Nvidia Crypto Mining GPU Chip Producer Stocks Underperform, Was Bitcoin’s Bear Market to Blame?
The cryptocurrency market has been in a bear trend since the end of 2017. Bitcoin (BTC) lost more than 80% of its price during 2018 and many other digital assets lost more than 90% of their value during the same period of time.
Not only virtual currencies have been affected by this bear market, indeed several other projects have been affected by it. For example, Nvidia, one of the largest chip makers, was also hit by the bear market.
The company’s stock lost around half of its value in the last four months. Although Bitcoin is not the only reason behind this performance, it has played an important role affecting the company. During an interview with CNBC, Chantico Gglobal’s Gina Sanchez commented:
“I think this [Nvidia] is up in line with the S&P but no more. I really don’t see this as an interesting buy at all here because you still have significant slowing in the cloud market.”
She went on saying that this is something that other chip makers are currently experiencing. Nvidia has also reduced its revenue for 2019 from $2.7 billion down to $2.2 billion. According to the company, the reduction in these numbers is related to the price drop of Bitcoin and other virtual currencies during the last months.
Bitcoin and other digital assets use ASIC and GPU miners for processing and confirming transactions. Due to the bear market, mining activities became less profitable. In November 2018, Bitcoin’s hash rate dropped down almost 50%, pushing several crypto miners out of the market. In general, smaller and inefficient miners left the market after this price drop.
Nvidia and other chip makers have been affected by this issue, thus reducing their growth expectations for the future.
Now, the mining market is starting to recover after a difficulty drop as well. New miners are also entering the market and those that turned off their farms are now investing once again.