Bitcoin prices have seen rapid growth in recent months as institutional investors and large corporations poured money into the digital currency, but the volatility of the cryptocurrency market has got its ugly head back up.
Bitcoin price fell to just over $ 34,000 on January 13, after rising to over $ 40,500 on January 9. Because of this volatility, cryptocurrencies like Bitcoin are a risky bet for investors looking for stable returns. Additionally, some Wall Street companies are concerned that cryptocurrencies will go to zero.
However, it cannot be denied that cryptocurrencies are a hot asset class that many want a piece of. But is there a safer way to invest? The answer is yes, and that safer path is over NVIDIA (NASDAQ: NVDA) – a hot growth stock that set the market on fire last year.
NVIDIA is already benefiting from the cryptocurrency boom
Cryptocurrency miners use graphics cards like NVIDIA to mine digital currencies. Demand related to cryptocurrency mining accounted for nearly 5% of NVIDIA’s sales three years ago when cryptocurrency mining was booming. The good news for NVIDIA investors is that the recent spike in cryptocurrency prices has sparked renewed demand from miners, especially since the company’s new Ampere cards launched.
The graphics specialist sold $ 175 million worth of GPUs to miners in the third quarter of fiscal 2021, according to RBC Capital Markets. While that would be only 3.7% of NVIDIA’s $ 4.73 billion in revenue for the quarter, mining demand is better for the company to a greater extent as demand that exceeds supply comes at higher prices has led.
The latest RTX 30 series graphics cards from NVIDIA are in short supply due to high demand from both gamers and cryptocurrency miners. The cards are said to be sold out as soon as they go on sale. As a result, NVIDIA is now saying that GPU supply will remain meager through the first quarter of the fiscal year that ends in April.
NVIDIA also points out that sales of its latest RTX 30 amp cards are double that of previous RTX 20 series cards. This combination of incredible demand and scarcity has resulted in a surge in GPU prices.
Big profits ahead
Cryptocurrency mining will have a twofold impact on NVIDIA’s business – one in the form of increased demand from miners and the other in the form of higher prices. Additionally, the company could consider making dedicated crypto mining cards if miners’ demand is significant. NVIDIA is unsure how much revenue is currently being generated in this market.
However, the lack of graphics cards and the efficiency of the new RTX cards for mining digital currencies suggest that the demand for mining could be strong. According to reports, an Ethereum miner can get his investment in an RTX 3080 back in just 233 days. This is a big improvement over the RTX 2080, which reportedly took two and a half years to become profitable.
According to RBC, recent technical changes in Ethereum mining will force miners to upgrade to new hardware. Here’s how NVIDIA could make big profits in the cryptocurrency market in 2021.
When you deploy the main catalysts NVIDIA sits on – data centers and video games – it becomes clear why it’s better to buy into the cryptocurrency craze through the chipmaker than to buy cryptocurrencies outright. NVIDIA has a diversified business and will help investors avoid the speculative nature of the cryptocurrency market.