Bitcoin is an integral part of Nvidia’s success

Earlier this week Californian chipmaker Nvidia became the most valuable company in the world following a rush for its most popular product, AI chips. After Nvidia shares rose about 3.5% on Tuesday, Nvidia’s market cap was bigger than Microsoft’s. Earlier this month it had already overtaken Apple. What many do not know is that Bitcoin is also a reason for Nvidia’s spectacular growth in recent years

Decade

If you look at the growth of Bitcoin next to that of the Nvidia stock over a period of exactly the last ten years, it is indeed true that Nvidia grew faster than Bitcoin between 2014 and 2024. However, if you go back to Bitcoin’s origins in 2010, Bitcoin obviously wins.

As of this writing, Nvidia $NVDA is one of the few assets that has outperformed bitcoin over a 10-year time period. pic.twitter.com/PVgur6uBWY

— Lyn Alden (@LynAldenContact) May 24, 2024

Furthermore, there are more and more voices claiming that the growth of many chip stocks this year, and especially the growth of the Nvidia share, is starting to resemble the Dotcom bubble of 2020, and so the business media is sounding a warning. Both the Wall Street Journal and the Financial Times highlighted to possibility of an Nvidia bubble.

Nvidia is now the most valuable US company which is causing comparisons to Cisco. Cisco was the hardware provider that powered the next great technology wave, the internet.

That ended up being a bubble as it was both too early and the value ended up being in apps & smartphones. pic.twitter.com/O7LPWVqMsz

— Dare Obasanjo🐀 (@Carnage4Life) June 19, 2024

Beware of the stock price taking a step back during the summer.

Bitcoin mining

What many forget, however, is that part of Nvidia’s growth in recent years is due to young people’s interest in Bitcoin.

During the 2020 Covid-19 lockdowns in the United States, many gamers purchased Nvidia graphics cards. The chip company thought that these products would be used to improve the performance of gaming computers. However, research showed that Nvidia chips were mainly used to mine Bitcoin in the second half of 2020.

Bitcoin’s price went from a low of $4,000 in 2020 (during the Covid-19 outbreak in March) to a high of $29,000 (during the December bull run).