Nvidia, the American technology company, which deals with designing Graphic Processing Units (GPU) for gamers and a mining speculator, had a severe blow in the cryptocurrency market. Cryptocurrency is being used as a medium of exchange for transferring assets and securing financial transactions. Trading in cryptocurrency can bring in lots of profit on one hand, and can put you through a severe loss on the other hand. Although the loss suffered by Nvidia is not severe in nature, it has surely shaken the GPU designer.
There were times when gamers bought Nvidia’s cards in large numbers. Due to its high performance and low cost, the consumer grade GPUs have solved many problems in bitcoin mining. They have brought in great profits from the attractive market.
Earning statements of Nvidia shows that things have taken a different turn and these cards have lost their charm. The company has failed to foresee the current trend and has placated itself with the profit produced during the boom period. If at all the company had been cautious about the trend, it would have foregone $57 billion excess value in the inventory. Even the mid-range GPU sales have declined.
It has been said that more discounts have to be given and it will take a considerable amount of time, say two quarters, to empty the inventory. Miners and gamers are not ready to spend extra money, as they think that money can do better.
Nvidia’s stocks have fallen nearly 19% and its CEO takes up the blame. On a press call, CEO Jansen said that the he wished the company had seen it earlier and it was a sure setback.
Cryptocurrency has not spared even strong companies like Ethereum. What has been exciting till 2018, has been subjected to a lot of criticism and doubtfulness now.
Source 1: techcrunch.com
Source 2: www.inventiva.co.in
I am an amateur content writer, who is currently pursuing a Masters in Finance from ICFAI Business School. In this highly volatile Business Market, I find no better way to keep myself updated than to write about it and reflect my own thoughts as words.