Analyst Exposes the Reason Nvidias Upward Trend is a Negative Indicator for Bitcoin
Bitcoin is facing a setback in the realm of tech stocks, AI, and gold as ETF investments dwindle. Investors are now turning their attention to different sectors within the cryptocurrency sphere. Nvidia has emerged as a frontrunner, with its stock surging 180% in Q1 2024, outperforming Microsoft and Apple with its support for Bitcoin. The company’s Q1 performance was exceptional, with revenue reaching $26 billion—a 262% increase year-over-year—resulting in a 600% profit surge from 2023. This solidifies Nvidia’s position as the leader in AI and propels it to become the world’s most valuable public company in terms of market cap.
Against this backdrop, an analyst predicts that Nvidia’s success will have negative implications for Bitcoin. Peter Schiff, a well-known cryptocurrency skeptic, has raised a surprising point regarding why Nvidia’s rapid rise could spell trouble for Bitcoin. He highlighted that every GPU produced by Nvidia contains gold but not Bitcoin, emphasizing the alleged lack of utility in Bitcoin. Schiff further argued that Bitcoin relies on gold for GPU mining, stating, “Bitcoin needs gold. Gold does not need Bitcoin. Nothing depends on Bitcoin.” Gold, renowned for its excellent electrical conductivity, is a vital component in GPU microchips due to its conductive properties and resistance to corrosion, despite its high cost.
As the landscape of Bitcoin evolves, investors like Stanley Druckenmiller are diversifying their portfolios by focusing on AI and the gold mining sector, moving away from conventional tech stocks. Nvidia, a key player in the thriving AI sector, is said to supply approximately 80% of all AI chips in data centers. Although initially concentrated on the gaming industry, Nvidia also experienced a temporary surge in demand during the cryptocurrency mining frenzy in 2017.
Currently boasting a market cap of $3.34 trillion, Nvidia’s value surpasses the GDP of all but five countries. Schiff foresees that only the U.S. and China will remain ahead of Nvidia. This isn’t the first time Schiff has criticized Bitcoin’s utility; in April, he stated that Bitcoin offers scarcity without utility, contrasting it with the enduring value of gold.
Tags: Artificial Intelligence, Bitcoin