Crypto Winter Survivor: Inside Nvidia's Difficult Relationship With Mining

The firm's main products include graphics processing units, among others, which became widely purchased by miners during the crypto boom of 2017 - as a result, the firm's revenue started to correlate with the crypto market condition, which resulted in a few shake-ups.2017: Nvidia enjoys the crypto boom, becomes substantial part of the market.

The ever-increasing demand for mining equipment lead to higher prices: As Cointelegraph previously reported, the cost of flagship chips rose by 25 percent, with Nvidia's GeForce 1080 being sold for more than $1,000 during the market peak, while it normally retailed for $550. According to media reports, Nvidia even started limiting its online sales to avoid excessive resell, allowing customer to buy no more than two items per person.

In May 2018, Nvidia shared information about its revenue from chip sales to the crypto mining market for the first time.

First half of 2018: Crypto market plunges, Nvidia GPUs decline in price.

Respectively, an Nvidia GeForce GTX 1080 Founders Edition, 8GB GDDR5X PCI Express 3.0 Graphics Card was sold out at a price tag of $1,050 in April, but could be purchased for $709 around July.Second half of 2018: ASIC's takeover, Nvidia experiences "Crypto hangover".

"It is unlikely that Bitmain can drive Nvidia *completely* off of the market - they can certainly drive Nvidia GPUs mostly out of mining certain coins, but there are many ASIC resistant coins out there, and it would be extremely beneficial for Nvidia if Ethereum goes through with the ProgPoW update."

"Bitmain's performance is closely tied to the performance of cryptocurrency while Nvidia has a wide range of markets such as gaming, AI and hash functions more general, it is not only mining operations that are hashing. Nvidia cards are excellent for the vast majority of hashing operations needed in the world, far more than an ASIC that has a single use. Not to be confused, the unique use of an ASIC is very useful, but strictly in the case of Bitcoin mining."

In January 2019, Nvidia updated its financial estimates for Q4 for the fiscal year of 2019, reflecting weaker forecasted sales in its gaming and data center platforms, explained by excess midrange channel inventory following the slump in crypto market.

"Crypto mining was never the foundation of Nvidia's revenue, more like a cherry on top. During the 2017 bull run it was a really big cherry, but Nvidia is one of the most innovative chip makers and they are completely dominating their competition in gaming, AI, scientific compute, etc. If crypto went away entirely, Nvidia would be just fine."

"Nvidia has strong ProgPoW performance, and since they also lead AMD in general power efficiency with their latest GPUs, those two factors would definitely increase crypto mining's contribution to their revenue, at least compared to the tail end of 2018. It's unlikely we'll see a return to the bonanza of late 2017-early 2018 without a another bubble, but I don't expect that for a few more years. When that does eventually come around again, Nvidia will undoubtedly experience another huge few quarters, followed by another hangover a few quarters later."