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Bitcoin’s Returns vs. Tesla and Nvidia: A Near Comparison

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The broader stock market has recently been showing signs of underperformance. According to a recent analysis conducted by Barchart, the market breadth of the S&P 500 has fallen to its lowest level since June 1. Presently, only 43% of the companies listed on the S&P 500 are currently trading above their 200-day moving averages. Moreover, the leading U.S. equity index recently set another bearish record just a few hours ago.

Bitcoin

Over the past 103 days, the S&P 500 had not experienced a decline exceeding 1.5%. However, on Thursday, September 22, it closed 1.64% lower, bringing an end to this streak. Nevertheless, Barchart pointed out that the record of not declining more than 2% is still intact. In fact, it has now reached an impressive 147 consecutive days, marking the longest period since February 2018.

Bitcoin

Bitcoin’s Battle: Crypto vs. Equities

Bitcoin is currently navigating one of its most severe bear markets. It has experienced a substantial decline, plummeting by over 60% from its record high price of $69,000. Nevertheless, when examining its return distribution, it exhibits similarities to that of large-cap stocks such as Nvidia and Tesla. Given that Bitcoin is traded throughout the year, it is reasonable to anticipate a greater degree of price discovery compared to other assets. However, a recent assessment conducted by Ecoinometrics revealed that Bitcoin does not qualify as a distinct “outlier.” To a considerable extent, its pattern of return on investment (ROI) aligns with that of select prominent stocks. The analysis emphasized this point,

“When you look at the profile of the monthly returns for those three [Bitcoin, Tesla, Nvidia] since 2016, they really don’t look that different… The point is that Bitcoin doesn’t live in a world of its own in terms of volatility and return distribution.”

Bitcoin

Nvidia’s CTO Skeptical Of Crypto’s Value, Believes AI Is The Future

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US chip-maker Nvidia’s chief technology officer, Michael Kagan, has expressed skepticism about the benefits of cryptocurrencies. In a recent interview, Kagan stated that digital currencies do not “bring anything useful for society” and that other uses of processing power, such as Nvidia’s artificial intelligence chatbot ChatGPT, are more worthwhile than mining crypto.

AI chatbot More Worthwhile Than Mining crypto, Says Kagan

Nvidia has never been particularly welcoming to the crypto community. The company even released software last year that artificially constrained the ability to use its graphics cards for mining the popular Ethereum digital currency to ensure supply went to its preferred customers, such as AI researchers and gamers.

Kagan justified this decision by stating that using processing power to mine digital currencies has limited value, whereas artificial intelligence has the potential to be truly transformative. According to Kagan, Nvidia’s parallel processing capabilities made it a popular choice for programming crypto-related tasks. 

However, the use of Nvidia’s technology for crypto ultimately proved to be unproductive for society. On the other hand, he believes that AI has tangible benefits and is more useful to society.

Kagan also drew a comparison between crypto and high-frequency trading, stating that while the latter has generated a lot of business for Nvidia, he never believed that crypto was something that would do anything good for humanity. 

He said:

You know, people do crazy things, but they buy your stuff, and you sell them stuff. But you don’t redirect the company to support whatever it is.

Nvidia’s products have become integral to the AI boom, as the computationally intensive work of training a new AI system happens to work significantly faster on the types of simple yet powerful processors that had been adopted by gamers. 

The company has sold thousands of its AI-focused processors to companies like Microsoft, Amazon, and Oracle and also rents access to the chips directly through its DGX cloud service.

During Nvidia’s annual conference last week, CEO Jensen Huang referred to his company as the driving force behind the “AI iPhone moment” and emphasized that the “generative AI” technology his company provides has the potential to transform almost every industry. While Nvidia’s products may not be popular among crypto enthusiasts, the company’s focus on AI seems to be paying off in a big way.

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German Bitcoin Miner Expects Revenue Of $205M For 2022 – Despite Volatile Markets

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Northern Data, a German Bitcoin mining company’s CEO, Aroosh Thillainathan, shared a letter to shareholders on December 21st that included a positive and strategic update on the company as 2022 approaches to end.

The CEO stated that the company anticipates revenue of €190-194 million ($201.4 million to $205.64 million) for the year 2022. He explained that the Bitcoin miner company strived hard to meet its market-adjusted target in 2022. 

But unfortunately, it was difficult – not just because of the volatile crypto markets that were affected by issues, fluctuations, and low confidence levels – but also because of unmatched macroeconomic circumstances.

Aroosh asserts that in 2022, despite having many tough rivals, they substantially increased their market share in mining. They have made significant investments in the growth and development of their financial department.

Additionally, he claims that to stabilize and enhance their financial situation in 2022, they put a lot of effort into strengthening their management and streamlining their three business divisions to make them more cost-effective. 

