The stock price of chipmaker Nvidia and the value of Bitcoin continue to skyrocket almost in sync. These two technology disruptors, in their respective fields, are propelling amazing technological and economic changes. Their significance is being clearly reflected in the financial markets, as the values of both NVDA and BTC reach all-time highs.
Bitcoin and Nvidia’s Impressive Price Trajectories
Nvidia products and Bitcoin seem to be interrelated. Both are key elements that are powering the world’s transition to the 4th Industrial Revolution
“Technology is changing the nature of relationships between industries and creating a new range of challenges. For example, technology is now interconnected with retail, healthcare, and banking,” according to a PWC report.
In this connection, then, is there some degree of correlation between the price trajectories of Nvidia stock and Bitcoin?
Nvidia stock is hovering at its highest-ever stock value. As of writing, a share of Nvidia is over US$170, up from less than US$20 in 2014. As shown in the chart below, Nvidia’s stock price climbed significantly when Bitcoin miners started to order graphics cards specifically tailored for cryptocurrency mining, causing Nvidia shares to jump in value.
Figure 1 – NVDA Price – Courtesy of Google Finance
No less impressive is Bitcoin’s price trajectory, which has been consistently and spectacularly ascending for the last eight months. And, on 1 September, Bitcoin’s value reached yet another all-time high, piercing the US$5,000 mark in the Asian markets.
Figure 2 Bitcoin Price- Courtesy of Google Finance
The paths of Silicon Valley’s Nvidia and Bitcoin intersected when Nvidia launched graphic cards specifically dedicated to cryptocurrency mining.
ASUS, the Taiwanese computer hardware and electronics consumer company announced launching the Nvidia based technology, such as ASUS Mining P106, recently. The advertisement reads, “ASUS Mining P106 is designed for coin mining with high-efficiency components – delivering maximum hash-rate production at minimum cost.”
Specifically, the demand for cryptocurrency mining products has caused Nvidia sales to rise 52%, representing $1.2 billion, Fortune reported on August 10, 2017.
Another chipmaker benefitting from the cryptocurrencies craze is Advanced Micro Devices Inc. (AMD).
The demand for mining cryptocurrencies has been so extraordinary that some Wall Street experts have started to fear that Nvidia’s price is now becoming too dependent on Bitcoin.
Bitcoin and Nvidia’s Role are Intertwined
Nvidia’s graphic processing units (GPUs) play a key role in developing artificial intelligence, driverless cars, drones, and robotics. These innovations, along with Bitcoin and the Internet of Things, are emblematic of the 4th Industrial Revolution.
Now, cryptocurrency miners are benefitting from Nvidia’s GPU technology.
Nvidia is celebrating the anniversary of the first GPU, GeForce 256, which was launched on August 31, 1999. This GPU transformed forever the way humans interact with computers. Nvidia defines a GPU as “a single-chip processor with integrated transform, lighting, triangle setup/clipping, and rendering engines that are capable of processing a minimum of 10 million polygons per second.” This technology enables the acceleration of deep learning, analytics, and engineering applications.
The market for driverless cars, artificial intelligence, virtual reality devices, drones, and robots is in its infancy and taking hold of the world fast. Similarly, the transformation of the monetary and banking system initiated by Bitcoin technology is also young and still being tested.
The ultimate impact of the dramatic changes that these new technologies bring is unknown. However, one thing we can be sure of is that the market for these innovations is not going to shrink in the near future. On the contrary, it will expand unimaginably. The skyrocketing prices of BTC and Nvidia are showing us just a tiny glimpse of a new economic model.
What are your thoughts about the relationship of Nvidia’s products and Bitcoin? Let us know in the comments below!
