Crypto price can be a concern not only for investors but also for crypto miners. Why exactly is this the case? Crypto mining activity is rewarded per mathematical problems solved using powerful computers. Now, given that cryptocurrencies are used as a reward, its price will dictate whether or not a crypto mining operation is profitable or not. In fact, both HashRate and Genesis Mining have stopped mining contracts that aren’t profitable.
On the other hand, there are those miners that have become more sophisticated. And because of this, gone are the days when you have miners that operate in their basement. Now, you have companies that have invested in high-end computers and even manufactured the hardware by themselves.
Of course, the dwindling price of cryptocurrencies can still affect miners regardless of the size of their operations. If you will take a closer look at Nvidia, it seems that the demand from the crypto market has somewhat descended. According to Chief Financial Officer Colette Kress, she surprised investors saying that the second-quarter earnings declined significantly. According to Kress, “Our revenue outlook had anticipated cryptocurrency specific products declining to approximately $100 million, while actual crypto-specific product revenue was $18 million”. Kress also added that “Whereas we had previously anticipated cryptocurrency to be meaningful for the year, we are now projecting no contributions going forward”.
Led by Gaming Business
The good news for the company is that it didn’t focus primarily on cryptocurrencies. Instead, the profit increased by 40% in the second quarter to $3.1 billion mainly because of its popularity among gamers.
Many investors chose Nvidia’s stock as an alternative to crypto-related products. In fact, Nvidia experienced stronger sales this year specifically from those who were mining Ether. However, many are anticipating that the crypto revenue is about to decline since Chief Executive Jensen Huang has already predicted a drop while announcing the profits made from first-quarter.
Huang said that “We did almost $300 million in crypto, and next quarter we expect it to be down by two-thirds of that”.
Good News for Gamers
Consider this outlook good news for gamers. For the past year, things weren’t good for them considering if you want to have a GPU upgrade, you will have to deal with depleted inventory not to mention the increasing cost. If you will base it from Nvidia’s statement, it only means that the crypto market is no longer too hot at least for now.
This isn’t bad news for Nvidia as well considering that miners only make up a small portion of their primary market. The company could easily focus back in its original market.
However, what happens next in case Bitcoin becomes bullish once again? Though Bitcoin slumped in the last few weeks because of the rejected Winklevoss’ Bitcoin ETF application and the SEC to postponing its decision on the matter for next month, there is still a chance that we are going to see a Bitcoin or crypto-related ETF that can rejuvenate the market. Some crypto experts remain bullish to this day even after Bitcoin slipped below $6,000.