In the near future, he will invest in order to take advantage of both the medium- and long-term prospects presented by High-Performance Computing (HPC) megatrends. 

He further said that they would deliberately play to their strengths and take advantage of any openings presented by this crisis and any others that may arise in the future.

According to the letter’s statement:

Northern Data has forged new and strong partnerships in H2 2022. These partnerships will allow us to identify and capitalize on the opportunities of the future in HPC, at pace.

Bitcoin Miner’s Operating Performance 2022

They continue to stick to their earnings projection of EUR 40-75 million in adjusted EBITDA despite the challenging market, which shows how intensely they are focused on cost containment and profitability.

The company’s CEO noted that since the price of Bitcoin has dropped by almost 60% since the start of the year, it is a fair outcome for 2022. In spite of the environment being concurrently affected by dropping Bitcoin values, sharp rises in power bills, and hash-rate highs (YTD: +46%), they have successfully developed their Bitcoin mining operation in 2022.

As a result of this and the prioritization of our cash position, our revenue growth in 2022 has been adjusted and is expected to be in the range of EUR 190-194 million for the full year.

Moreover, through their Cloud and Data Center Infrastructure Solutions businesses, he assures that they will keep improving the revenue from crypto mining and adding structure and capacity to high-performance computing. 

He believes “this will enable sustainable, profitable growth in the long term.” Additionally, they are confident that revenue will increase in 2023 due to opportunities like their agreement with NVIDIA and other changing client connections in their cloud sector.

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Nvidia to slash hash power of Graphic Cards to make it less desirable to Ethereum miner

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The graphics card-making giant, Nvidia has announced its plans to reduce the hash rate of newly manufactured GeForce RTX 3080, 3070, and 3060 Ti graphics cards to make it less desirable to miners.

Nvidia’s Priority is Gamers , Not Miners

It is important to note that NVIDIA GPUs are programmable. This makes it possible for the users to frequently explore new applications for them, for instance from weather simulation and gene sequencing to deep learning and robotics as well as mining cryptocurrency.

In a bid to aid in getting GeForce GPUs in the hands of gamers, Nvidia had previously announced that all GeForce RTX 3060 graphics cards were to be shipped with a lowered Ethereum hash rate. In extension to its February announcement, the California-based company is now taking additional steps by implementing a reduced ETH hash rate to a fresh batch of GeForce RTX 3080, RTX 3070, and RTX 3060 Ti graphics cards.

These cards will start shipping in late May and will be labeled with a “Lite Hash Rate” or “LHR” to help customers identify “exactly what they are getting”, said Nvidia. It also revealed that the reduced hash rate is only valid for the newly manufactured gaming cards with the aforementioned identifier and does not apply to the ones that are already purchased.

While detailing the need to maintain the inventory for gamers, the chip-maker stated that GeForce is made for gaming and also went on to add,

“GeForce RTX GPUs have introduced a range of cutting-edge technologies, created to meet the needs of gamers and those who create digital experiences. We believe this additional step will get more GeForce cards at better prices into the hands of gamers everywhere.”

Over the past year, the world has seen massive disruption with respect to supply chain activities. During these times, gaming splurges have noted a huge rise, however, the supply of graphics cards has failed to meet the demand. Both gamers and Ethreum miners rely on these GPUs.

Investors Do Not Have Enough Evidence Against Nvidia In Cryptocurrency Lawsuit Claims Oakland Court

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Organizations in the cryptocurrency space are no stranger to controversies. Since the inception of Bitcoin in 2009, the industry has been hit by multiple lawsuits and scrutinies by regulatory bodies.

This time, however, one of the companies in the cryptocurrency space received a massive win. Just recently, the U.S. District Judge of Oakland, California, ruled that there was no evidence against Nividia to convict the company in the 2019 mining chip lawsuit. 

On March 17, Judge Haywood Gilliam of the District Court of Oakland, California stated that Nvidia was not guilty of skewing the market to project more revenues.

According to the claims, the investors involved could not prove that Nvidia’s earning came from cryptocurrency enthusiasts. The chips designed by Nvidia are actually used by videogames for high-performance gaming.

Back in December, Nvidia had said that investors were nitpicking corporate statements made in earlier meetings. The chip manufacturer reiterated its claims that all of its reports and numbers were correct because they believed in transparency.

The company’s legal counsel had said that investors should not rely on “speculative expectations of third-party analysts” as part of their lawsuit.

Nvidia’s lawyer had initially said that the revenue from the cryptocurrency sector was small for the company but its impact overall was significant.

The digital asset earnings were the reason that Nvidia missed its earnings during the last fiscal year. Judge Haywood Gilliam’s verdict is a one-eighty on the earlier speculation that the investors had a solid case on their hands.