Nvidia, GPU Manufacturer Company, in the Lowest Level in S&P 500 Index of Bear Market
Cryptocurrencies Bear market has influenced some companies and cryptocurrencies. Many Initial Coin Offerings (ICOs) which have earned millions of dollars could not supply an efficient product to the market. Cryptomining industry was not an exception in these evolutions too.
What is Bear Market?
Bear Market is attributed to a condition wherein securities price decreases, and it leads to a widespread cynicism. Exchange market encounters falling flow in order to be able to save itself. The investors predict that in this state, the people address selling their stock; although, it is different depending on the situation, 20% falling growth from a summit in some market indexes, e.g., S&P 500 index, in a period of two months can be considered entering to Bear Market.
Cryptocurrency mining has changed into an interesting job for the people and companies that seek higher income. The peak of these minings was in 2017 when digital currencies were at their highest value, and the companies could earn a cost-effective income from cryptocurrency mining. Among companies turning a profit from this market, we found the names such as Nvidia and AMD which manufactured GPUs. In that time, the companies sold almost all GPUs they manufactured, and their profit was remarkable; although the Bear market strongly influenced this company.
In the last three months of 2018, Nvidia faced an enormous bulk of its stock sale. So according to CNBC, it had the worst performance in the S&P 500 index. From 2016 Nvidia market value reached $175 billion from $14 billion; that is, 1150% growth of this company just in a few years.
This company could publish its profit report from cryptocurrency mining in May; although they predicted two-thirds sale decrease for the next three months of the year. Moreover, in the last three months of the year, it earned almost nothing through it. Looking at the results, Jensen Huang, Nvidia company chief executive, told that they had had overproduction after cryptocurrencies market development.
It seems that GPU prices had a significant increase when cryptocurrency market was in bloom; however, when the market of these cryptos dropped, their prices didn’t decrease simultaneously with miners’ need. Consistent with PHLX Semiconductor Index, the statistics of the largest hardware manufacturer in the market reveal that they have lost about 20% in the last three months, so has Nvidia at 50%.
Besides, Bitcoin has lost more than 50% of its value in the last months. It shows that this Bitcoin value decrease caused miners not be able to cope with mining costs, so they stopped their operation to launch it at the other time. “How will Bitcoin price volatilities influence Bitcoin miners manufacturing companies?” is a question to be answered.