Nvidia Pulls Out of Crypto Mining Due to Low Revenue
The rough patch being witnessed in the digital currency markets has recently hit the all-time low. The price of Bitcoin has fallen below a major psychological price-point of $8,000, further impacting the stock price of Nvidia (NASDAQ:NVDA). The popular producer of cryptocurrency mining chips, recently hit the stop button for its production of cryptocurrency mining focused graphic cards from its budget.
Nvidia stock (NASDAQ:NVDA) has seen a colossal peak from selling into the cryptocurrency mining boom. This was largely due to the high demand and stake for the GPU’s (Graphics Processing Unit) with a luxurious edge to them. The GPUs were basically adopted by crypto miners for mining of cryptocurrencies. Despite that, the company which just hit the peak of their stock price at a 52-week high on June 14 has fallen drastically, valuing only $244, majorly because of the bearish environment in the mining profits and services.
Nvidia expected the sales for the second quarter this year to be close to $100 million, in the genre of cryptocurrency mining products and services only. However, the actual figures that came out for the expected quarter, compiling a sales figure close to a mere $18 million, with major unsold stocks left with the company.
Bitmain Sees Opportunity Where Others Don’t
Bitmain, the Chinese giant of the same genre, mostly involved in the ASIC miners recently touched over $1billion in revenue collected in the period of the first quarter for the year 2018. Nvidia, falling short in the second quarter, is now focusing upon other sectors such as artificial intelligence, computer gaming and data processing. The company is reported to launch series chips for Geforce 20 with improvisations in chip architecture adding an edge of being better than existing cards (GTX 1080 Ti and GTX 1080) of the company.
On the other hand, Bitmain is planning towards filing the IPO for reaching out close to a high of $18 billion coming September. This IPO is going to be projected on the Hong Kong stock exchange. The company has already settled with pre-IPO with acquiring $1 billion in sales and financing at a round-off of $15 billion. Though insiders have speculated the company has increased sales due to increased services in AI sector and is similarly facing a decline in mining hardware used in cryptocurrency mining.
Cryptocurrency mining is a time and effort intensive activity. It remains profitable only as long as the mining reward exceeds the cost of mining. The cryptocurrency market was full-fledged and profitable in the year 2017 as today, however, as the price of Bitcoin continues falling from its nearly $20,000 peak valuation not long ago, the profitability of mining crypto has been dropping. Ethereum, the second most accepted digital currency grew 25 times as much from last year. Although 2018 has been quite unfavorable for mining market space.
Bitcoin witnessed a fall in valuation that was close to 70 percent. Since this market-wide drop, many investors have withdrawing their assets from ICOs. Experts predict the rough patch will likely recover in the Fall, only if the price of Bitcoin can manage climb back above a minimum valuation of $8000.