crypto exchange apps commonly used by retail traders are not yet back to levels registered at the height of the crypto bull run. Binance, which is one of the largest crypto exchanges, registered 10 million app downloads in the fourth quarter; a 1 million increase from the third quarter downloads.

It’s tax time.

As one of life’s two certainties, tax season can be the most, well… taxing.

These days, far too many of us are unwilling to do our own taxes, so we leave it up to trusted tax professionals. That way we don’t make mistakes with filing status, dependents, capital gains, or making dangerous assumptions. Many of us also forget human error can be costly. Even the smallest error can lead to expensive tax bills and a possible visit from the “friendly” IRS. 

H&R Block (HRB)

HRB is a non-brainer with tax season.

Every year around this time, HRB rockets higher. We saw it happen just about every year. Not only can you make money from its potential appreciation this time of year, but you can also collect its yield of 2.67%.  Helping, analysts at Barrington recently raised its price target to $55 from $48 a share, with an outperform rating. 

According to TheFly.com, the firm cites the company’s current valuation, “secure” dividend yielding 2.7% and “aggressive” share repurchase program for the Outperform rating.

Intuit (INTU)

There’s also Intuit (INTU), whose TurboTax is popular with taxpayers.

At $656 a share, it’s another one that typically runs around this time of the year. While it’s just a bit overbought at current prices, it’s still being bid higher on tax season. 

Better, earnings have been solid. In its most recent quarter, the company posted Q1 2024 adjusted earnings per share of $2.47, beating estimates by a solid 49 cents. Revenue climbed 15% Y/Y to $3B, also beating expectations by $120M. Moreover, INTU’s FQ1 adjusted operating income soared 45% Y/Y to $960M, as noted by Seeking Alpha.

Oppenheimer just raised its price target on INTU to $678 from $610 a share. KeyBanc analyst Josh Beck raised the firm’s price target on Intuit to $700 from $670 and keeps an Overweight rating. And Citi raised its price target to $700 from $651, with a buy rating.