14:41
-5 C°
Traffic jam:   2
$
74.4275
88.9334

Cryptocurrency fever sent NVIDIA shares down 6%

8 January 2021
1699
2 min.
4
Cryptocurrency fever sent NVIDIA shares down 6%

Cryptocurrency fever

When the video card market was hit by the first cryptocurrency boom in history, NVIDIA long questioned how to calculate miners contribution to the company's revenue in the gaming space.

Stale Pascal generation chips then had to be sold at discounted prices, while the release of successors was not only artificially delayed, it was also accompanied by a pricing policy that was not exactly popular with consumers.

NVIDIA CFO Colette Kress suggested that during the few months of peak demand for cryptocurrencies, miners increased the company's revenue by almost a billion dollars.

Ethereum surpassed $1,000 this week. This should attract more mining buyers to current models of NVIDIA graphics cards, although even without that the situation in the gaming market did not allow to speak about the excess of relevant components.

According to analysts cited by The Wall Street Journal, the fourth fiscal quarter, which ends this month on NVIDIA's calendar, will increase the company's revenue in the gaming space by 58 percent. This is the biggest increase in three years, and the last such change also had something to do with the cryptocurrency boom.

Also, there is a risk that the current cryptocurrency bubble will deflate rather quickly, as the long-delayed structural changes in the Ethereum market have every chance of materialising this year. For the sake of improving network scalability, the cryptocurrency issuers will abandon the Proof-of-Work concept in favor of Proof-of-Stake. Miners will no longer validate transactions and will no longer need their services, while they will lose interest in buying and operating video cards. The secondary market will be flooded with used graphics cards, sales of new ones will be negatively affected, and NVIDIA's revenue will suffer as it already did after the first cryptocurrency boom.

Such investor expectations, exacerbated by thickening clouds over the company's deal with Arm, have already caused the stock price to drop by 5.9%. Prior to that, NVIDIA securities were among the fastest-growing on the market, having more than doubled in value over the previous twelve months.

Persons1 and Companies3 in the news

Chief Financial Officer of the NVIDIA
1 place
Ethereum
1 place
NVIDIA
2 place
Section:

Discussion

Rating companies
Tesla
43 Mention
Apple
39 Mention
Nasdaq
36 Mention
Amazon
36 Mention
Dow Jones
32 Mention
Facebook
32 Mention
White House
30 Mention

NEW YORK NEWS

News from GlobalNY.biz is the freshest and most relevant information about high-profile events in the region. The task of the resource's news feed is to convey to readers with maximum accuracy and objectivity information about important events in business, politics, economy, healthcare, culture and other spheres of life in New York.
GlobalNY.biz news is a coverage of economic processes taking place in New York, the latest news of public life, incidents and an overview of political events. New York news is information about the activities of small and medium-sized businesses, the work of housing and communal services and utilities, the implementation of significant projects.
The site's journalists describe not only the life of the region, but also talk about the current state of the US economy. Everything you need to know about innovations in the field of industry and agriculture, economy and power is collected in the "News" section at GlobalNY.biz.
New York news quickly informs the reader, shows the real picture and opens up hot topics. Communication with government structures and business enables us to provide our readers with reliable, information-rich material. The main page of the portal contains the key news of New York!
Alena Potapova

Development Director