Nvidia, the largest graphic card and chip maker, has closed its crypto venture. Collette Kress, CFO of the company, released an official statement announcing the end of the venture.
The statement released by Kress read, “We believe we’ve reached a normal period as we’re looking forward to essentially no cryptocurrency as we move forward. The revenues projected decline in cryptocurrency-specific products. The decline projected was approximately of $100 million whereas the actual cryptocurrency-specific product revenue was recorded to be $18 million. Hence, now we expect a negligible contribution going forward.”
The negative sentiments of Kress were also resonated by CEO of Nvidia, Jensen Huang. He added that the company has witnessed a nosedive decline in the profitability of cryptocurrency-focused mining chips due to cryptocurrencies showing a downward trend.
Bitmain Records $1 Billion Profit
It was reported by CCN in July that the biggest conglomerate in the cryptocurrency sector, Bitmain, recorded 65 times more profit as compared to Nvidia’s crypto venture. It was estimated that $19 billion valued conglomerate recorded a profit of $1.1 billion in first quarter of 2018.
The profit generated by Nvidia for the first quarter was recorded to be $550 million which was exactly half of the Bitmain’s profit. Notably, Nvidia couldn’t surpass the profitability of Bitmain despite being the largest graphic card and chip manufacturer in the world.
The profitability of Bitmain defers the argument of Nvidia that its crypto venture is struggling due to downtrend in the crypto market as Bitmain also conducts similar business operations.
Apart from this, amid significant decline in the prices of major cryptocurrencies, the hash rate of Bitcoin and other proof-of-work blockchain networks has increased considerably in the last eight months.
With this trend, the diminishing performance of Nvidia’s crypto venture can’t be on the backdrop of general trend of the crypto market as other mining equipment manufacturers like Bitmain, Canaan and Samsung have seen significant progress in their growth as cryptocurrency mining is at all-time high.
Actual Reason behind Nvidia’s Declining Performance
The actual reason behind the declining performance of Nvidia’s crypto venture is the slowdown in the demand of GPU mining. Due to lack of computing power in the chips used to create graphic cards, there are only a few tokens and cryptocurrencies which can be produced with GPU miners.
Major players in crypto mining sectors are aggressively improving the ASIC mining chips or mining equipment used for specific development of mine cryptocurrencies. Due to this, it becomes difficult for the miners to depend on the graphic cards and chips which are not designed to mine crypto to produce digital assets.
Hence, it is clear that profitability of Nvidia’s crypto venture is due to declining interest towards GPU miners and graphic cards due to their inefficiency in comparison to ASIC miners rather than the decline in the demand for cryptocurrency mining and digital assets in general.